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Hey folks, new member here!
I created my meal prep startup 5 years ago, and I run it on the side of my job. Over time we’ve grown to 650k$ / year revenue, and I’m by far the growth bottleneck. With a proper marketing budget and me going full time, I’m convinced we can grow ten-fold over the next few years.
Last week I met someone who’s apparently a high worth person (300M ? though I need to check), and he LOVES my concept. He would very much like to invest in my company and he seems genuine. This could be a great opportunity.
His investment offer was a little weird, and I haven’t yet had a chance to discuss it a bit longer. He wants 50% of the shares of the company, and basically, he says that he will fund 100% of my needs and I will owe him 50% that I may or may not pay back. Basically, if we open a new production kitchen for say 250k, he will pay it all, and I will owe him 125k. I can either repay that over time, or choose to not do so, in which case he will recoup his money when we sell: i.e. if we sell for a million, he will get 500k (50%), and then whatever is left to pay of the 125k, and I will get the rest. He’s open to paying my salary as well, and he seemed very relaxed about funding growth and not caring about profitability too much for a few years.
I’ve never heard of this type of investment. From what I understand this is not a one-time payment (i.e. I value your company x and I give you y for a percentage of your shares), but rather a partnership in which I run the company and he funds everything against 50% ownership. He seems to have very deep pockets and wasn’t turned off by the idea of opening 10+ new kitchens over the country for example.
What do you guys think? Is this a common scenario? Are there things I should ask in particular or make sure I get right?
I’ve never had to raise money before, and this is unsettling for me, but potentially a huge opportunity as well. Thanks for your help !!
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