Someone wanted to invest 30k into my landscape company for 5% return, now I’m not the smartest guy out there and someone is free to correct me if I’m wrong but shouldn’t that 5% be until the loan is paid off and not until I give the company up
Again I’m very new to this so I could be looking at this horribly wrong
If someone wants to buy 5% of your equity for $30,000 that means he/she is valuing your company at $600,000.
5% of $600,000 = $30,000
Buying equity is not a loan. You don’t owe that money back. But you should have a conversation around if your new potential partner is expecting quarterly or annual distributions of profits generated.