DIVIDEND EXPECTED BY INVESTORS?
If I acquire a U.S. business using no debt, just equity (from my savings, friends & family, outside investors), what % preferred annual dividend would investors expect?
What total annual return would they expect? Would they want me to sell the business in 3 to 5 years so they can realize the return on their investment? What if the business hasn't increased enough in value by the end of that period to provide the total return they wanted?
Most of that needs to be worked out before anyone subscribes and hands over cash.
Only the people putting cash to work with you can know what they expect in return, how long an appropriate lock up is, and how they value you as a risk.
Financed entirely with equity?
Something like 3% simple hurdle that kicks in on the third anniversary of the close.
2 classes of shares. 3% only applies to outstanding invested capital at 3rd anniversary. Return all the invested capital by year 3 and everyone converts to class B and you begin to realize your performance carry. etc.
There are an infinite # of ways to cut it. Find a good deal, work out the expectations with your family and friends up front and then go to work.