In consideration of a negative experience with a past investor, I prefer to keep this discussion anonymous.
Recently, I had a deal with an investor who agreed to finance 10% of a $1 million deal, but proposed to receive 50% of the profits. As far as my understanding goes, if the investor contributes the 10% for a Small Business Administration (SBA) deal, they may receive only 10% equity stake in the acquisition and cannot demand more due to the Schedule K tax returns.
Can you suggest a viable capital stack arrangement that would be considered fair?
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