Financing8
Financing
“Give me money, I’ll give you a share of the profit”
One sentence that the two sides often understand in entirely different ways.
The entrepreneur hears temporary financing to be repaid. The provider of funds hears an enduring right to a share of the proceeds. A loan is repayable regardless of success, while an investment shares in the loss as well. And “a share of the profit” immediately raises a question: which profit? From the transaction or the entire company, before or after expenses, and who holds the underlying information?
It is best to align understandings before the money changes hands: through a clear contractual framework, a written document and access to financial reports agreed in advance.
Read the analysis (5 min)
analytical text · 5 min read
→
hold to open, or click
My professional insights
Financing · 5 min read