Q: 1% or more owner in business?
I am selling some property in Alaska to a guy who will be growing medical marijuana. I own the property outright and will carry the note. I own some heavy equipment on the property he wants to buy and wants my help running the machinery, etc. Rather than selling the equipment or charging for my time, would it behoove me to get a 1% or whatever interest in the business? Hows does that work? we believe this will be a multimillion dollar business. Or do I invest in stock?
A: The choice of what to offer in exchange for a piece of the company is a business decision for you. The choice depends on whether repayment of the loan/note is worth more to you than a less certain return from an increase in stock value. If they are selling stock at a per-share price that is less than what you could work out as consideration for the equipment sale, then you obviously should invest your own funds directly.
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