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Client as investor?

SthlmSUPSthlmSUP Posts: 1subscriber
edited December 2015 in Growth Funding
I was curious if anyone had any experience (good or bad) or if not have any advice for a situation I am in.

My business is 14 months old, bootstrapped it to cash flows and one of our bigger clients is making a play for us and really wants to acquire us. We are in no position to sell with a good valuation as we really just became operational. What I was thinking to do was to lock them up to a two year revenue deal - which in exchange for meeting certain revenue milestones they would receive an equity stake (5-10%).

It would really lock up the best client in the industry and put them well on the path for a future buyout (my 4-5 year goal). Having $4M in guaranteed revenues over the next two years would be a huge benefit for us. Would allow us to skip future funding. Thoughts?

Does this sound crazy/plausible/scary/smart?



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