Advice on funding a LLC.

LifesalesLifesales Posts: 1subscriber
edited February 2007 in Protecting Your Ideas
I have a question on the funding of my LLC.
I have an investor that wants to invest $50,000 in my new business. In exchange for that I am giving him 15% equity in the company.
The person who drafted the operating agreement (not my equity partner) also included my LLC being charged interest on the loan, to the tune of 12% a year.
Now, if I`m funding with equity (15%), why would I also be funding with debt (12% interest per year).
Myself and my equity partner know little about these arrangements. If I have one minority / silent partner that puts up $50,000, should I be giving equity and paying interest on the loan?
I guess I don`t know what the "norm" is, but I`m really not interested in giving up equity and paying interest.
Any thoughts would be great.


Sign In or Register to comment.