Does it work that way?

[Phill Twist]

To raise $2 million I will be giving 33% of my equity in my company. Does this mean that when the company is profitable, I will get repaid the $2 million because initially it was my equity that I sold, or does it not work this way?

 

[rmorse]

It does not work that way. If you don't want to sell equity, you're not "giving" anything, you need to sell debt. To sell debt, you need collateral besides earning.

You can sell equity with the opportunity to buy it back, but why would anyone risk their capital and not participate on the back end if all is going well. The buy back will have to be a good deal for them, like a premium to market value.

 

[2rosy]

Use common sense. Do you think someone will give you 2million and then if you're profitable give you an additional 2 million

 

[FCXoptions]

Do you think someone will give you 2million and then if you're profitable give you an additional 2 million

If he is unprofitable and a tech company, they will then give him $2 billion lol

 

[cdcaveman]

How does someone get a company where someone would pay 2mm for equity and then ask such a dumb question

 

[dartmus]

To raise $2 million I will be giving 33% of my equity in my company. Does this mean that when the company is profitable, I will get repaid the $2 million because initially it was my equity that I sold, or does it not work this way?

You're not selling a 33% stake in your company. Your company is acquiring 2m in assets. It's paying for those assets by issuing new shares. The effect going forward is it's dilutes your participation in future results. IE the new shareholder effectively owns 33% of those future earnings.