You have a great idea for a new business opportunity. You’ve run the numbers and are confident that with an initial investment of $500,000, you can turn a profit in three years and generate $150,000 in operating income per year. But you realize there are no guarantees. Further, you anticipate that there is at least a 50/50 chance the economy will enter a recession within the next two years.
You’ve approached several banks for a loan but have been turned down due to the lack of history in generating positive cash flow. Your only way forward is to secure an equity partner.

What factors will be most important in reaching an agreement on the terms for a $500,000 equity investment that will be appealing to both you and to your equity partner(s)?
How will demonstrate to potential investors that your business model is viable and worthy of the investment risk?
Beyond capital infusion, what would you look for in identifying an equity partner?
If your investor were also willing to fund a (partial) private loan, would you be interested in this and, if so, under what terms? Remember, your potential partner is a savvy investor who has other options, so you must consider “realistic” terms that provide an attractive risk/reward scenario and not just an arrangement that is lopsided in your favor.