My privately-held software services company was offered $1.5 million by an investor for a straight percentage of the firm. It’s our first round of outside investment and it is designed to help us expand our marketing to really lock up the sectors we operate in and expand into some new ones.
We can grok most of the deal terms, but *they’ve asked for a 10% annual dividend on their investment, meaning they want to be paid $150k annually.*
The investment has a 5 year horizon, so it isn’t as if we’ll have to live with these terms forever, but I’ve never heard of such a requirement.
Is this usurious? It feels like it. Have you seen other deals like this?