So, I've been trying to come up with various exit strategies to present when pitching to an investor, particularly a local one, so trying to find something that makes sense to everyone while not just being the standard "In return for X you are getting Y portion of the company." At the CVCF last month, one of the speakers promoted his method of doing a bond setup which structures the deal more around the return rather the ownership.
See his site for some details: The Startup Bond
I've mentioned this to one investor, and I think they just couldn't get past the word bond (talking about how bonds are for companies with assets, etc.).
Following up on my concept for a startup incubator here, and inspired by this Dragon's Den episode:
I think I would try a tiered structure for the return, so that if a company was able to pay back an agreed amount sooner, then they owe less than if it takes longer to pay it back. Incentivise making a profit earlier, and everything else follows.
Anyhow, does anyone else have other models of how to structure a deal and the exit that is different, but that may be easy for all investors to understand?
