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Outside investors can be allowed I would think, but not given shares. For example, a credit union could give a loan and collect their interest. The credit union
by Miner49er 8y ago
Outside investors can be allowed I would think, but not given shares. For example, a credit union could give a loan and collect their interest. The credit union wouldn't get any equity.
- nybble41 8y agoThat sounds like a pretty good deal—for the credit union. They get paid their fixed share no matter how poorly the firm performs (short of bankruptcy). The firm and its employees are taking almost all of the risk. Selling equity would allow the firm to raise capital while splitting the risk with the investor(s). It makes the investor a partner in the firm's success or failure.