I was slightly unclear as to the circumstances, but basically I read you have an existing investor who is basically inactive in the business, but is being diffi

I was slightly unclear as to the circumstances, but basically I read you have an existing investor who is basically inactive in the business, but is being difficult during further acquisition. You have 10 staff, and you're profitable. It sounds as though it might be best to try and sever ties with this investor if he's making things difficult for you. One way of doing this would be to cut costs in order to offer to buy out this investor after some period of time, eg. you have 10 people, if you can redistribute the equity held by the current VC/Angel whatever to your employees as restricted stock with a vesting period of two years you may be able to save enough money to buy out the "toxic investor". Taking this approach depends, of course, on your staff's ability/willingness to withstand a paycut for that, long, the ability to make that kind of decision independently of the existing VC and whether or not you could buy out this dude after some reasonable period of time (eg. 2 years). The other thing I would point out is if you already have a profitable business and 10 employees, you really shouldn't need any new funding to build a new product. If you have half your team work Fridays on new product development you'll have something in 6 months or so that you can sell.