IANAL, or an accountant for that matter, but something does not add up or you are leaving a lot of detail out. If you invest $100K for 3%, then the investor com

IANAL, or an accountant for that matter, but something does not add up or you are leaving a lot of detail out. If you invest $100K for 3%, then the investor comes on at $2M for 10% you are going to take a hefty dilution from that. Without knowing all the details of the company or who/what they do, I am skeptical that a company only generating $20-25K monthly from consulting revenues is getting a $20M valuation. That seems a bit high for a consulting company that has been in business for 3 years doing less than $500,000 annual sales. From the sounds of it, they are only asking you to invest so they can turn around and pay you from your investment. With that in mind, you may want to consider doing a convertible debt and if/when investors come on you have an option to convert to equity or collect what is owed to you. And if the investor does not come through, the company still has a debt to you.