I am in the process of purchasing a business for $500k. Half of it will be financed by the current owner with the business as collateral. I will put up $100 and will have a loan for $100. The remaining $50k will be provided by the investor. Is it fair to say that the investor should have 10% ownership, or 20% ownership? Does it matter that he will be an out-of-state investor and won`t be involved in the day-to-day of the business like I will?
Thank you very much for your input.