Give investors the option to have 50% of their equity returned as cash in the event that the cash value will equal their original investment amount. The idea is to make this a LOW RISK investment for 3F's in order to gain early traction. Example
- Investor ABC gives 10k for 10% during early round round
- Next round completes at 100k for 50%
- Investor ABC is given 10k for 5% leaving them with 5% equity
If I went this route what do I need to be aware of? What are potential problems?