You’ve found someone who wants to invest in your up and coming company. They want shares so that their return is based on profit, but you’re not keen on them having any control of the business. Is there a way to keep you both happy?
You can avoid giving away control whilst giving the investor a share of profits by using redeemable preference shares which have no voting rights but do carry a dividend entitlement. Make sure this right is variable, dependent on profits. If it’s fixed, your investor won’t be able to claim share loss relief if things go badly.