How do I structure the acquisition of a company in a way that satisfies both the lender and the seller?

It really all depends on - if your putting in any money - How much your salary will be (market rate or lower)? - existing investors - if they're revenue generating - how long the companies be around Essentially it's the risk profile of the company that you're coming into. If it's an idea and your coming in at the ground level and not taking a salary the 50/50. If it's been around for a while, no investors and some traction or revenue, you'll be paid below market rate, then maybe 3-10% If it's making money, raised some capital and your a "normal" developer (not a super star) then 1% The key is that you ask for the Cap Table to truly understand what % of the company the type + amount of shares they're inferring equates to. 10,000 shares doesn't mean much if they have 100M outstanding. Also, all equity should be vested over 4 years, 1 year cliff.

Extremely difficult question to answer. It will mostly be justified by traction in a certain amount of time. If you receive a huge number of users in a year, this will add multiples to your valuation. On the flip side, if you are ten years in with steady growth, the multiples will not be as high. Industry matters, as well. I'd say $50 million a year in gross revenue will definitely get you a $100 million buyout.

Absolutely. I would focus as much as possible at raising the least amount of money possible while still optimizing your businesses ability to execute on its strategy. Money isn't free, the cost is the equity, interest, etc.

If you want information that matters in "Creative Financing Techniques" find a person with the experience/insight. Most of what is in books is dated. Many of the more creative methods are a function of current tax code and market factors (like QE).

What you're asking is very complex and to me 2% to 4% seems like a terrible ROI. There is a lot of information that needs to be provided to determine how to structure the deal and if it's even a good deal. Are you getting equity (a part of the ownership of the company) for your investment? If yes, how much (%)? Is the company valuation realistic? Is the company established and having sales or is it just starting out? Simple example: If you're investing 250k $ and the company has a realistic pre-money (before your money is invested in it) valuation of 1 Million $, you should be getting 25% in terms of equity. Of course things aren't that simple in reality but it's a good rule of thumb. - If I was to go ahead, how should the business be structured? This is hard to answer without more information. In general you should seek to have both equity and decision making power if you're investing into a business, if you want to be an equal partner you need both equal equity and power. Especially if it's in an early stage or if you're investing a significant amount of money. Which to me seems to be the case. How you'll specifically structure the business depends on the area in which the business operates in ex. software, manufacturing, sales, consulting etc. - What are the steps I can take to protect my investment? A lot of research and consulting into how these kinds of investments are usually done. You should obviously have a specific contract drafted by a lawyer as well which denotes the terms of investment. - How should any potential net income be shared if the proposer does not invest a single penny? Depends on what else is the proposer bringing to the table. Maybe other resources, machines for manufacturing, their network, blood sweat and tears, or whatever has a determinable value. Of course you need to figure out if what they're bringing to the table is of equal or more value to the money you're bringing in. - What are the pitfalls of such an arrangement? Also depends on the details. Some are: -> Giving the partner all the decision making power, "Trust is a terrible criteria for investment" -> There's always the risk of the company failing of course. -> If you don't draft specific contracts on what you're getting for your investment chances are you'll be getting very little I would suggest reading up/researching on investing into businesses (or start-ups), there are established procedures and contracts that are often used when investing.