Ask the Advisor – Q. Should I allow an investor to take a minority stake in my company?
Abstract: Along with selling, one of the toughest decisions a privately owned business can make is whether to allow an outside investor to take a substantial minority stake. This type of arrangement can be ideal for a business that isn’t able to borrow what it needs from a bank or raise cash via an IPO. But as this article explains, minority investors may request certain rights, such as voting provisions that enable them to intervene in key hires and major asset sales.