Maintaining “Woman Owned Business” while taking on investor
To qualify as a woman owned business, a woman or group of women must own shares worth 51% of the business. If your investor was a woman, the entire 5% could come from her share of the company without affecting the 51% ownership requirement. Could you find a woman to add as an investor? If you each had your shares diluted 5%, She would be down to 48.45% ownership, and you would be down to 46.55% ownership. The only way for you to get back to a 51% female ownership situation would be to give a 2.55% ownership stake (from your share) to a wife, sister, mom, girlfriend, or any other woman who you think should benefit from this arrangement. This would still put you down at 44% (effectively taking the whole 5% from you) but by giving some of your share to someone else, it does require your partner to make some of the sacrifice, while still benefiting someone you care about (if you have someone you would like to give that benefit to). In summary, this is what it would look like: In addition to finding another woman investor, you have an equitable option that is not unreasonable: ask your partner to buy out 3% worth of shares from you (which then gives her 54%, allowing you to then sell 5% to an investor and have it not dilute her below 51%: .54 * .95 = .513).   That keeps you whole but also keeps your woman-owned-business status.
No necessarily.   Do you bring any unique value to the company other than a sweaty pair of hands?   Did you bring a unique skill, bring in investors, have relationships that are able to get the business off the ground, have intellectual property worth something to the business?  Did you cultivate the unique seeds or strain on your own before the business started?  These are all things one takes into consideration when dividng up shares in a company.  The question you need to ask yourself is could someone else have provided the sweaty hands other than you?  If yes, then unfortunately you provide no unique value to the business and that will be reflected in how share are portioned.   I'm speaking as a co-founder in a Silicon Valley tech company.   I've spent a lot of money with lawyers to understand this.   You should definitely talk to a lawyer. Flipping usually refers to real-estate transaction: you buy a property, improve/renovate/rehabilitate it and resell it quickly. The distinction between flipper and investor is similar to the distinction between trader and investor, even though the tax code doesn't explicitly refer to house flipping. Gains on house flipping can be considered as active business gain or passive activity income, which are treated differently: passive income goes on Schedule E and Schedule D, active income goes on Schedule C. The distinction between passive and active is based on the characteristics of the activity (hours you spent on it, among other things). Trading income can similarly be considered as either passive (Schedule D/E treatment) or active (Schedule C treatment). Here's what the IRS has to say about traders: Special rules apply if you are a trader in securities, in the business   of buying and selling securities for your own account. This is   considered a business, even though you do not maintain an inventory   and do not have customers. To be engaged in business as a trader in   securities, you must meet all of the following conditions: The following facts and circumstances should be considered in   determining if your activity is a securities trading business: If the nature of your trading activities does not qualify as a   business, you are considered an investor... Investor, in this context, means passive income treatment (Schedule D/E). However, even if your income is considered active (Schedule C), stock sale proceeds are not subject to the self-employment tax. As you can see, there's no specific definition, but the facts and circumstances matter. You may be considered a trader by the IRS, or you may not. You may want to be considered a trader (for example to be able to make a mark-to-market election), or you may not. You should talk to a professional tax adviser (EA/CPA licensed in your State) for more details and suggestions. Are you a woman seeking man in Sydney, and have been having trouble because of your busy schedule? Thanks to Mirabela Dating Sydney, you don’t have to take the stress of dating, as we do it for you, and help you find the right match. "The (U.S) ""accredited investor"" laws apply to investments in the U.S. Foreign countries may or may not have their own laws regarding investment in startups, and if so, the foreign laws apply. One way around the net worth minimum is to be a member of the management team. ""Active"" (management) investors don't need to be accredited because they can see what's going on on a day to day basis. The accredited investor laws apply to the target companies, not to the investors. Basically, a start-up company can't take ""other people's money"" from a non-accredited investor. But you can invest ""your own"" money in it if you are a manager." It is just marketing and market segmentation.  We could all shop at WalMart, but some people prefer wider aisles and mood music so they shop at Macys.  Other people are fine shopping at Target or online. Women face no different challenges.  The challenges in investing depend on who you are, where you are in life and what your goals are.  I think it is fine to target a certain demographic over another, but they are just trying to make a niche. I prefer to not think about worst case scenarios, and I view all financial advisors with a healthy skepticism, regardless of gender. "It should be pretty obvious that without knowing what sort of assets the company owns, and what sort of net earnings are being generated it's impossible to say what a $20k equity investment should get you in terms of ownership percentage.   With that said, you want to look at a few to several years of books, look for trends.  Some things to understand that might be subtle red flags: It's extremely common for early stage investors to essentially make loans rather than strictly buying shares.  In the worst case scenario creditors get to participate in liquidation proceedings before shareholders do.  You may be better off investing in this business via a loan that's convertible to equity at your discretion.   Single owner service companies are difficult because all of the net earnings go to the proprietor and that person maintains all of the relationships.  So taking something like 5 years of net earnings as the value of the company doesn't make much sense because you (or someone else) couldn't just step in and replace the owner.  Granted, you aren't contemplating taking over the business, but it negates using an X years of net earnings valuation method.  When you read about valuation there is a sort of overriding assumption that no single person could topple the operation which couldn't be farther from the truth in single employee service companies.  Additionally, understand that your investment in a single owner company hinges completely on one person's ability and willingness to work. It's really vital to understand the purpose of the funds.  Someone will be hired?  $20,000 couldn't be even six months of wages... Put things in to perspective with a pad, pen and calculator.  Don't invest in the pipe dream of a friend of yours, and DEFINITELY don't hand this person the downpayment for their new house.  The first rule of investing is ""don't lose money,"" this isn't emotional, this is a dollars and cents pragmatic process. Why does the business need this money?  How will you be paid back?   Personally, I think it would be more gratifying to put $20k in a blender and watch it blend, this is probably a horrible investment.  The risk should just be left to credit card companies." I'm not necessarily saying that VC is the way to go.  It works for some, not for others.  Personally, if my company idea takes off, I'd try to avoid it if at all possible.  However, the article was written in a way that any point she had in her post was overshadowed by her bitterness and excessive obscenities that it comes off as unprofessional and not worth reading.  It takes away from the valid points therein. Sit down with professional with knowledge about eldercare issues. Know how your options regarding the property ownership can impact the services they qualify for. Even making a change in ownership can impact their eligibility for certain programs. Some of which can reach back to events in the recent past. Also if you own it but she will get some of the profits when you sell, she could still be considered an owner, which can impact eligibility for programs. This is in addition to the issues with the lender, the IRS, and your estate.