When to Share a Piece of the Pie Does it make sense to trade ownership for services?
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Tony Marrero was ready to grow his fledgling Columbia, Mo., soccer apparel and equipment company, SoccerPro.com. So he did what any spunky entrepreneur does: He visited his local bank. And the banker laughed at him.
"He started to giggle when I sat down and talked to him," Marrero says. "That was the environment we had to deal with."
So, he improvised for a while and then connected with a local company, Growth Partner, which invests both capital and services in exchange for equity within the company. In 2007, they struck a deal and, in exchange for a 9 percent stake in the company, Growth Partner committed to provide services such as online marketing over a period of years. The company gains a greater stake in SoccerPro.comas various sales and growth levels are met, capping at a 33 percent ownership, as well as a back-end share of profits.