You own a small relatively new company that is doing well, but you have maxed out on the bank loans. Your firm's growth is severely limited; you believe that additional funding would allow your firm to exploit much greater opportunities.
Currently, your firm has a value of $10 million. A hedge fund offers two investment options. First, $5 million cash in exchange for a 40% ownership share.
Second, $10 million cash today in exchange for a 55% ownership of the firm. Would you accept either offer? What factors would affect your decision?