When the business had been
in operation for nine months, some customers didn’t pay on time and the
business was running short of cash. I knew they would eventually pay, so I loaned the company $10K. I didn’t make
any formal documentation because I was going to get the money back at the end
of the month.
At the end of the month,
we had to order more inventory because sales were growing faster than expected.
With my track record, I raised a seed
round from friends and family and one outside investor. I wanted to get my
loan back because I don’t take a big salary. The independent investor said there was no legal agreement in place and
that if I took the money out, he wouldn’t invest.