Taking on a business partner, especially one who will have the majority shareholding is a big step.
To do so with a person you do not know is very risky, unless you have explored this in detail and satisfied yourself that this investment is good for you and your company.
You have not said what role this investor plans to take in the business, but even if he is planning on being a background source of finance only, you will have to interact and share in the strategic decision making with him, especially in the key area of growing the business, which is the reason for the investment. Will you be able to forge a sustainable partner relationship?
You will need to clarify the extent of control and involvement that the investor intends, and whether that involvement will add expertise or simply change your way of working, and whether you are able to accept whatever degree of control he chooses to exercise.
He will have 51% of the shareholding and so will have the ability to elect the directors, and through them set policies and strategy, and hire and fire the CEO, so he has wide powers if he chooses to exercise them. It is vital to check what has happened with previous investments made by this venture capitalist, and get feedback from entrepreneurs he is in partnership with.
Finally you need to be very clear on what his motivation is for offering this investment, and your motivations for considering it.
- Does this fit your business and personal strategy?
- Is there an element of quick fix?
- How does the long term vision of your company change, and are you OK with that?
If you (or he) is trying to fix a short term problem, or just seeing the immediate additional capital but entering a long term partnership, you may be doing the wrong thing. A divorce between business partners can be as traumatic as a divorce between spouses, so tread very warily.