[danieljeff]

I'm no expert but that sounds pretty bad.

You say you "need" the cash. What do you need it for? At the very early stages you may need cash much less then you think you do. Cash feels like it will remove headaches but you are adding an investor to the mix at terrible terms which could add headaches. Could be a wash.

[throwawayuc]

I've got a team of 8 full time people (half are salaried and half are only commission). We're hemorrhaging cash as we roll out our marketing plan. Plus we have features on our site like "Refer a friend, earn $10 when their first order ships." That money has to come from somewhere.

My only other option is to get as many personally-guaranteed credit cards as I can and just use them instead of taking on an investor. But this seems more high-risk.