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on shark tank you often see deals where an investor say I'll give you $100k as debt. But i'd like 5% equity in company as well.

equity is taken right away.

debt is paid over time.

from one perspective it looks like I'm giving X and asking for X+1.

But from another perspective I'm not asking for any interest on money, loan won't compound. It's not something that will tie anyone down perpetually.

Also another way to look at it say you can say I will loan you 100k but ill buy 5% for $1. and all the sudden this sounds lawful.

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  • I think it depends on whether equity is considered the same jins (category) as cash. If they are, then I think its riba. If not, then as long as he requests strictly less than (even a penny less) than the loaned amount back, I think it's OK as then the equity is considered as being exchanged for that difference. I don't know whether they are the same jins, so I can only give a vague answer. Allah knows best.
    – moinudin
    Feb 23, 2021 at 16:46
  • thanks for sharing your thought, i see your point that could be it. still, i'd like a more comprehensive and sourced answer.
    – Muhammad Umer
    Feb 23, 2021 at 19:22

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