We have a potential investor -- a major offshore integrator -- who's thinking about investing in us by providing development services instead of cash.
There are well-established legal and tax methods to handle this and convert it into equity. But I wonder how the VC community views this type of investment. They usually aren't keen on strategics to begin with, and this is a further wrinkle (as the cost of those services is less than 50% of their FMV and there's a time value to them, unlike lump sum cash).
However, from my standpoint, if such an arrangement helps one of my investors make a 2x impact on my outbound cash flow, that seems like a win. In other words, I'd rather them give me development services that cost them $N (but worth 2.0-2.5 x $N)than a check for $N. Any experience with this that can be shared?