Debt, equity and a third thing that might work better

The coupon stream on mezz notes can be linked to income on specific assets (like covered bonds).

Subordinated debt and preferred shares are examples of mezz finance instruments.

as suggested in the article, you offer to double the investment by paying 4% of sales. that means you need to be bringing in $1.25 million in sales to repay the investor. using an (admittedly rough) assumption, let's say that takes 5 years to achieve. in the same time, if the investor had played it safe, their $25k would be (assuming compounded monthly interest at the 10% rate) $41k i.e. almost doubled anyway.

in the current economic climate 10% interest might be higher than expected and you could obviously fiddle around with all the numbers/assumptions to make it a more attractive investment but my instinct is that to sell this to the types of investors who would entertain something like this, it could end up being a more expensive way of raising finance than it initially appears.

EDIT: although I'm not sure if anyone's really doing corporate bonds that are linked to profits, that might be new.

Having said all that, I agree with Seth that society could do with being a lot more creative in how it funds businesses.