Many people think that unless you're raising millions of dollars, your best bet is to keep financing simple. Negotiating intricate deals takes time, and it doesn't take long to build up substantial legal and accounting bills. Occasionally, though, you hear about interesting exceptions -- relatively tiny deals with features usually reserved for much bigger transactions. Consider one put together by Dennis Stemp, chief executive of Dennis Stemp Publishing, in Pittsburgh.

Stemp, whose one-year-old company publishes a bimonthly magazine for motorcycle enthusiasts, set out last fall to raise $75,000 to expand circulation and buy computer equipment. Unable to get a bank loan and unwilling to part with a lot of equity right off the bat, he talked with a group of private investors he had met through a local small-business group. His goal, he explained, was to find passive investors looking to put their money to work for at least two years. Four meetings later he had commitments from four individuals. The terms weren't shown to a lawyer until he and the investors were in agreement. Here are some of the more important features of the deal:

* Low initial cost. Stemp didn't want to have steep loan payments, so the $75,000 financing is structured initially as a two-year note at 8%, and during that time his only requirement is to pay interest. To keep his costs down and to minimize investors' risk, he doesn't receive the money in one shot but in three installments linked to specific milestones. In addition to paying his four investors interest and giving them a senior position in any liquidation, Stemp also gives them opportunities to participate on the up side; together, they can purchase 25% of the company's stock at a low set price anytime within the first two years.

* A call for the owner. Stemp's business plan projects revenues of about $800,000 and profitability by the third year. He'll need to pay off the notes totaling $75,000 starting in early 1994. He also has the right to buy out, or call, the investors' stock for another $75,000 before the end of the second year. If he elects to do that, the investors will double their money, and they'll be out of the picture.

* A put for investors. If Stemp doesn't call the stock during the initial two years, investors can take the initiative to get back their money during years three to five. They can ask the company to buy back their stock using a feature known as a put. If they decide to sell their shares, the company is obliged to buy them out for $150,000. What if Stemp doesn't have the money? Under those circumstances, the outside investors have the right to determine by a two-thirds vote the appropriate action, which might be anything from buying out some of the stock to liquidating the business.

* No board seats. In contrast with many equity-type deals, Stemp's outsiders aren't part of any formal board. They can review annual budgets and are encouraged to take part in an advisory board. But they don't have the legal standing investors typically have -- that is, unless the business runs into trouble.

-- Bruce G. Posner