If I were Eberhart, I would not take the deal and search for other investors under different terms. There are 3 primary reasons why I would not take the deal.
First, I would be concerned about the reputation and capabilities of the unknown Japanese investor. According to the case, Eberhart had been a businessman in Japan for nearly 10 years - in which time he has been able to raise millions of dollars through other reputable VC firms. If I were Eberhart, I'd want to leave my company in capable hands to ensure growth - and I'd be skeptical that the new investor would be able to do so.
Second, barring the reputation of the investor, the deal terms are not ideal - particularly the part about buying out Eberhart completely. As the case mentioned, there are so many growth paths that WineinStyle could take: (1) Expanding further to all regions of Japan, (2) Serving other Asian markets such as China and Taiwan, and (3) Distribution through big box retailers (e.g., Costco). These growth paths suggest that there is still value to be captured as a partial owner.
Finally, if cash is the only need that the company has, then there are other ways to raise funds. For example, the company can issue debt in order to invest further in their operations. They can also find ways to operate more efficiently, thereby freeing up more cash. Finally, Eberhart could issue more equity to existing investors - ones he knows and trusts, rather than seeking capital from new investors.
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