What is a reasonable percentage of equity that I should expect to give up to an angel investor in exchange for their investment?
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I'm not sure where to begin answering that question, without asking you a few dozen, including:
Without that information, it's hard to answer your question, other than saying, "Angel investments can garner anywhere from 5-50% of the equity in a company." |
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To be able to assess the importance of the money you are getting from an investor, 1st you have valuate your company. This is not an easy task because several factors come into play. Once you have a logical value to which the investor agrees, it is easy to have a percentage of his share based on how much oney he wants to invest. To valuate the company there are many parameters, here are some in random order. - You skills,competences and past experience. If you have successfully started companies before, or if you come from big companies like google or Microsoft, or if you have very good connections. All of this adds more trust in you and investors will believe that you will be able to succeed in your startup. Of course this adds points to the valuations
All of this will help you give a value to your company thus knowing what percentage the ivestor money will constitute. You have to know that you might raise money from different investors and each investor will force his own valuation. That's what happened to Facebook: Microsoft valued it to 15bn$ and bought 2% shares while a russian investor valued it to 7bn$ |
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