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We're sitting with a situation where we have been given two different offers for seed investment. The first is more than double the amount of the other, but from someone not in the tech industry, and no fame. He will be able to help us with business contacts, but nothing with regards to tech. The other offer is from someone very famous in the tech industry, with lots of connections, and comes with promises of landing us articles in some of the major tech magazines.

I know I'm not giving a lot of information, and surely it depends on how important PR is for your company's success. In our case, we will be able to become profitable without having a million users, we have created a tool that is useful from day one, and not something that hinges on a viral effect. That being said, good PR can obviously help us reach profitability much more quickly, and perhaps avoid second-round funding all together.

My question is, generally, how do you go about making a decision like this? What factors should I consider, how should I estimate the value of these things, and weigh them against each other?

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If they both offer something valuable then why not take investment from both - just take half from each – TimJ♦ Dec 6 '11 at 14:54
Nice thinking Tim – Sunil Dec 6 '11 at 16:46

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I would also be looking at how much money do you need to reach your goals (the answer may be different with the two investors offering different amounts of help).

Also, what are the terms of the offer. If a great tech "celebrity" offered $100K for 99% of the company, that is hardly a good deal by any measure.

Keep in mind too, this doesn't have to be the last money you raise, and having the well-known tech person might make it easier to raise more in the future. In fact, there may be no reason you can't take some form of BOTH offers. Go back to the investor offering more money, explain that you only need 1/2 of his investment, and with the other investor involved this is a better opportunity for everyone all around.

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Which option offers you what you need?

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I know the response above was crazily short, but the answer is important ;-) – Steve Jones Dec 6 '11 at 13:01
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Does this have to be 'either / or'? Sounds to me like you've met two highly complementary prospective seed investors - bringing money, contacts and P.R. reach. I'd want to work to secure both investors.

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