I am fully aware that this is asked frequently, but it will differ a lot depending on the type of business:
I am just about to start looking for an investor for a startup in the UK, i dont want to release too many details but i'll geve you the basics.
I am looking to start up a business that should grow quickly into a franchisable brand (its a sports venue type venture) the brand-building pre franchise part should take 1-2 years. It is currently at the planning stage, and has no value as such.
I am looking to raise £150,000 and expect no help other than that from the investor(s)
Theoretically the business could turn over up to £500k in the first year, offering around £200k net profit. 2nd year up to £800k turnover, 400k proffit and after that fairly linear depending on how the franchise works out.
This is the deal that i am hoping to advertise: The investor gets 40% of the company until the point where they have received their investment back + 20% (so a 30k profit for them) hopefully this should take under 2 years. at which point they will retain 20% of the business for the forseeable future.
Does this sound reasonable? too good? or not good enough?