Questions

Here is the catch: This new start up is an new idea founded out of an existing company that is already funded. This existing start up's original investors wants to claim 55% of this new Start Up but has only put $ 100 000 in cash to get it through prototyping, consulting and hiring two developers for its MVP. This new start up requires around $ 1 mil to go to market, it is offering 10% equity which effectively values the business at $ 10 mil. Question: With the existing shareholders wanting to claim 55% for investing $ 100 000, and the real funding requirements of $ 1mil, how does this effect the companies valuation? I am willing to have a 5 min call on this asap with the best possible person who can help me sum this up

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