Questions

If someone proposed a deal with me to control 60% of my company and I had the remaining 40% is that a good deal considering my company not bringing in enough revenue? Included in the deal are resources to media equipment and business training to help me become a stronger salesmen.

I have been at C-level, as well as co-founded, founded, and advised many startups at various stages of their maturity cycle. What I have discovered (not just in startups) is a "good deal" depends on what you "really" want out of this deal. There's no quick answer to this and requires some examination of how you got to this situation and what you want to get out of it, both short and long term.

Is control of something that's not growing fast enough and needs more resources and expertise the key? Is the new equity investor bringing value that will increase the value of the entire company? And most important, what kind of partner do you want? Read the Founder's Dilemma, figure out what you want and then negotiate around that as equity/control and ownership aren't the only thing of value.

Separately, having done investment banking back in the day, there are lots of capital structures where you can maintain control whilst still bring in a partner.

Reach out if you need more advice.


Answered 3 years ago

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