Questions

I thought 5% to 7% of equity is more than enough for an investor in a startup that has the potential to be the next Facebook, Amazon or Google? I was reading earlier where investors want 10% to 15%? That seems high. When you look at what other VC’s have asked for with companies such as Facebook, Google, etc

Just remember equity is a form of value exchange, always remember if you don't like the numbers you hear, negotiate. Sometimes, you don't know what you can get if you don't ask, that goes for both parties. However, since you do not have a product and don't have real numbers, even small-scale, your risk perception is likely very much higher, so to an investor coming in their money, currently (high value) versus equity in your company at current stage(high risk), equal a higher equity percentage, due to value perception. Risk/Reward factor! Reach out to me if you need more help


Answered 6 years ago

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