How much equity should an investor get?

By : Raad Ahmed

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HOW MUCH EQUITY SHOULD AN INVESTOR GET?

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YOU’RE RAISING A ROUND

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GOT SEVERAL INVESTORS INTERESTED

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BUT HERE COMES A QUESTION…

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HOW MUCH EQUITY SHOULD AN INVESTOR GET?

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AS LITTLE AS POSSIBLE… BUT LET’S BE MORE SPECIFIC

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Angels fly low

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Angel investment is small

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$10K - $250K

Angels don’t expect much equity

5 - 15%

VCs feel big

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VCs invest as much as they can

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$500K+

But they take more equity

20%+

But you can run the valuation up

(and equity down)

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Traction works in your favor

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So make sure to tell an investor all about your

happy & (hopefully) paying users

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Great team is a great argument

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If you have a stellar team with great track record, network etc. it’s something

that’ll bring your valuation way up

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Talk to other entrepreneurs

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Ask other entrepreneurs how much equity has a particular investor got when they we’re raising with him

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List your assets

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Product? Customers? Code? Team members? Letters of Intent?

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List your assets

They have value and will drive the valuation up

And if you’re not sure about something….

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VISIT

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