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? Why am I seeing others say 8% to 15%? That seems extremely high! Peter Thiel invested $500,000 into Facebook for a 7% equity stake. I am presently working on Project X, which many are saying has serious potential to become the next Facebook and possibly more of excuted well. I will be seeking capital from an investor, but this is the first time I am seeing that high of a number to give away for an angel or other investor at this early stage. I have been told the platform costs are $750,000 to $1,000,000, but we have presently talking to other firms that can develop the systems, and possibly at lower costs.

Theil invested 500k when Facebook had 9mn users. If you have that, you can raise way more and faster.
Historic examples don't help.

If you don't have anything developed, you can give away up to 15%, but the days of investing in companies who don't have a product market fit are pretty much over.
Only the hot spaces.


Answered 6 years ago

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