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.
I would ask myself what this angel/investor put on the table except for money. If it's just money, you can use some evaluation techniques to calculate how much he deserves. If you think he will promote to the company other than its money, I would build an equity structure that will make it happen. I have some concepts in mind, we can further discuss it.
Answered 6 years ago
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