I am currently talking with a potential investor who is asking for a 90% equity stake in my start-up for a $1 million investment.
We have both agreed that the EBIT in year three will be $5 million and we would be looking to sell the business at this time for $30 million.
In my opinion a 30% equity stake would be more realistic for this potential investor. What do you think?
You are in a difficult situation and it raises a range of important issues about valuation, motivation, and capital strategy. All fast growing and early stage companies require capital, whether it is the founders own funds, or seed funds from “friends and family”, or angel capital from professional investors.
To read the full, original article click on this link: Equity Investment, Advice, Potential Investor Wants a 90% Stake in an Australian Small Business Start-up: Phil Alexander, Mentor
