How much equity should a 1000 dollar investment buy?
April 13, 2009 by Debt Equity Financing
Filed under More Equity Answers
Can you answer slither’s question about Equity?:
If someone (friend, relative, etc) wants to invest in a small business venture, how much equity should be given for a 1k investment. Should equity be given for this relatively small amount? What kind of terms are normal for this size of an investment into a new venture that has no track record of profits.
Reverse Equity Mortgage
If someone (friend, relative, etc) wants to invest in a small business venture, how much equity should be given for a 1k investment. Should equity be given for this relatively small amount? What kind of terms are normal for this size of an investment into a new venture that has no track record of profits.
Reverse Equity Mortgage
It would buy one thousand dollars worth of equity. The percentage of ownership in the company would depend on what other people put in. If other people put in $99,000, then the investor who put in $1,000 would own 1% of the company.
That’s the theory. The fact is that when money changes hands, ordinary people get extremely greedy and dishonest.
99.9%
seriously, just learn how to value your business or don’t accept the investment.
Yes 99% of investment
You are talking about a business and not a company? There is a big difference in terms and conditions.
It depends on the amount of investors and the amount of money that is being poured into the total venture. If you care, ask a contract lawyer to look over the crap.
Many times when there is a new venture with no track record, there are “Angel Investors”, individuals who believe in the venture’s purpose and start. Angel investors donate money to the cause, use it as a tax write-off (most likely) and don’t always ask for a stake in the venture,