I was talking to a friend who is a venture capitalist. I have a new idea, have done research, and built a prototype. The VC says that if he funds me, then he would take a 50% stake in the company. Does that seem fair?
2007-02-28 08:10:09 · 3 answers · asked by Shasta McNasty 2007 2 in Business & Finance ➔ Other - Business & Finance
If you want their money you have to agree to their terms. I would try other avenues first before I take VC money. I don't want to give up control to someone that could make you life a living nightmare. Friends are friends but business is business. Never relinquish majority control. If you go the VC route make sure you have at least 51% stake so that you are in control, because if you give up half you will have to work with him to get anything done.
Get it in writing. Don't share too much of your idea with him because people steal ideas all of the time. Have him sign a confidentiality and non compete clause.
Contact the SBA to see about loans you may be eligible for. Go to a bank. If you can't make headway these ways go the VC route, but be cautious.
2007-02-28 08:23:40 · answer #1 · answered by R Worth 4 · 1⤊ 0⤋
Hi there,
Yes i think it does, well at least i know that is the normal situation when other people are providing the funding. Obviously the percentage is negotiable and if it was me i would only let him have 49% and keep 51% for youself that way you would keep the majority and there for full control of the business.
Cheers, ToNy!
"Sucess.Trail"
2007-02-28 08:20:01 · answer #2 · answered by Anonymous · 0⤊ 0⤋
If you HAVE to have VC, then 50% of something is better than 100% of nothing from your perspective.
2007-02-28 08:19:18 · answer #3 · answered by Homer J. Simpson 6 · 0⤊ 0⤋