Taking into consideration that the start up/inventor will put no $$ into the venture.
2007-07-26 00:26:11 · 3 answers · asked by EETCInvestor 1 in Business & Finance ➔ Investing
A VC would be very unlikely to put money into a business where the start up does not have a very substantial financial interest. There would be just too much risk. As for the equity position that a VC might require to make an investment, that somewhat depends on the negotiating position of both parties. 5% to 15% would be a ball park number, I imagine. But it certainly might run as high as 50%. Only a fool or a very desperate person would surrender more than 50%.
2007-07-26 00:59:27 · answer #1 · answered by Anonymous · 1⤊ 1⤋
It depends.
Usually when a company gets series funding from the VC community, they get a consortium. No single VC in the consortium will hold more than 50% since they will in essence control the company. The consortium will hold more than 50%. Their will be a board where each member VC will have a seat along with the founder and possibly an outside advisor.
It gets more diluted if the company has to go to series b or later fundings.
2007-07-26 08:53:07 · answer #2 · answered by joe s 6 · 0⤊ 0⤋
Venture Capialists usually don't invest in start ups, they invest in very small companies that have an established base and are looking to expand. If your talking about a "blank book" business the professional VCers aren't going to be interested.
2007-07-26 07:43:59 · answer #3 · answered by tiescore 6 · 0⤊ 1⤋