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What is a reasonable amount of equity to give up at the friends/family stage?

I would love to hear peoples thoughts on the right amount of equity to give up at this stage in the funding process.

A. Is it better to raise a round of debt?

B. If it is an equity round, what is the right amount of equity on 10-20k in investment?


Thanks

9 Replies

Selvan Rajan
1
0
Selvan Rajan Entrepreneur • Advisor
Mobile & middle-tier architect
If you don't have revenue, it is better to raise using convertible notes. Otherwise,an equity round is a better option.

Irwin Stein
1
0
Irwin Stein Advisor
Very experienced (40 years) corporate,securities and real estate attorney.
There is no one right answer to this question. How much money do you need? What are you going to accomplish with it? and a few other factors need to be considered.
Martin Omansky
1
0
Martin Omansky Entrepreneur
Independent Venture Capital & Private Equity Professional
Impossible to answer without more info. Sent from my iPhone
Muamer Avdic
0
0
Muamer Avdic Entrepreneur
Founder at Ladels | Owner at Chasing Animals Co.
The MVP is completely functional/being tested by a few close colleagues. The company is pre revenue/no traction. As of now, the company is completely bootstrapped so raising around 20k would give us a few months of runway to be able to prove the concept, get some traction and generate revenue.
Martin Omansky
0
1
Martin Omansky Entrepreneur
Independent Venture Capital & Private Equity Professional
Still not enough info. If you have a business plan, including financials, I might be able to help. Please make sure you state what each founder has contributed substantively. Sent from my iPhone
Muamer Avdic
0
1
Muamer Avdic Entrepreneur
Founder at Ladels | Owner at Chasing Animals Co.
Hey Martin, please message me so we can discuss it in depth. Thanks
John Butler
0
0
John Butler Entrepreneur
Founder and President at Quantumcyte, Inc, Director of Process Development at Stanford University School of Medicine
In a friends and family round you offer a convertible note or a SAFE. At this stage you do not want to have a valuation.
Arthur Lipper
0
1
Arthur Lipper Entrepreneur
Chairman of British Far East Holdings Ltd.
If you expect a good profit margin and growing revenues then it is far better to fund the company by selling a royalty of sufficient size to reach the point of being cast flow positive. Whatever amount of equity you sell now you will regret if the company becomes successful. See the articles at www.Royalties.Website .
Martin Omansky
0
1
Martin Omansky Entrepreneur
Independent Venture Capital & Private Equity Professional
I can be reached at crucibleadvisorsatgmaildotcom. Sent from my iPhone
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