Friends and Family · Fundraising

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

Muamer Avdic

October 12th, 2016

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
As a founder, you’re always in fundraising mode (whether active or passive). In this course, we’ll teach you how to successfully raise follow-on capital, establish a valuation for your company, build an investor pipeline for your next round, and more...

Irwin Stein Very experienced (40 years) corporate,securities and real estate attorney.

October 12th, 2016

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.

Selvan Rajan

October 12th, 2016

If you don't have revenue, it is better to raise using convertible notes. Otherwise,an equity round is a better option.

Martin Omansky Independent Venture Capital & Private Equity Professional

October 12th, 2016

Impossible to answer without more info. Sent from my iPhone

Muamer Avdic

October 12th, 2016

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.

John Butler Founder and President at Quantumcyte, Inc, Director of Process Development at Stanford University School of Medicine

October 12th, 2016

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.

Martin Omansky Independent Venture Capital & Private Equity Professional

October 12th, 2016

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

Martin Omansky Independent Venture Capital & Private Equity Professional

October 13th, 2016

I can be reached at crucibleadvisorsatgmaildotcom. Sent from my iPhone

Arthur Lipper Chairman of British Far East Holdings Ltd.

October 12th, 2016

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 .

Muamer Avdic

October 12th, 2016

Hey Martin, please message me so we can discuss it in depth.  Thanks