HACKER Q&A
📣 max_

Suppose your an Angel, how much equity would you demand for $120k?


Suppose your an angel investors that is interested in backing early MVP stage businesses (it may even be pre-revenue, pre-traction).

How much equity would you demand from founders for an investment of $120k.

Assuming you want to create a standard deal that you will exercise upon all incoming founders?

Also, potential founders how much equity are you willing to give up?

  👤 olivierduval Accepted Answer ✓
Not an angel but... the valuation of your actual company is 1) your actual results ==> 0 because it's an MVP ? 2) your potential results ==> tbd... but low because you're pre-traction 3) your investments ==> low because it's an MVP...

Without more specifics (like your previsional results and your market and how your're positionned and...), I would say that your business is not worth a lot. Let's say $10k.

If I give you $120k, it means that I would own 92% of your company... that wouldn't have any sense as I'm "just" an investor, not the business owner.

Actually, as an angel, I wouldn't take more than 20% of your equity... but I would give you maybe 5-10% of the money because of risks. So I would only give you $120k if your company is worth at least $1.2M (and ask for 20% of the equity, so $240k)

But I'm not an angel...

👤 zurfer
Benchmark it with the standard YC deal. 125k USD for 7%.[1] Now YC adds value on top (unlike your typical angel), but your average startup also doesn't get into YC.

The main questions is: Can the team you're investing in build a big valuable company?

[1] https://www.ycombinator.com/deal