One thing Angel Investors typically want (although there is a wide range of options) is controlling...
One thing Angel Investors typically want (although there is a wide range of options) is controlling interest in the company, with the fund seekers buying the angel out from the profits of the company. What would you tell a friend, where an angel investor was willing to put up 90% of the funding for a project, for a 60% interest in the business with the friend buying him out in five years. Why would an angel investor walk away otherwise?
Homework Answers
- Feasibility of the projection to buy out in 5 years
- To buyout a 60% stake for 90% of total funding amount, the business will require to earn more than 40% return on investment every year to buy out atleast on the same valuation if not more
- Confidence of the Promoters
- Valuation at the time of buyout
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One thing Angel Investors typically want (although there is a
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Paul knew that this offer would strengthen his financial
picture…but did he really want a partner?It was going to be a long
night.
read the case study above and answer this question
what would you do if you were Paul with regards to financing,
and why?
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