How Much Should I Give An Investor?

What percentage should you give an investor?

Angel investors typically want from 20 to 25 percent return on the money they invest in your company.

Venture capitalists may take even more; if the product is still in development, for example, an investor may want 40 percent of the business to compensate for the high risk it is taking.

What percentage should you give angel investors?

Angel investors usually take between 20 and 50 percent stake in the companies they help. Sometimes the exact amount is determined strictly by negotiation. However, frequently angel investors use a company’s valuation as a measure for how much ownership they should take.

How much do investors expect in return?

In general, angel investors expect to get their money back within 5 to 7 years with an annualized internal rate of return (“IRR”) of 20% to 40%.

How much of a company should an investor own?

Generally, founders who intend to stay with the business long-term should retain the most control. I have heard it recommended that one individual own at least a 51 percent of the company, to provide consistent decision-making when resolution is needed.