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New Venture Creation: from Idea to Investment - iCentre

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Equity offered – how much do you need?<br />

• What percentage does the company want <strong>to</strong> sell?<br />

– Often <strong>to</strong>o much or <strong>to</strong>o little<br />

– This is the wrong question<br />

• Set performance and fund-raising miles<strong>to</strong>nes<br />

– How much money do you need <strong>to</strong> achieve the next miles<strong>to</strong>ne?<br />

– Divide defensible firm value by funds needed <strong>to</strong> determine<br />

percentage <strong>to</strong> sell<br />

• Equity offered in the seed stage should usually be in the range of<br />

15-30%<br />

WholeTree <strong>Venture</strong>s – where <strong>Idea</strong> meets Experience<br />

5

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