Input on startup equity share, SME, IT, Investor, etc.

WalMartShopper's picture
Rank: Neanderthal | 2,757

Starting up an ecommerce business that is in very early stage, what details do you need to know to make a somewhat educated hypothesis on equity breakdown.

Person 1: SME that came up with the idea, is providing thorough input etc., $0 startup capital invested other than time.
Person 2: Providing IT/developers and also has several other companies. Estimated startup capital is discounted salary for devs., not astronomical.

Person 2 wants to create umbrella and group several companies, some already profitable, to solicit angel/vc of about $500k with valuation at approx. $10m. Not sure on return/exit horizon but probably 4-5yrs and not sure on return but probably around $3-5m.

What would be your thoughts on ownership breakout and what solutions would you come up to protect yourself?

I know this is very little info so please ask any questions that would help make a decision. I would be glad to PM more detail as well, thanks.

Net revenue projections are obviously pie-in-the-sky at this point but would estimate low/high at;

YR1 25-65k
YR2 125k-175k
YR3 750k-1.25m
YR4 2.5m-4.5m
YR5 5m-15m

Comments (1)

Mar 2, 2020