venture-capitalI want to start a website.For that I am looking for some venture capitalists.But I have no clarity that how much share do they want in my website.Does anyone know this?Do the venture capitalists want share more than 15%?
It depends on how much capital you are trying to raise and how much your company is valued at. If your company has a premoney valuation of $1 million and you own 100% of it and you took an investment of $200,000 from investor B then your post money valuation is $1.2 million. Since Investor B owns $200,000 (17%) of that value, you get diluted to 83% (100-17).
There are consultants and accountancy companies that can do a premoney evaluation for you. Usually it involves assessing your assets like equipment and property, your intellectual property, your sales forecasts etc. Investors like to low ball you on this so they can get a higher percentage from your business for the same amount of investment. So it is a good to have an independent assessment when you go for investment.
Calculate the amount you want to raise by doing a financial plan and assessing your expenses and income. If your income or current capital is insufficient to buy the tools or hire the people you need then you can calculate the investment you need based on the gap. Remember, the money money you take from an investor, the more ownership you have to give. Investors also don’t like it when you have to go for multiple rounds of investments because it dilutes their ownership.
VCs normally have a range of ownership they like to keep. It depends on the investment round, the amount being invested and how interested they are in your business.
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