How to balance between valuation and owning majority share?

Discussion in 'Growing and Managing a Business' started by mikewelsh, May 25, 2011.

  1. mikewelsh

    mikewelsh
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    I'm looking for investment for my company.

    I need $0.5mil investment, but want to maintain majority share (to keep me motivated and they also do not want to own majority). So if I offer the investor 40% share in return, the valuation of the company is $1.25 mil, which they think is too high

    How can I balance between keeping a competitive valuation and yet still maintaining majority shareholding?
     
  2. Fergal

    Fergal
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    If you offer the investor a 49% share of the company in return for their $0.5M investment, that would value the company at $1.02M. You would still own 51% of the business which would be a majority share. Would that still overvalue the company or is that a figure the investor could work with?

    Alternatively is there any way that you could reduce your costs, so that you could accept less than the half million investment and still have the funds required to build the company?
     

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