You two agree to exchange 49% of a company for $50K. If the investor doesn`t sign the check for $50k, he has no right to 49% of the company. One is exchanged for the other.
So if the investor only signs a check for say $10K,he`s entitled to 10% of the company until he signs the next check, etc...
AN important question is how much money is needed to really operate the business. If only 10K is needed, take it and make a good profit, then up the valuation to say 200K. The next 10K would get only 5% additional percentage of the company, etc...
Not knowing what the business is, I`d say 50K for 40% is cheap if the business is really viable.
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