New Topic
Post Reply
Follow Topic
Hello, I am new to starting up a software company and need some guide on this. My questions is i have the idea and know how to develop this software, so is it an intelectual property capital? Meaning i build it and my investor fund it or i have to fund it as much as my investor do? How does it work? I am poor in business and need help.
Thanks. What i was trying to ask was, let say they are interested and invest in my idea and ask for 50% . Now do i have to come up with the 50% investment also or i just take their 50% to develop my thing and i own 50% without investing any money? Do you get what i am trying to ask? hope you do.
Jasper2012,
Although each situation is unique because of the circumstances and the deal between investors and the company can be almost what ever both parties agree upon.
Generally, the funds invested purchase equity according to the valuation of the company. In your scenario, if you owned 100 shares of stock in the company (before the transaction) then the company sold 100 shares to an investor - you would each own 100 shares. Assuming no other shares were outstanding- you would each own a 50% interest in the company.
I hope this answers your question. If you want to discuss your specific situation, feel free to drop me a PM or contact me directly.
Thanks for answering Robert. Sorry, i still dont fully understand. Please explain more. For software company, intelectual property will be involved so it is different from other company investment right? There should be clause to protect my intelectual property when other parties invest in my company. Right?
Let me try to understand what you have answered. I own the company, so i own 100% share. Now if the copany sell 100% share to investers. Both of us will own 50% share but the invester actually paid 100% for it. I do not have to pay but only loose 50% share of my company. Right?
Any sample or case studies i can reference?
Thank you.
Hi.
If you are looking for great tutorials on how to start-up a business, you can check out this great tutorial website: http://www.businessplanjournal.com. It will be of great use to you and your company!
Good luck!
Jasper,
If you are the only shareholder, then you own 100% of the equity. (Let's assume that you own 500 shares) If the company sells an equal amount (another 500 shares) to someone else -then you will each own 50% of the company.
The amount the other party will pay for those shares is dependent on the valuation of the company at the time of the transaction. There are a number of ways (and factors) in establishing a company valuation. Intellectual property is often one of those factors.
Hope this helps. If you want to discuss your situation in detail, feel free to contact me directly or drop me a PM.
Hi.
If you are looking for great tutorials on how to start-up a business, you can check out this great tutorial website: http://www.businessplanjournal.com. It will be of great use to you and your company!
Good luck!
There is a great new website that launched that offers a unique way to interact with investors. BusinessMic.com is an online platform that allows entrepreneurs to post a short video giving an overview of their ideas and/or business plan. Meanwhile, there are numerous large investors that look through the videos and contact entrepreneurs who they are interested in. Right now they are allowing you to upload a video for only one penny!
The higher the rank of your video,
the more likely you are to be seen. So you can market your video to
others, boost your rating, and show investors that you already have
community support for your business. I think it's a very useful website,
you should check it out
Post Reply
