distributions on investor funding

by a searcher from Cornell University

3 months ago

If I raise 10% of the purchase price in exchange for 10% equity what does that offer/structure typically look like for the investor? Do they typically get annual distributions? 

If so, what do they get 10% distribution from? FCF?

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4 comments

searcher from Harvard University

2x them seems fairly standard so 10% money -> 20% equity. How they get distributions will be in part a structural decision and in part a business strategy decision. Investors piled into plenty of businesses with absolutely no immediate cashflow prospects right, the range goes through to venture funding SpaceX…. Think you would have a more productive conversation here if you were zoned in on industry, which will naturally filter investor profile and what you could do for them anyways, etc….

3 months ago | like reply | 0 likes

investor from Rikkyo University (St. Paul's University)

Multiple of 1.5 or significantly higher, especially for self funded

3 months ago | like reply | 0 likes

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