How do I value equity in a self-funded deal?

by a searcher from Indiana University - East

1 year ago

If I'm looking to bring on a few minority investors on a deal, what's a typical equity investment valuation? For example, if I'm buying a $2M company, financing through SBA for 80%, seller financing 10%, and looking for $100K outside equity investment to go alongside my own $100K equity, would you typically value the $100K outside investment as a % of the purchase price, meaning 5% in this case? What kinds of factors would cause adjustments in that equity valuation?

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searcher from Harvard University - Harvard Business School

I’d suggest looking into how the $100K check provider would respond to a decent coupon rate###-###-#### % per annum); I assume you don’t want to give up half of the business ownership for $100K. Depending on the size of business and current trajectory, a mezz option might be doable too

1 month ago | like reply | 0 likes

searcher from Harvard University - Harvard Business School

Anyone comment Searcher-CEO salary as % EBITDA? 10%?

4 months ago | like reply | 0 likes

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