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Gerald, Esq
Gerald, Esq, Lawyer
Category: Business Law
Satisfied Customers: 3920
Experience:  30 years of experience
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I need help with answer about making and investment in a

Customer Question

I need help with answer about making and investment in a small company as to what I should expect equity wise from that investment in comparison to what I am putting up?
Submitted: 1 year ago.
Category: Business Law
Expert:  Gerald, Esq replied 1 year ago.

Hello,

Thank you for using Just Answer. I want to provide you the best service I can. Please feel free to ask any follow up questions you have.

I am an attorney with 30 years of experience; I hope to provide you information that will help you in resolving your question.

First you need to get a valuation of the company. One way to value a company is based on revenues of the company. You need to see the books and find out what the annual revenues are. Once you know what annual revenues are youcan base your equity position demand on the ration of your investment to the vauation.

For example if the valuation of the company is $100,000.00 and you are investng $10,000.00 then you want a 10% position.

There are other valuation methids as well, for example you can base the valuation on the value of asses held or you can use more than one method and take an average. But in any case you need to know the value of the company in order to ascertain what equity position you are going to demand.

I want you to be comfortable and satisfied with my attempt to assist you. Please, if you have ANY follow up questions, feel free to ask. Please note that I am generally unavailable Friday evening through Sunday.

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Good luck,

Please note: Information given is not legal advice. Only your local attorney can give legal advice. I can't establish or accept an attorney-client relationship with you. All posts are available for public viewing.