For Investors/ Entrepreneurs in the list, i have 2 questions regarding the subject; 1) Who is responsible for making the term sheet, Investor or Entrepreneur? 2) What's the ideal equity percentage that's given to an Investor funding an early stage start-up ? NB: If anybody has a term sheet template specifically for Kenyan market, please do share. -- Vincent Mosoti, Analytics/Business Intelligence Consultant. Skype: vmmosoti Phone: +254 722 972805 LinkedIn: ke.linkedin.com/in/vmosoti
On Fri, May 20, 2016 at 3:54 PM, Vincent Mosoti via skunkworks < skunkworks@lists.my.co.ke> wrote:
For Investors/ Entrepreneurs in the list, i have 2 questions regarding the subject;
1) Who is responsible for making the term sheet, Investor or Entrepreneur? 2) What's the ideal equity percentage that's given to an Investor funding an early stage start-up ?
This is a very general question that usually requires a very specific answer. Every case is unique and a lot of the terms will depend on the state of the company when the investment is made. There are lots of numbers out there - employ your google fu. However, speaking from personal experience (observation of 9 companies): - Investor usually provides terms, the entrepreneur responds to the term until an amicable solution is reached or one party walks away. - Equity percentage depends on valuation of the company vs money being injected. In my observation you're looking to give away roughly 20% of the company at every stage for the money required.
NB: If anybody has a term sheet template specifically for Kenyan market, please do share.
-- Vincent Mosoti, Analytics/Business Intelligence Consultant. Skype: vmmosoti Phone: +254 722 972805 LinkedIn: ke.linkedin.com/in/vmosoti
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1) Who is responsible for making the term sheet, Investor or Entrepreneur?
Experienced investors will have one to kick start the negotiations otherwise its up to the founder.
2) What's the ideal equity percentage that's given to an Investor funding an early stage start-up ?
Depends on the valuation and money raised but generally expect between 15-20%. The ideal should be to not lose control(retain majority, issue prefs, etc...) and to put in protections in the shareholders agreement that protect the founders and certain decisions. All the investors are putting in is money while the founder is taking all the risk to create value. On a side note, there is an event[1] coming up on the Angani implosion that I would expect to cover these issues and the consequences of a poorly structured investment with bad investors. 1. http://www.strathmore.edu/en/calendar/79/529-SAEN-Lessons-from-Silicon-Savan... /CJ On Fri, May 20, 2016 at 5:54 PM, Vincent Mosoti via skunkworks <skunkworks@lists.my.co.ke> wrote:
For Investors/ Entrepreneurs in the list, i have 2 questions regarding the subject;
1) Who is responsible for making the term sheet, Investor or Entrepreneur? 2) What's the ideal equity percentage that's given to an Investor funding an early stage start-up ?
NB: If anybody has a term sheet template specifically for Kenyan market, please do share.
-- Vincent Mosoti, Analytics/Business Intelligence Consultant. Skype: vmmosoti Phone: +254 722 972805 LinkedIn: ke.linkedin.com/in/vmosoti
_______________________________________________ skunkworks mailing list skunkworks@lists.my.co.ke ------------ List info, subscribe/unsubscribe http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks ------------
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Thanks rsohan and Charles for your pointers. On Sat, May 21, 2016 at 10:40 AM, Charles Juma <itscharlesjuma@gmail.com> wrote:
1) Who is responsible for making the term sheet, Investor or Entrepreneur?
Experienced investors will have one to kick start the negotiations otherwise its up to the founder.
2) What's the ideal equity percentage that's given to an Investor funding an early stage start-up ?
Depends on the valuation and money raised but generally expect between 15-20%. The ideal should be to not lose control(retain majority, issue prefs, etc...) and to put in protections in the shareholders agreement that protect the founders and certain decisions. All the investors are putting in is money while the founder is taking all the risk to create value.
On a side note, there is an event[1] coming up on the Angani implosion that I would expect to cover these issues and the consequences of a poorly structured investment with bad investors.
1. http://www.strathmore.edu/en/calendar/79/529-SAEN-Lessons-from-Silicon-Savan...
/CJ
On Fri, May 20, 2016 at 5:54 PM, Vincent Mosoti via skunkworks <skunkworks@lists.my.co.ke> wrote:
For Investors/ Entrepreneurs in the list, i have 2 questions regarding the subject;
1) Who is responsible for making the term sheet, Investor or Entrepreneur? 2) What's the ideal equity percentage that's given to an Investor funding an early stage start-up ?
NB: If anybody has a term sheet template specifically for Kenyan market, please do share.
-- Vincent Mosoti, Analytics/Business Intelligence Consultant. Skype: vmmosoti Phone: +254 722 972805 LinkedIn: ke.linkedin.com/in/vmosoti
_______________________________________________ skunkworks mailing list skunkworks@lists.my.co.ke ------------ List info, subscribe/unsubscribe http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks ------------
Skunkworks Rules http://my.co.ke/phpbb/viewtopic.php?f=24&t=94 ------------ Other services @ http://my.co.ke
-- Vincent Mosoti, Analytics/Business Intelligence Consultant. Skype: vmmosoti Phone: +254 722 972805 LinkedIn: ke.linkedin.com/in/vmosoti
Juma as done well in answering, but I am thinking term sheet comes from the investor because it contains set of conditions to deal with the outcomes of possible risks that comes with him investing. However, termsheet should be negotiated and renegotiated to avoid later misunderstanding. 10-20% is ideal on the first phase (this largely depend on your financial need). regards, Isaac Kiplagat On 23 May 2016 at 07:01, Vincent Mosoti via skunkworks < skunkworks@lists.my.co.ke> wrote:
Thanks rsohan and Charles for your pointers.
On Sat, May 21, 2016 at 10:40 AM, Charles Juma <itscharlesjuma@gmail.com> wrote:
1) Who is responsible for making the term sheet, Investor or Entrepreneur?
Experienced investors will have one to kick start the negotiations otherwise its up to the founder.
2) What's the ideal equity percentage that's given to an Investor funding an early stage start-up ?
Depends on the valuation and money raised but generally expect between 15-20%. The ideal should be to not lose control(retain majority, issue prefs, etc...) and to put in protections in the shareholders agreement that protect the founders and certain decisions. All the investors are putting in is money while the founder is taking all the risk to create value.
On a side note, there is an event[1] coming up on the Angani implosion that I would expect to cover these issues and the consequences of a poorly structured investment with bad investors.
1. http://www.strathmore.edu/en/calendar/79/529-SAEN-Lessons-from-Silicon-Savan...
/CJ
On Fri, May 20, 2016 at 5:54 PM, Vincent Mosoti via skunkworks <skunkworks@lists.my.co.ke> wrote:
For Investors/ Entrepreneurs in the list, i have 2 questions regarding the subject;
1) Who is responsible for making the term sheet, Investor or Entrepreneur? 2) What's the ideal equity percentage that's given to an Investor funding an early stage start-up ?
NB: If anybody has a term sheet template specifically for Kenyan market, please do share.
-- Vincent Mosoti, Analytics/Business Intelligence Consultant. Skype: vmmosoti Phone: +254 722 972805 LinkedIn: ke.linkedin.com/in/vmosoti
_______________________________________________ skunkworks mailing list skunkworks@lists.my.co.ke ------------ List info, subscribe/unsubscribe http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks ------------
Skunkworks Rules http://my.co.ke/phpbb/viewtopic.php?f=24&t=94 ------------ Other services @ http://my.co.ke
-- Vincent Mosoti, Analytics/Business Intelligence Consultant. Skype: vmmosoti Phone: +254 722 972805 LinkedIn: ke.linkedin.com/in/vmosoti
_______________________________________________ skunkworks mailing list skunkworks@lists.my.co.ke ------------ List info, subscribe/unsubscribe http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks ------------
Skunkworks Rules http://my.co.ke/phpbb/viewtopic.php?f=24&t=94 ------------ Other services @ http://my.co.ke
-- Isaac Kiplagat. KIP®
participants (4)
-
Charles Juma -
Isaac Kiplagat -
rsohan＠gmail.com -
Vincent Mosoti