• Summary
  • Contents
  • Subject index

This book is designed to help entrepreneurs understand how to obtain funding from an investor for the creation or development of a new business venture. It discusses how to evaluate a business concept from an investor's perspective before moving onto an examination of the practical issues involved, such as writing a compelling business plan and making a convincing presentation.

Valuing the Business and Negotiating the Deal
Valuing the business and negotiating the deal

In this chapter, we consider the valuation of the business and, consequently, what the investor's money is worth in terms of equity in the business. We also address the issue of how to negotiate a better deal with the investor, given that the investor is almost certain to want a larger share of the business (for any given cash infusion) than the entrepreneur wants to give. The investor also may want a position of ultimate control, either initially via a majority shareholding or ultimately via clauses that allow control to revert to the investor if the management team does not achieve specific targets relating to sales, profits, or other objectives.

The entrepreneur must ...

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