Table of Contents
How much stake should I give to angel investors?
Angel investors in India typically take up 20-30\% of equity for investment worth INR 1-3 crores.
How do you calculate return on investment for a startup?
Return on investment (ROI) is a financial concept that measures the profitability of an investment. There are several methods to determine ROI, but the most common is to divide net profit by total assets. For instance, if your net profit is $50,000, and your total assets are $200,000, your ROI would be 25 percent.
What are seed investors looking for?
Seed investors, also referred to as Angel Investors are individuals who are looking to invest in very early startups. There are usually groups of these investors in your area. You can also look for incubators or accelerators, which are groups that might also provide some office space and access to other experts.
What do acquirers need to consider when considering a cash deal?
In this case, acquirers must consider the impact on their cost of capital, capital structure, credit ratios and credit ratings. While tax issues can get tricky, the big-picture difference between cash and stock deals is that when a seller receives cash, this is immediately taxable (i.e. the seller must pay at least one level of tax on the gain).
How do investors calculate how much cash a company really needs?
By taking into account the firm’s future cash flows, business cycles, capital expenditure plans, and emerging liability payments, investors can calculate how much cash a company really needs.
What is a stock deal and how does it work?
For the seller, a stock deal makes it possible to share in the future growth of the business and enables the seller to potentially defer the payment of tax on gain associated with the sale. Below we outline the potential motivations for paying with acquirer stock: In cash deals, the seller has cashed out.
Can the buyer offer the seller acquirer stock as a consideration?
In acquisitions, buyers usually pay the seller with cold, hard cash. However, the buyer can also offer the seller acquirer stock as a form of consideration. According to Thomson Reuters, 33.3\% of deals in the second half of 2016 used acquirer stock as a component of the consideration.