[Landshark12000]

Okay, I still don't understand the investor table.
I'm starting a business for a total of $450,000.
I put in $300,000
My daughter puts in $60,000
We sell units or shares for the other $90,000 at $5,000 each or 18 total! That makes each unit worth roughly 1.5% of business?
If someone buys $90,000 then he would own 27% of the business?
Help Me Please,
What is a good way to put this in front of investors?

Landshark12000

[StealYourDreams]

It would be 20-25% of the company regardless of the specific unit size. It depends on whether you calculate your figures on a pre or post money basis. Most investors are pre unless they are not sophisticated (which is what you want).

90,000/360,000 = .25
90,000/450,000 = .20

I would suggest looking for one person that can do the whole 90k. It's going to a lot fewer headaches down the road than dealing with 18 investors.

Also, people that invest 5k cause much more grief before, during, and after the investment than someone that invests 25k+.

[Landshark12000]

Yes! But, do you know how hard it has been to get 90k..
That's why I thought a 5k I would get more investors and could get started!

[JLeezer]

I'm with StealYourDreams. If you can get 4 or less investors that will commit to the entire $90k you will end up with a lot less headaches in the end.

If you proceed with the guy that you know that is able to invest $5k, you'll probably find that he can barely afford to lose $5k and will want to be overly involved in what is going on with the business. However, someone who is willing to put up tens of thousands of dollars most likely has enough money that they won't be hurt much by losing some or all of it.

It might be harder to find a few weathier investors, but it will be worth it in the long run. If you do need to sell smaller shares, I'd suggest setting each share to be worth $1 (or 10 or 100 or 1000 dollars) and have an agreement that you get the first opportunity to repurchase their shares at any time, whether initiated by you, the company, or the shareholder. This way, if one particular investor turns out to be a bigger headache than the rest, you can begin buying their shares back immediately and get them out of the picture.

[warrensway]

I have to just keep agreeing with the people that have already posted. You want a lower number of investors, it will be a hassle if you have 15 or more.