20% ownership for a $50K investment implies a post-money valuation of $250K, or a pre-money of $200K. That's a very low pre-money valuation. That's one reason that for a very early stage startup, a convertible note or a pre-money SAFE is generally a better way to go (better for the founders) since the note or SAFE will convert later when the company's valuation is higher.
@@Startupsos Why is post-money valuation of $250K low, it's just an unproven idea with no product. Nobody except FFF would invest, and they deserve high ownership because they took so much risk.
Great content. Its very well explained and comes along with a very good structure.
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For $50K I would expect at least 20% ownership (while the founder has 80%), sometimes even close to half. That is quite a huge dillution.
20% ownership for a $50K investment implies a post-money valuation of $250K, or a pre-money of $200K. That's a very low pre-money valuation. That's one reason that for a very early stage startup, a convertible note or a pre-money SAFE is generally a better way to go (better for the founders) since the note or SAFE will convert later when the company's valuation is higher.
@@Startupsos Why is post-money valuation of $250K low, it's just an unproven idea with no product. Nobody except FFF would invest, and they deserve high ownership because they took so much risk.
5/5