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All those same arguments basically apply against Angel investing in a startup. The only exception between the details of the agreement not being fleshed out, wh
by albertsun 17y ago
All those same arguments basically apply against Angel investing in a startup. The only exception between the details of the agreement not being fleshed out, which I assume they would flesh out with any potential investor. Taxable Income might be a good guideline for what and when income is paid out to the investor.
- patio11 17y agoMeet Bob. He's a swell guy. Would you invest in Bob's startup at a valuation of $10 million? I won't tell you what industry the startup is in, what its business plan is, or whether the startup actually exists or will exist in the future. But Bob's a hungry lad with a gleam in his eye, so that's alright then. Seriously, if you really wanted to give Bob $300k for an angel investment, wouldn't it make sense to wait until he actually had a startup to invest in?
- albertsun 17y agoSo these people are asking for a slightly high valuation. The basic concept isn't terrible though. http://usgovinfo.about.com/library/weekly/aa072602a.htm http://usgovinfo.about.com/library/weekly/aa072602a.htm gives some numbers for average lifetime earnings. People with professional degrees earn over a lifetime an average of $4.4 million. Sure you need to calculate a net present value of that, but it's possible to estimate someone's potential future earnings. Then you can pick a portfolio of people who you think will perform above average, in a variety of fields to hedge your risk, and provide advice and mentoring and....
- dasil003 17y agoNo. Business equity has well understood conventions and laws. An angel and entrepreneur willing to take faith in personal reputation with hazy details does not place such an arrangement anywhere at all near the prospect of lifetime equity agreements in people.