Assume you started working on your own business 4 months back and just launched the product. Now you want to raise Rs.50 lakhs (5 million) from some investors. How much equity should you expect to dil

the answer is 15%, why not, 5% or 30%?

2 Answer(s)


As explained in the module, around 15% is what most investors typically take. 5% is too little for so much risk and 30% is too much for an amount of 50 lakhs.

Remember that these are rough numbers and there is no exact science behind this.


The math behind this is as follows.
If you raise 5 million for 15% then the valuation of your company is 33.3 million (5million/.15)