Jul
16
Invested $10M to design patented switching technology. What equity % should I want from $100M VC investor?
Filed Under Small Business
Inventor asked:
I have secured multiple patents to a revolutionary technology that could bring substantive improvements to (router, mainframe) switching technology and have identified potential funding in the tens of millions of dollars to fund a startup venture to build the product (which would essentially compete with or eventually — meaning after 3-5 years of prototype development, commercialization work, etc. — be bought by Cisco). What percentage of the equity should I together with my small technical team hold out for with the venture financiers? FYI, we have invested about $10M to date and are talking about raising about $100M in phases to build the commercial offering. In all likelihood, we will remain as technical consultants, but will have little influence over the commercialization effort/strategy. Interested in hearing from other tech-saavy entrepreneurs and inventors that have relevant experience, especially in the area of cryogenics and potentially from commercialization partners.
DUI Lawyer
I have secured multiple patents to a revolutionary technology that could bring substantive improvements to (router, mainframe) switching technology and have identified potential funding in the tens of millions of dollars to fund a startup venture to build the product (which would essentially compete with or eventually — meaning after 3-5 years of prototype development, commercialization work, etc. — be bought by Cisco). What percentage of the equity should I together with my small technical team hold out for with the venture financiers? FYI, we have invested about $10M to date and are talking about raising about $100M in phases to build the commercial offering. In all likelihood, we will remain as technical consultants, but will have little influence over the commercialization effort/strategy. Interested in hearing from other tech-saavy entrepreneurs and inventors that have relevant experience, especially in the area of cryogenics and potentially from commercialization partners.
DUI Lawyer
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no more that 49% of your company equity so you can retain control