Try These Numbers on for Size

I heard this through the grapevine.

If angel investors back high-tech companies like those at VT KnowledgeWorks, they want a 500% return on their investment.

For example, if they fund a company with $50K in year one, they expect $250K in year five.

An angel investor might fund a company up to $2 million.

Venture capitalists want a 1000% return on their investment.

If they fund a company with $1 million in year one, they expect $10 million in year five.

Venture capitalists might fund a company up to $10 million.  And they might invest several times.

Who has control, how much, who owns what, and what milestones must be met all become very, very big deals.

I’ve had a few lives.  I mentioned one as a poet.  In one of my lives, I wrote a money tips column for the St. Petersburg Tiimes, Florida (so long ago I couldn’t even find myself in the search results.  I have the clips if you want to see them).  I wrote about  laddering certificates of deposit.

How ’bout those returns on CDs?  4%?  Tops of 6%?

When a high-tech company and an investor have a meeting of the minds, it’s a very, very big deal.

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