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View Full Version : What is the ratio of profit sharing in venture capitalism


sastryforu
Aug 20, 2010, 11:16 AM
If a person has no capital and has idea for a new business,he approaches venture capitalists.What is the profit ratio sharing between the capitalist and the person if the total investment is by the capitalist.

bendingleconte
Aug 31, 2010, 07:34 PM
It will certainly depend on several factors:

-the level of risk is involved for them to front the money, so have a great business proposal ready.

-Who you approach. Some larger (more reputable) companies will typically have a 2-3% management fee and a 25-30% profit share.

Be careful and check references because there are plenty of scams out there as well.