We are ready to go, but ran out of money! (X$ % vs 100K%)? First, lay out the cash flows as a series of numbers. It’s chock full of tips that will make you say, ‘Now, why didn’t I think of that?’ Read this fun and friendly little book and simplify your work and life. Your investors give you money. In order to get an investor attention, you would need a good business plan with some clear and reasonable economics, including the expected ROI (Return On Investment) calculation, or better an IRR (Internal Rate of Return) based on the actualized cash flow of the project (IRR Max when NPV = 0). They want principal repaid at the same time as the last payment. Without financial projections it is difficult to answer however a general principle is that you might not need all the 100K$ right now, after all you are stating that you are ready to go and three years is a long time without generating revenues and a positive cash flow to finance your working capital requirements. You might be better in looking at a 100K small business loan depending what you want to use it for. This will tease investors into looking at your opportunity. A bank is the last place to go unless you have adequate assets to put up as security. After that how much % they want, is up to negotiation however remember that you are asking for financing of the opportunity against some work already done by you (idea, development, etc.) Profits will take a back seat to security for the investor in anything new (business, technology, innovations). It is his "perception" of risk VS return that will determine his appetite for investment. Are you sure you want to report this content? For example, if investors give you $1,000 at the start of January, and you give them $50 at the start of February, April, and June, and also return the $1,000 principal in June, the cash flows look like this: If you’ve typed the above into a spreadsheet, the formula to calculate the rate of return is: A bank loans you $10,000. Often you know how much you want investors to invest, and they are demanding a certain rate of return. Most probably he/she would want to get part of your earnings, shares of your company, distribution rights and/or patents. This percentage is usually compared to less risky (or no risk) investments return … If you agree that they get their money in a lump sum when the company goes public, then the 40% compounds. I am looking for investment on my product. Dana, While you don't say so, my assumption is that you don't have any customers yet and you need capital to go get them. Most spreadsheets have an IRR function you can use for this calculation. In order to get an investor attention, you would need a good business plan with some clear and reasonable economics, including the expected ROI (Return On Investment) calculation, or better an IRR (Internal Rate of Return) based on the actualized cash flow of the project (IRR Max when NPV = 0).


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