How much stake (equity) is an idea worth?
It depends on the quality of the idea. I’m a firm believer in Derek Sivers‘ calculus, which goes like this:
AWFUL IDEA = -$1
WEAK IDEA = $1
SO-SO IDEA = $5
GOOD IDEA = $10
GREAT IDEA = $15
BRILLIANT IDEA = $20
The real value, of course (as other answers here have noted), comes from executing on the idea. And to see how that calculation works, check out Derek’s classic, seminal article on the subject:
*original post can be found on Quora @ : http://www.quora.com/David-S-Rose/answers *
Written by David S. Rose
You might also be interested in
Entrepreneurs seem genuinely surprised to find that investors in Peoria or Little Rock are not willing to invest in startup companies at Silicon Valley prices. After all, they just read in TechCrunch that investors funded a company similar to theirs at an $8 million pre-money valuation!
The valuation of startup companies shouldn’t be impacted by location, should they? Guess again! A
The first question you need to ask is “What country are you in?” and the second is “Are you an Accredited Investor by that country’s standards?”
If we’re talking about the US and you are NOT at the Accredited level ($1 million in investable assets, or $200,000 annual income), then for the moment you are actually not allowed to invest in privately held startups (emerging publiccompanies,
First, it’s important to understand that the four platforms you list fall into two very distinct groups.
Kickstarter and IndieGoGo are project-based crowdfunding platforms through which anyone can contribute money, either as a donation or with the promise that they will receive a tangible ‘reward’ of some kind if the project is successful.
Gust and AngelList are equity-based platforms, used by Accredited Investors to facilitate the investment of money for an ownership interest in a company.
Here, in a completely unsourced, purely anecdotal and totally subjective answer with numbers pulled out of the air, is my guess:
*original post can be found on Quora @ http://www.quora.com/David-S-Rose/answers *
Part of the challenge is the enormous amount of ignorance surrounding this suddenly hot topic. There are thousands of companies that “the crowd” can fund without restriction, including Apple, Google and Facebook. These are “publicly tradable companies”, and what makes them so are the extensive rules surrounding disclosure, transparency, trading and other aspects of their corporate existence.
But since there are