- 1). Tell your business partner or potential investor how much cash you have invested in the business. In order to properly communicate how invested you are in the business, you must inform your business partner or potential investor how much cash you have invested in the business. The more cash you have invested the more leverage you will have when negotiating the equity of the company.
- 2). Present some collateral to your business partner or potential investor. If the amount of cash you have is not too formidable, you can also present collateral to your business partner or potential investor. The collateral you present could include any assets you already own that you are willing to give to your partner or investor if the business fails, and they do not see a return on their money. Presenting collateral may make your partner or investor more comfortable investing their money and will allow you to negotiate for more equity.
- 3). Negotiate the equity with your business partner or potential investor. After the cash and collateral has been discussed, it is time to talk about how much equity you are going to want in the company and how much equity you are willing to give to your partner or investor. It is wise not to give up more than 49 percent of the company so you can remain in control of the business decisions.
SHARE
