The negotiation of shareholding in companies has two well-differentiated stages:1) Distribution of shares among founding entrepreneurs (promoters) 2) Distribution of shares between promoters and investors. The distribution of shares among entrepreneurs (first stage) will depend on the dedication and value provided by each individual to the project at its launch. This depends on each case, so I will limit myself to giving some tips to avoid making irreversible mistakes: - The project should not be led by a single entrepreneur. Investors are fleeing from mono-entrepreneurs. If something happens to the entrepreneur, the project can be seriously compromised. - All key partners must work one hundred percent on the project. At Intelectium, we take this into account, since investors demand it.- If the project is led by two partners, one of them should hold the majority of the shares, even if it's only 51%. Otherwise, there is a risk of blocking the company in the face of an unsolvable conflict between partners.- The entrepreneur with the most technological leadership skills must be the one with the highest shareholding, since their capacities are more difficult to replace.- The distribution of shares between entrepreneurs and investors (second stage) will depend on the value of the company, which, in turn, will depend on the country in which the funding round is held and the milestones that the entrepreneurs have achieved before starting the search for funding. - A startup must demonstrate engagement, growth and evidence that there are customers willing to pay to have value for a professional investor. If there are still no promising metrics in these areas, entrepreneurs should seek capital from close people, family and friends. A company at this stage, in Spain, is unlikely to be valued above 1,000,000€ (2 million dollars in the case of the US). Entrepreneurs should not tighten the rope at this stage: if they make their family and friends feel overrated, it will be difficult to justify themselves to them when, in the second round, the valuation does not exceed the number the first ones entered. - Startups that can demonstrate good engagement and growth metrics in their project can achieve valuations ranging from 1 million to 3 million €. It matters a lot if the company is B2C or B2B: B2C companies are trading above B2B because of the ease and speed of acquiring customers and invoicing. In general, the highest valuations are achieved through negotiation to achieve milestones (combination of sales and the index). EBITDA.- Startups that, in addition to engagement and growth, can demonstrate that they have achieved clear and feasible business models, can achieve higher valuations than the previous ones.
