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Mathematical vs. Economic Dilution of Startup Equity: Thinner Slices of an Extra-Large Pizza

Gust

Entrepreneurs frequently think of equity primarily in terms of percentages such as 50/50 or 40/40/20 — not necessarily a bad idea at inception, or even throughout the lifecycle of a traditional business, such as real estate, where cash distributions, capital contributions, and allocations of profit or loss for tax purposes can be made accordingly.

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How will a buyer value your business?  

Berkonomics

Free Cash Flow Model: [Email readers, continue here…] This method is often used to value privately held companies with a range of five to eight times the cash available to spend after operating expenses are paid. Book Value Method: This is the basic net worth of the Company on the balance sheet.