How much equity to grant investor in an internet startup?

For early stage internet start-up, how much % equity is granted for seed money? And what kind of distribution is typical?

Internet start-ups are somewhat risky ventures. I don't think there is any hard and fast rule that can be used. A lot depends on how good a negotiater you are. As the previous answer mentioned, you do not want to grant more than 49% under any circumstances. A common strategy is to grant some equity and some debt obligation. The debt of course would carry an intest payment whereas the equity is part ownership. Of course a start-up might be several years in obtaining a sufficient cash flow, so debt might be not a good choice.

The % granted should be dependent on the amount of money put up for the startup relative to the potential return. If a great deal of money is required, then a great deal of equity will also be required. If the amount of seed capital is a lesser amount then the amount of equity granted should be a lesser amount.

You should incorporate, and sell the investors stock in the company.

The price of the stock, should be based upon the value of the company.

For example, if your company has $1,000,000 in assets, and you have 1,000,000 shares of stock, then sell it for $1 per share.

If you do not want your investor to have control of the company, only sell them less than 50% of the stock, while you keep at least 51% of the stock.

the answers to your questions are completely arbitrary

firstly - you should calculate a current value of the business

using the amount you are happy with investing then 'negotiate' with the owner for your share of this business value.. ie if you think the business is worth 100 and you want to invest 50, then take 50%

remember - you are investing in the one of the highest risk type of investments, so only invest an amount you are completely comfortable with (ie you don't mind losing all of this investment, or not seeing it again for at least 10 years!)

no such thing as typical distribution, although i've heard more stories of zero distribution vs other.. but for this kind of risk, you would expect an annual return of at least 65% plus

If they invest $90,000.00 and you invest $10,000.00 then they will get 90% and you will get 10%