From: Ellen K. 

Getting them to "show you theirs" first is actually a pretty good idea.

Are these people you actually know from somewhere, or strict venture capitalists?

You could check out similar deals done with other companies at the same
stage of development as yours... for those that "made it", the
information would be dig-out-able from the initial going-public documents
they filed (because those would show the percentage of ownership of each
owner as of the filing).  That is going to be a somewhat skewed sample
since of course many more fail than succeed, but it would be better than
nothing.

If you could wave a magic wand that would find a really good, honest lawyer
who specializes in this type of thing, that would be best of all. Of course
then you need money to pay him or her... but you might be able to work it
so the lawyer agrees to take a piece of the company as compensation.

On Thu, 23 Mar 2006 19:41:29 +0200, "Antti Kurenniemi"
 wrote in message :

>Today I just got offered a considerable (well for me anyway) sum of money,
>to fund my software business. Wowzat, that's cool! I've been battling to
>finance my development (I'm doing a small-business crm/time
>planning/invoicing/whatnot type of application) by doing support gigs and
>all sorts of odd jobs, and this would really make all the difference in the
>world. I'm so excited that I can hardly stand (or sit) still.
>
>Anyone have any hints / ideas how to value a software (business) before it
>sells anything? I'm left with a decision: I have to offer a percentage of my
>company to the investor, and I haven't got a faintest clue as to how big a
>slice I should offer - too big and I'll regret it for the rest of my life,
>too small and they'll just shoot off leaving me empty handed... Damn, why
>aren't cool things ever easy . Well, no worries, I'm pretty sure I can
>trick them into telling me what they have in mind, and then I'll just divide
>that by two, and that should be about right.
>
>Wopee! Beers are on me the next time you're hereabout!
>
>
>Antti Kurenniemi
>

--- BBBS/NT v4.01 Flag-5