Your investment contract is one of the most important parts of your raise. If you choose the wrong contract or set poor terms, no one will invest. It’s like trying to sell a dozen eggs for $100. People aren't stupid.

Having a Lead or notable investor commit early helps validate your terms and signals credibility, making it more likely you’ve chosen the right structure.

That said, we know in some parts of the country not many angel investors invest in early-stage companies. While the right terms are very specific to your company, here's some general advice:

- For an early-stage technology startup that has a reasonable chance of getting funded by venture capitalists, we recommend either a convertible note or a SAFE.  Valuation caps for early-stage technology startups with no prior investors can range from $2 million to $5 million.  It's possible for the very best early-stage startup (such as a Y Combinator startup) to raise at closer to a $12 million valuation cap.  However, if that's the case, then you will be in a position to have at least one prior professional investor who sets the terms.  

- For an early-stage brick-and-mortar with expected cash flow, we recommend a revenue share contract.  We recommend setting the contract terms to give at least a 2X return multiple. Then, make a spreadsheet of all your projected cash flows for the coming 6 years.  We recommend choosing the percentage of revenue to share to give investors a predicted 10%+ annual return.

Note that Wefunder's advice and/or approval of a Lead Investor or investment terms does not constitute an endorsement or a recommendation to invest.