Use the calculator below to calculate your average monthly payment amount, APR, the equity you’ll be selling, and the total payback amount.
Definitions for each of the terms included in the calculator can be found at the bottom of this page.
|Investment: Amount invested.|
|Monthly Growth Rate: using your most important metric, (users, revenue, etc.), this is the rate at which your company growing month over month.|
|# of Founders: The number of founders your company has.|
|Investor Earnings Percentage: The percentage of “Founder Earnings” that the investor will be paid.|
|Valuation Cap: The maximum valuation used to calculate the investor ownership percentage when the SEAL converts to equity.|
|Founder Earnings Salary Threshold: The amount of money that needs to be paid out to founders before any earnings are shared with the investor.|
|Minimum Salary for Full-time: Salary required for the founder(s) to work full-time on the company.|
|Shared Earnings Cap (Multiple): The maximum multiplier that will be used to determine what the investor will be paid back. (e.g., a multiple of “2” means that the investor will be paid back, at most, 200% of the amount they invested.|
|Shared Earnings Cap ($): The maximum dollar amount that the investor will be paid back.|
|Monthly Revenue: The amount of revenue that the company generates per month.|
|Monthly Costs: The amount of costs that the company generates per month.|
|Monthly % growth in costs: The rate at which your company’s costs increase, on a monthly basis.|
|Pre-money valuation at Series A: This is the estimated valuation of the company the moment before closing a Series A fundraising round.|
Valuation Cap (Detailed explanation)
When calculating the percentage of equity that an investor will own as a result of an investment, valuation is the denominator. In the simplest version of this calculation, it’s “Dollars invested / value of company.” Such that if you invest $10k, and the company is worth $100k – the investor has purchased 10% of the company. Therefore, the valuation cap sets a maximum for the valuation of the company. Meaning that when running that same formula, there is a maximum, or cap, on how high it can be. Using the same example, let’s say the valuation cap is set to $200k, but your company is really worth $400k, when an investors’ note converts, their $10k investment will be worth $200k/$10k (which equals 5%), as compared to converting at $400k/$10k (which equals 2.5%). Essentially, it guarantees a certain percentage of ownership for the investor.