When you’re raising money for your start-up, it helps to understand how the investors you’re pitching to will make money for themselves. The formula for paying investors is often not as simple as taking their return on investment and allocating it equally among the key players.
For angel funds, venture capital funds and other investment partnerships, there are often complex formulas for how the individuals involved in managing investments make money. You should keep the formulas in mind when developing your fundraising approach.