In a crowdfunding round, you determine the Price Per Unit by dividing your company’s Pre-Money Valuation by its Fully Diluted Unit Count.
For the Gonen Statutory Trust, here is how the math breaks down based on the Cap Table we built in the previous step.
1. The Variables
To calculate the price, we need to finalize three numbers:
- Pre-Money Valuation: The total value of the Trust before you accept any new money. (Let’s use $4,000,000 for this example).
- Current Units Outstanding: The total number of units held by you and early partners, including the option pool. (We used 1,000,000 units).
- Target Raise: The amount of capital you want from the “crowd” (e.g., $1,000,000).
2. The Calculation
We use the standard venture capital formula:
\text{Price Per Unit} = \frac{\text{Pre-Money Valuation}}{\text{Total Units Outstanding}}
Plugging in your numbers:
3. Investor Impact & Ownership
When a crowdfunding investor puts in money at this price, they are buying a percentage of the Post-Money Valuation (Pre-Money + Raise).
- Total Raise: $1,000,000
- New Units Issued: $1,000,000 / $4.00 = 250,000 Units
- Post-Money Valuation: $5,000,000
- Investor Ownership: $1,000,000 / $5,000,000 = 20%
4. Setting Your Minimum Investment
Now that you have a price of $4.00 per unit, you can set your “Entry Ticket.” Most Reg CF campaigns set a low barrier to encourage the “crowd” to participate:
- Minimum Investment: $252.00 (63 Units)
- Why $252? It’s a common psychological “buy-in” level that allows students or young professionals to support you without breaking the bank.
Strategic Note on Valuation
Since Gonen is a Statutory Trust holding life insurance and media assets, your valuation shouldn’t just be “made up.” You should base it on:
- The Cash Value of current insurance policies held.
- The Projected Revenue from Roku HLS streams over the next 3 years.
- The “Wyoming Premium”: The value of the asset protection and tax-free status you’ve already set up.
Next Step: The “Testing the Waters” Post
Before you spend money on lawyers for the Form C, you are allowed to “Test the Waters” to see if people are actually interested. This involves a simple social media post or email to your list.
Would you like me to draft a “Testing the Waters” announcement for your social media?