Cynthia, bringing in investors may raise both federal and state law issues.
Please consult with an experienced business lawyer who is familiar with
investment laws.

Cynthia:

The answer is that it depends. It depends on how good your idea is. It
depends on the investor’s assessment of your ability to implement the idea.
It depends on the size of the investment. It depends on the value of the
business before and after the investment is made. It depends on the
investor’s analysis of the potential for growth and his expectations of how
much he can get out for in the future. etc. etc.

Any investor in the early stages would most likely not be looking just to
share on profits or to obtain lender returns. The investor will be looking
for equity in return. There are a lot of ways to evaluate an investment, but
some of the most common ones are the discounted cash flow and sales/earning
multipliers. There is not enough time to go over them in a post like this,
but if you do some Google searches you should be able to find examples.

If I were to invest in a relatively new business, I would assess the
opportunity and demand a substantial return due to the risk associated with
new ventures.

There are different types of investors. If the investor lends you money
(which is what angel and venture capital is - loans that need to be repaid),
then you structure a repayment plan based on income over a period of time. If
the investor is something like a limited partner, then you have another issue
and you will need an attorney to create a limited partnership agreement. A
counselor at small business development center or SCORE office can help you
determine what type of investor is best for your particular business.

Try getting in touch with a local Small Business Development Center or SCORE, two of SBA's resource partners. They're located across the country and provide free business counseling and answers. Visit our local assistance guide to find your local SBA resource partners by entering your zip code. One approach that may be useful is talking to a mentor who could offer you specific guidance. Good luck!