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When Trading Equity for Cash, Balance Is Everything Sell too little, and you lack the resources to grow. Sell too much, and you lose control.

By Amanda Steinberg

Opinions expressed by Entrepreneur contributors are their own.

Illustration © David Schwen

When it comes to figuring out how much of your company to give away in exchange for investment dollars, there's one maxim that holds true no matter what: It's better to own 1 percent of a large company than 100 percent of nothing.

That should stick in your brain when you're calculating what percentage between 2 and 99 to part with. Hold on to too much, and you risk not raising enough cash to fund the scale of growth you need. Sell too much, and you could become an employee of your own company within weeks, with no say in its future.

The right percentage is different for everyone, but the place to start--even before you crunch the numbers to determine how much you need--is to decide how much of the company you wish to control, according to Matthew Bellows, co-founder of Boston-based Yesware, who has raised nearly $20 million in venture funding. "Even if you just sell a minority stake to a venture capital firm, you'll have to give up some real control of the company," he says.

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