A fund wants 40% of my company: is that too much?

40% is neither too much nor too little in itself. The percentage comes from two figures: the amount invested and the valuation the fund uses. Work out that valuation, compare it with your own estimate, then read the rights attached to the fund's shares. Together, those make a good or a bad offer.

40% of the equity: is that too much?

It depends on the price. The fund's stake equals the amount it invests divided by the valuation after the round (post-money). From that you derive the valuation before the round (pre-money), which is the real subject of the negotiation.

An example built for illustration: the fund invests €2M for 40%.

1. Post-money valuation: €2M ÷ 40% = €5M.
2. Pre-money valuation: €5M − €2M = €3M.
3. The question to ask yourself: is my company worth €3M today?

If your estimate, based on recognised methods, comes to €4.5M, the post-money becomes €6.5M and the same €2M buys only 30.8% of the equity. The 9.2-point gap is the price of a poorly defended valuation. If your estimate comes to €3M, the 40% is consistent with the amount requested. The methods are covered in valuing an unlisted SME.

When someone shows me a 40% offer, I always redo this calculation first. Almost no owner has done it before the meeting.

What does the owner keep at 60%?

A simple majority, not full control. At 60%, you appoint the directors and approve the accounts. You can no longer amend the articles alone.

The Companies and Associations Code (CSA, the federal code governing Belgian companies) is available on ejustice. Because it is federal, these thresholds apply in Wallonia, Brussels and Flanders.

Two 40% offers can therefore be very different. One gives the fund a board seat and a short list of reserved matters. The other adds preference shares, a full ratchet and a drag along that can be triggered at any time. The second leaves you 60% of the shares and much less than 60% of the power. The clauses involved are described in anti-dilution and ratchet.

Is my 60% worth less than before?

In theoretical value, no. 60% of €5M is worth €3M, the same as 100% of €3M before the round. The money invested goes into the company.

Dilution becomes a real cost in two cases: when the valuation is too low, and when rounds follow one another without value being created in between.

What alternatives let you give up less?

Four structures, worked out on the same €2M need and the same €3M pre-money valuation:

In percentages: the mixed structure gives you back 15 points for the same total amount. In return, the subordinated loan must be repaid and carries interest, even though it creates no shares. The details are in the guide to the subordinated loan.

The levers, in the order I test them:

• negotiate the valuation with comparables and a well-argued normalised EBITDA;
• replace part of the equity with quasi-equity;
• raise less, in several tranches tied to milestones;
• put several funds in competition before signing an exclusivity.

What should you check in the offer before replying?

The percentage fits on one line of the letter of intent. The rest takes four pages, and that is where I spend most of my time. Five checkpoints:

• is the pre-money valuation written out in full, or only the percentage?
• are the fund's shares ordinary or preference shares?
• is the list of reserved matters closed?
• is there an anti-dilution clause, and in what form?
• does the drag along have a threshold, a floor price and a delay?

An offer that only gives the percentage forces you to redo the calculation yourself. Do it.

Which players publish these instruments?

Checked on the players' websites on 15.10.2026. ORSA publishes a ticket of €500,000 to €2,500,000 and a Smart Bond, a 5 to 10-year subordinated loan with no dilution. Namur Invest (the Namur provincial invest) publishes a ticket of €100,000 to €2.5M in general and a portfolio split roughly 20% equity, 80% debt. Invest.BW (the Walloon Brabant provincial invest) offers equity, subordinated or mezzanine loans and convertibles, up to €2.5M in total, never funding the whole need alone. In Brussels, finance&invest.brussels (the Brussels-Capital Region's public finance body) invests up to €5M in SMEs, alongside other investors.

None of these players publishes a target equity stake. It is not published and is negotiated. In Flanders, the public tool is PMV; its terms are not part of my survey. To compare all nine players, see the ranking of SME funds.

Which answer fits your profile?

• Profitable SME, need tied to an identified investment: 40% is often more than necessary. Test a mixed equity and subordinated loan structure.
• Start-up raising a large amount early: 40% can be justified, if the fund's rights stay standard and the valuation is in line with comparable rounds.
• Owner preparing an exit in the medium term: selling a large stake can be a step towards handing over. Then look at the fund's horizon, evergreen or closed-end.

The stake and the rights are set in the letter of intent. Have a lawyer review it before you sign, and your accountant review the valuation.