20% ownership for a $50K investment implies a post-money valuation of $250K, or a pre-money of $200K. That's a very low pre-money valuation. That's one reason that for a very early stage startup, a convertible note or a pre-money SAFE is generally a better way to go (better for the founders) since the note or SAFE will convert later when the company's valuation is higher.
@@Startupsos Why is post-money valuation of $250K low, it's just an unproven idea with no product. Nobody except FFF would invest, and they deserve high ownership because they took so much risk.
