A new funding model between micro and macro

Incubators such as YC and Techstars are great for first time software-based entrepreneurs. Software entrepreneurs with programming backgrounds can work on their idea without cash, running on adrenaline alone to code their site, but they might eventually need introductions for future funding if that's an option.

Venture Capital is great at addressing the long-term funding needs of a small software start-up or the short-term funding needs of a high capital expenditure start-up such as those you would find in the hardware or high HR intensive fields.

In my opinion the sweet spot for a team of 2 software based entrepreneurs is $350K. A small software team could stretch $350K for 18, maybe 24 months. The per annum expenses can be around:

$25k - office space, Internet, Hydro, chairs, travel
$70-$90k - Founders Salaries
$50-$75k - Lawyer fees, accounting fees, outsourcing UI and design.

After 18 months a good software start-up should have a working product, users, and will hopefully be ramen profitable. Almost as importantly, any start-up prime for investment should have momentum going forward in a broad sense.

So how much should be given up, in terms of equity, for this new funding model?

10-30% would be my answer.