[skmurphy]

Don't get locked on the pre-money valuation: the other terms tend to have a much bigger impact on how much you actually make.

What's your plan for paying the investor back? Will you need a follow on round? How much, when, and why. What risks about your startup will you have reduced before you need to raise another round. Can you be acquired based on what you will achieve with this first round.

Have you talked to other teams this investor has worked with? You have to assign a value to the expertise, advice, and connections that this investor will bring. Most angel investors supply more than money. That's one of the reasons teams want to take money from Ycombinator, they have a well defined methodology and a constellation of other folks they can connect you with who can help you succeed.

You are negotiating the start of a relationship that will normally only end when your firm goes bankrupt or is sold: this is not a transaction this is a long term partnership.