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You cannot issue 100k new shares out of thin air... If the company is worth $1.5M, split in 30k shares then each share is worth $50. Issuing 100k new shares wou
by mamon 9y ago
You cannot issue 100k new shares out of thin air... If the company is worth $1.5M, split in 30k shares then each share is worth $50. Issuing 100k new shares would require those two founders to invest additional $5M (which I assume they don't have).
- valuearb 9y agoSure you can. You issue the remaining founders options for 100k shares at an excercize price if $50 per share. You can probably even do it at $10 or $20 per share, since investors shares are likely preferred, and don't have vesting requirements, meaning you can discount common shares for illiquidity/fewer rights.