3 ms·
do a 100 to 1 reverse stock split in exchange for modest additional funding, reducing the entire equity holdings of the founders to less than 1% of the company
by seiji 16y ago
do a 100 to 1 reverse stock split in exchange for modest additional funding, reducing the entire equity holdings of the founders to less than 1% of the company in one fell swoop.
Isn't that how facebook re-jiggered things to make up for early equity granting "mistakes?"
- InclinedPlane 16y agoNot exactly. Keep in mind that the movie "The Social Network" is not a 100% accurate telling of history. In the movie Eduardo (a co-founder of Facebook and initial source of funding) has his shares diluted from 30% down to a fraction of a percent. In reality Eduardo's shares were diluted (by issuance of new stock) from about 1/4 of the company to less than 10%. And it was probably a necessary move as well, seeing as Eduardo was no longer very connected with the company (it took him some time to even discover that his share of the company had been diluted, despite having been the CFO of the company on paper. In the end he ended up realizing something like a 6 million percent return on his initial investments (according to the value of his share of Facebook at the moment).