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What's missing, in my opinion, is share dilution - do initial investors get a say, since they too hope for growth to compensate for the lost proportional owners
by phnofive 5y ago
What's missing, in my opinion, is share dilution - do initial investors get a say, since they too hope for growth to compensate for the lost proportional ownership?
- Kranar 5y agoDepends on the corporation's bylaws, but generally the board of directors issues new shares. Investors get a say in so far as they agree to the bylaws and elect the board.
- phnofive 5y agoAppreciate the response! I was referring to the cartoon, though - it's clear why the president/board would want this (capital to expand), but less so why the existing shareholders would (presumably, in context, increased future value or dividends).