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IIRC there's still a limit of 2,000 shareholders for private companies. So if those employee options transfer to outside buyers, they potentially hit the 2K li
by matchagaucho 4y ago
IIRC there's still a limit of 2,000 shareholders for private companies.
So if those employee options transfer to outside buyers, they potentially hit the 2K limit really fast.
btw - Nearly this same set of circumstances forced the FB IPO. Dozens of early employees were allowed to sell their shares pre-IPO, triggering the max private shareholder rule.
- WatchDog 4y agoDumb question, but does another company count as a single shareholder? Could you setup some kind of SPAC that only owns shares in the given company, to open up another 1,999 shareholders?
- caseysoftware 4y agoNot a dumb question at all. Many angel investors will create pool their money to create an LLC to hold their shares so there's only one investor. It also makes it easier when you need to get "all the investors" to sign off on something. You have ONE signature to get instead of the N angels involved.
- bcrosby95 4y agoIIRC there's no limit, it just triggers a lot of the same compliance regulations as being public.