4 ms·
- Found a new company - Own 100% of the shares - Bring a few people on, shares get diluted to 20% - A few years on, the company is very successful and has a
by joegibbs 3y ago
- Found a new company
- Own 100% of the shares
- Bring a few people on, shares get diluted to 20%
- A few years on, the company is very successful and has a valuation of $2 billion, growing from $1.3b the year prior, despite being private and only having ~20 employees
So in that year the founder "made" $140 million, what happens there? Should the company be forced to go public? Otherwise, where does the other $139 million go, does the government "tax" the shares and end up with majority control of any company that grows too fast?
- pestatije 3y agothe tax comes only when the shares are liquidated...a valuation is a number in the sky, a number some people agree on but a number in the sky nonetheless