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Startup Law 101 - What it means to own x% of a company
- andrewljohnson 17y agoThis is a good concept to understand before you start chopping up the company :) George represents my company TrailBehind.com, and I'd recommend his firm to anyone looking to found a start-up. George's firm deals only with founders (and not VCs), which is not so common a thing in the valley. He gives good practical advice (like you can read in this article), and the firm bills very fairly and transparently.
- gizmo 17y agoGreat article. Precise and still void of legalese. Another way to reason about ownership of a company where two founders have 1 million shares each out of 10 million authorized shares goes like this: The company owns the remaining 8 million shares. So when a founder has N% of the issued shares, he indirectly owns N% of the shares owned by the company (remaining authorized shares), bringing his "effective" shares to 1 + 4 = 5 million. 5 out of 10 million shares, so he owns 50% of the company.