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One thing I don't see addressed is what this means regarding dilution and such. With something like this, is the company more likely to dilute its stock to try
by JonFish85 12y ago
One thing I don't see addressed is what this means regarding dilution and such. With something like this, is the company more likely to dilute its stock to try to dilute out people who have long since left the company?
If Joe Schmoe leaves the company with, say, .05% of the company, and in 7 years those shares would be worth $25m or something, wouldn't the company want to dilute that person out in order to give their current employees value?
I guess I don't really see what the big deal is on this. It would seem to me that the company would aggressively issue more stock to ensure that anyone who left the company 7 years ago couldn't possibly control more stock than current employees.
- dlubarov 12y agoAs long as the board doesn't do anything really shady, dilution generally affects all shareholders equally. (Well, the effect can be slightly different for preferred stock holders, but at least former employees will generally be in the same boat as founders and current employees.)
- deleted 12y ago[deleted]