Accomodating a new investor
- Typically , stocks owned by the founders do not change hands to the new investor . Rather , new stocks are issued by the company to the new investor.
- INtroducing new stocks will dilute the ownership percent for the current owners , but wont change their stock amounts .
-
It’s generally advisable to start the company with a large amount of share say like 1 M shares. This is generally done , so that while creating new shares we wouldn’t have to round up the numbers . Rounding up or down a share quantity can end up costing a lot of money in the longer run when the valuation of the business is high . ^9676e2