Trending Sources

Authorized Shares v. Issued Shares

VC Ready Blog

The terms “authorized shares” (or “authorized capital”) and “issued shares” are often confused, but the distinction is very important. Authorized shares refers to the number of shares of stock the corporation’s charter permits the corporation to issue. Issued shares refers to shares the corporation has actually sold or granted to someone. Why don’t corporations simply authorize billions of shares when incorporated?

0

Authorized Shares v. Issued Shares

VC Ready Blog

The terms “authorized shares” (or “authorized capital”) and “issued shares” are often confused, but the distinction is very important. Authorized shares refers to the number of shares of stock the corporation’s charter permits the corporation to issue. Issued shares refers to shares the corporation has actually sold or granted to someone. Why don’t corporations simply authorize billions of shares when incorporated?

0

eShares

A VC : Venture Capital and Technology

eShares fixes that by putting the entire cap table online and allowing your company to issue new shares and options directly from the platform. ” A month or two later, as we were doing a round of financing, when the lawyers were doing their diligence, it came out that our cap table spreadsheet was missing some shares that had been issued but not recorded. This causes issues in terms of exercise price changes and tax issues for the employee.

69

Mathematical vs. Economic Dilution of Startup Equity: Thinner Slices of an Extra-Large Pizza

Gust

By definition, an equity percentage is a fraction, the denominator of which is the total number of outstanding (or issuable) shares, so issuing more shares will almost* always ”dilute” existing shareholders in that sense.

96

Cash Flow 101: Building a Cash Flow Statement

Up and Running

And, before buying shares, investors will probably want to take a peek at them as well. Additionally, many businesses choose to add supplemental information about large transactions that don’t involve cash, like converting debt to equity or issuing shares in return for assets.

46

A Very Compelling Reason to Tell Employees How Much Their Peers Earn

Inc Startups

Many up-and-coming Generation Y employees have grown up in the public world of social media and have no issues sharing information with one another that used to be seen as private--such as pay," Belogolovsky and Bamberger wrote.

31

5 Startup Legal Shortcuts That Can Be Expensive

Startup Professionals Musings

Like other environments, most legal issues don’t result from fraud, but from ignorance on specific requirements, or simply never getting around to doing the things that common sense would tell you to do. Then you will only have pay tax on the increasing value of your shares when they are sold.

37

Five Legal Traps Every Entrepreneur Should Avoid

Startup Professionals Musings

Like other environments, most legal issues don’t result from fraud, but from ignorance on specific requirements, or simply never getting around to doing the things that common sense would tell you to do. Then you will only have pay tax on the increasing value of your shares when they are sold.

48

9 common startup ideas that haven’t broken through… yet

The Next Web

Group Photo Sharing. Group photo sharing startups have become so common that some of us at TNW created Gmail filters to weed them out of our inboxes.

51

Social Customer Service Metrics: 3 Case Studies

Duct Tape Marketing

Further, they use geo-locational data to zero in on marketing successes, product and service issues, and how people are feeling about unique campaigns around the world. Their social customer service representatives work on responding to customer issues as quickly as possible.

22

10 Avoidable Mistakes Cause Entrepreneurs Much Pain

Startup Professionals Musings

Later, when your venture is trying to close on financing, or even going public, that forgotten partner surfaces, demanding their original share. This problem can be avoided by incorporating immediately after early discussions, and issuing shares to all founders.

60

Registering A UK Limited Company As A Non-UK Resident

YoungUpstarts

Limited by shares or limited by guarantee company? Your first decision you will need to make is whether you want to set up your company as limited by shares or limited by guarantee. Profit distribution is based on the shares held by each shareholder.

18

Keep track of your stock!

VC Ready Blog

Startups often play fast and loose with equity; promising a small piece of the company to anybody who helps out, but never going through the legal process necessary to actually issue shares or the administrative exercise of maintaining proper stock ownership records. Failing to do either can lead to big problems if a dispute arises later about who really owns shares in the company. 500 shares of common stock”).

9

10 Startup Shortcuts That Will Be Back To Haunt You

Startup Professionals Musings

Later, when your venture is trying to close on financing, or even going public, that forgotten partner surfaces, demanding their original share. This problem can be avoided by incorporating immediately after early discussions, and issuing shares to all founders.

36

How to determine the right equity structure for your startup

VC Ready Blog

How many shares should be authorized? The number of shares “authorized” in the corporation’s charter is the maximum number the company can issue without amending its charter to authorize more. Authorizing too many shares is wasteful because state filing fees typically increase with the number of authorized shares. How many shares should be issued? Issued shares are those held by the company’s stockholders.

15

Convertible Note Seed Financings: Founders Beware!

Scott Edward Walker

This part will address certain tricky issues. What Happens If a Startup is Acquired Prior to the Note’s Conversion to Shares of Preferred Stock? For example, let’s assume that the noteholders invested $500,000 and were granted the right to convert into shares of common stock at a $4.5

32

The Complete Guide to Registering Your Business Name

Up and Running

You’ll still need to establish bylaws, hold a meeting with your board of directors, issue shares, and obtain any permits or further registration you need to do business. When I was a child, my family and the other families in our neighborhood held annual summer garage sales.

16

The alumni speak. Who do they think we are?

Business of Software Blog

We are also going to seed mealtime conversations around specific issues shared by many attendees in order that we maximise the value of break time conversation and draw on the incredible expertise of people in the room. We believe that when a speaker is well known enough that their agent shares you the menu of 9 speeches they do with a link to a show reel to each that you are better off watching the video online.

8

Venture Capital Term Sheets: Conversion Rights

Scott Edward Walker

Here are the issues I have addressed to date: common mistakes dealing with VC’s valuation liquidation preferences stock options exploding term sheets and no-shop provisions anti-dilution provisions dividends Board control protective provisions drag-along provisions pay-to-play and pull-up provisions In today’s post, I examine conversion rights of investors. As many of you know, VC investors are typically issued shares of preferred stock, not common stock.

8

Anatomy of a Term Sheet: Conversion and Anti-dilution

VC Ready Blog

b) automatically (i) at the time of the company’s initial public offering (usually subject to the public offering share price being at least X times the per share price paid by the investors) or (ii) if at least X% of the investors agree to convert all preferred stock held by all investors (both (i) and (ii) being “Mandatory Conversion”). Second, the other issue of some concern to the company is what percentage of investors can compel all investors to convert to common.

11

What Works in Silicon Valley Doesn’t Work Everywhere – And What You Can Do About It

Kevin Dewalt

Justin Wilcox , Takashi Tsutsumi (aka “The Steve Blank of Japan”), and I shared our experiences helping entrepreneurs worldwide apply Lean Startup principles. I’d like to share with you the key points I took from the discussion. Issue 3 - Relationships Trump Solutions.

6

2 Clauses That Can Torpedo Your Funding

Inc Startups

The key is to do this before any shares are issued. This requires any investor interested in selling shares to offer those shares to the company before approaching third parties on the open market.

5

In Praise of "Dumb Money"

Seed Stage Capital

Structure It As A Loan: Selling a percent of your company at an early stage is exceedingly difficult, not only because you must issue shares, but because it generally implies you are setting a valuation. Please share it! Please Share It!

11

Repurchase agreements: what you should know before you sign

High Contrast

The issue sets up like this: You and three friends (Mark, Luke and John) decide to form a company to found a new social network. There are a number of ways of dealing with these issues. You should not start issuing shares or options without legal advice. Just to make the point, if you issue yourself a bunch of shares, that could be taxable income. your shares to anybody under any circumstances.

7

More Details On Yandex IPO Revealed

ArcticStartup

shares (or 16% of total issued shares after IPO) at a price of between $20-$22 per share, Quintura reports. Yandex will issue 15.4M new shares to raise over $300M. This week details of Yandex's terms of IPO resurfaced everywhere.

1

Startup Blog: Forming the Company & Structure - part of starting a.

Taffy Williams

The more important issue to resolve is the type of structure you want the business to have; a Corporation, a Limited Liability Company, or some other structure. When you form a corporation or a LLC, you will have ownership that will be represented by issuances of shares.

3

Keep track of your stock!

VC Ready Blog

Startups often play fast and loose with equity; promising a small piece of the company to anybody who helps out, but never going through the legal process necessary to actually issue shares or the administrative exercise of maintaining proper stock ownership records. Failing to do either can lead to big problems if a dispute arises later about who really owns shares in the company. 500 shares of common stock”).

0

Dual-Class Shares - Not the Enemy

Recent Buzzes - VC Experts, Inc.

Reiter of Bennett Jones LLP Shareholder activists like to project democratic values onto corporate share structures. But multiple-voting shares can be useful - for common and controlling shareholders alike. Dual-class shares have been taking a beating as of late. More generally, activist shareholders seem concerned about disenfranchisement of holders of inferior classes of shares. Dual-class share structures are not without issues. By Barry J.

6

Anatomy of a Term Sheet: Conversion and Anti-dilution

VC Ready Blog

b) automatically (i) at the time of the company’s initial public offering (usually subject to the public offering share price being at least X times the per share price paid by the investors) or (ii) if at least X% of the investors agree to convert all preferred stock held by all investors (both (i) and (ii) being “Mandatory Conversion”). Second, the other issue of some concern to the company is what percentage of investors can compel all investors to convert to common.

3

Raising Capital? 3 Tips for Entrepreneurs – Part 2

Scott Edward Walker

Accordingly, I thought it would be helpful to share three basic tips for entrepreneurs in connection with raising capital. Spend a ton of time meeting people, talking with them about what they are working on, and sharing what you are working on.

1

Lockdown Lost-Founder IP

The Startup Lawyer

Each founder is issued shares in the startup in exchange for the founder’s intellectual property (and usually a small amount cash). In other words, the startup issues shares to the founder as consideration for the founder’s intellectual property and small check. If you won the lottery today, how many long lost relatives (that you don’t recall) would come out of the shadows of your family tree to test the generosity of their favorite relative?

0

Seed funding: Debt vs. Equity

StartupCFO

I am often asked about whether its better to sell shares or convertible debt when raising seed funding. Debt allows you to get the deal done cheaply and quickly (it is far simpler from a legal document perspective than issuing shares). In my experience, most sophisticated investors do like to price rounds and buy shares rather than do debt, so you should be open to that if it comes up.

0

Convertible Note Seed Financings: Econ 101 for Founders

Scott Edward Walker

ii) why are convertible notes issued instead of shares of common or preferred stock? and (iii) what are the advantages of issuing convertible notes? Again, if there were a 20% discount and no cap, the noteholders would only receive 625,000 shares or a 1.25x return.

4

Bill Janeway Warburg Pincus | Productive Bubbles | Video Slides Transcript | BoS Europe 2015

Business of Software Blog

Now there’s a long literature about stock market bubbles in attempts by economists to explain how it could be that the prices of financial assets would decouple themselves from the underlying cash flows of the business that the shares represent ownership in. Finance theory tells you that there is a fundamental value of every share. All you can do is sell his shares. Totally dominated by railroad bonds and then by railroad shares.

8

Legal Mistakes Every Startup Can Avoid

Startup Professionals Musings

Like other environments, most legal issues don’t result from fraud, but from ignorance on specific requirements, or simply never getting around to doing the things that common sense would tell you to do. Then you will only have pay tax on the increasing value of your shares when they are sold.

1

Business and the Culture of Money

Mark Birch

In banking, it is obvious whether it is loans, trading, or issues shares. Reading the opinions of the very public Goldman Sachs resignation runs the gamut of responses.

1

How to determine the right equity structure for your startup

VC Ready Blog

How many shares should be authorized? The number of shares “authorized” in the corporation’s charter is the maximum number the company can issue without amending its charter to authorize more. Authorizing too many shares is wasteful because state filing fees typically increase with the number of authorized shares. How many shares should be issued? Issued shares are those held by the company’s stockholders.

0

How to determine the right equity structure for your startup

VC Ready Blog

How many shares should be authorized? The number of shares “authorized” in the corporation’s charter is the maximum number the company can issue without amending its charter to authorize more. Authorizing too many shares is wasteful because state filing fees typically increase with the number of authorized shares. How many shares should be issued? Issued shares are those held by the company’s stockholders.

0

The downside of high valuations

StartupCFO

Dividends : Some pref shares have a cumulative dividend. These dividends usually convert into more shares at a fixed price. This can be dilutive depending on how long the shares are out there. This means that if you issue shares later at a lower price than the shares you issued today (“down round&# ) the previous shares get repriced at somewhere between those two issue prices.

0

Using warrants to pump up your VC valuation

www.mattbartus.com

Perspectives on issues affecting founders, startups and investors from a veteran startup lawyer in Silicon Valley. Shares. %. Shares. %. an option to purchase shares in the future at a pre-determined price) to the investor to purchase preferred stock at the Series A price.

1