shares - What are the most common partner equity distribution for startups?

BackgroundI'm doing some due diligence regarding a US registered (Delaware C-corp) tech startup in Europe, where the founders are located and living in the EU. Although the business idea is very good, there are already operating competitors, while this company is still in the development stage. As I provide VC access and some decision say, I am a bit concerned about the "team" as the founder and major shareholder has a great fear of share dilution and thus not willing to give his 3-5 team/partners more than 2% after 5 years with a SAFE agreemen...Read more

shares - Receiving restricted stock units as a dual citizen

I'm in the process of signing paperwork to receive restricted stock units at my current company. While looking over the papers, I noticed that they mention that I'm 'a citizen of Canada.' I actually have dual citizenship with the United States, and work in the United States as well.I've held off on signing them until I can figure out what the repercussions of the paperwork identifying me as a Canadian citizen are. I am going to talk with the company's attorney to clarify this, but in the mean time, any additional information on this topic would...Read more

employee stock options - How do shares work when a startup is acquired?

I'm trying to estimate the value of stock options for a startup company which might get acquired in the near future. The problem is that I don't know how to incorporate the shares into the formula.Let's say that the company is acquired for $100M. If the company has 10M authorized shares and 5M outstanding shares what will be the value of an individual share? Do they have to buy 5M or 10M shares?...Read more

capital loss - How should I calculate my shares?

Here's context for my question : note that this is a hypotheticalI live in Belgium, Europe (if that is any relevant).I own 50% of the company I work in (as a manager).I've been working here 3 years.I have now decided to leave, and sell my shares to the other shareholder, who will then be holding 100% of the company.I'm now making up numbers for simplicity.Year 1, the company made 40.000€, while expenses were of 60.000€. Ended up 20.000€ in loss that year.Year 2, the company made 70.000€, with about 60.000€ in expenses. Ended up 10.000€ in profi...Read more

shares - How to record “short premium” in double-entry accounting?

I write (sell to open) puts on margin for “short premium” on my personal account.The contract note for an opening transaction lists a number of components:• contract number• option symbol• strike price• option type• number of contracts• price ($) per share• trade date• expiry date• clearing house fee• brokerage (commission)• gross premium value ($)• GST• nett premium value ($)• initial marginThe initial margin is NOT deducted from the premium received.  It is swept from my cash account.Most months I’ll average about 60 open positions that I’ll ...Read more

brokerage - How does ownership in fractional shares work?

I've been trying to find out some more information about fractional shares, and how they work. I understand conceptually, you own x% of a share rather than x "full" shares, but I'm curious about how such a system is implemented.As I understand it, in a "traditional" purchase of shares, the role of a broker is to act as an executor on your behalf, and does not hold any assets themselves. In the case of a fractional share, is this then not the case? For example, the broker holds the complete shares, and then just ensures that they keep an interna...Read more

Mismatch between market cap and shares outstanding*price

Why is there a big mismatch between reported market cap and the value obtained by shares_outstanding*price? market cap = 16.58 Bshares outstanding = 99.44 B50-day moving avg price = 94.30calculated market cap = 9373 B (This is not possible!)This is obviously not correct. The currency is in USD, so there should be no confusion regarding cents like sometimes it's in GBp instead of GBP.Any thoughts on this discrepancy or the data is just wrong? I'm getting my data from compustat and ...Read more

start up - If one owns 75% of company shares, does that mean that he would have to take upon himself 75% of the company's expenses?

There are two founders in a new company that does not have any profit yet and is financed out of their own pockets. One founder owns of 75% shares, and the other one - 25%. There is a need to spend a large sum of money on a risky deal that may help the company grow and start bringing profit.Is it as simple as that the first founder pays 75% of the sum and the other one - 25? Or there are some factors involved that may influence the distribution of burden?...Read more

shares - Greedy shareholder that does not want to dilute his portion

What needs to be done or could be done if a company wants to raise capital and one of the shareholders doesn't want to dilute his shares and brands all the others as "too greedy". The shareholders agreement contains an article of no dilution and demands full consensus to change that. Because the shareholder is richer than the others he is using that article to force the rest of the shareholders to dilute and thereby gain a big portion of the new company valuation. UpdateThe company received an offer of $5M for 25%. That particular shareholder...Read more

shares - As a technical co-founder, how much equity should I be asking for? Is 20% unreasonable with a 144k salary?

I am joining a few months before VC pitches. I’m coming on board as CTO and will receive 3% equity vested over 4 years as well as 144k annual salary once the funding goes through. The requirement is that I work on the app for 5 hours a week. The app is partially completed but still needs much work which I will be instrumental in completing. The founder is working on it full-time while I have another full-time job and can only work on it part time until funding comes in.I am now being offered 8% equity to be a co-founder, which will require me t...Read more