Results 1 to 7 of 7
  1. #1
    Join Date
    Aug 2019
    Posts
    1

    Default How Many Shares Does 13% Equity Equal

    Hello everyone sorry for the noob question,

    I'm filing an S-Corp for my startup with a seed investor. Authorizing 10M shares with par value $0.00001 (4 zeros).

    If I'm giving my investor 13% equity in the company so how many shares does that equate to?

    Company valuation = $500k
    Seed investment = $65,000

    Thank you for your patience and help
    Brian

  2. #2
    Join Date
    Oct 2016
    Posts
    3,227

    Default Re: How Many Shares Does 13% Equity Equal

    This is a math, not a legal question.

    But.

    65,000 / 500,000 =0.13

    .13 x 10,000,000 = 1,300,000

    That is assuming that the 10mil shares have all been issued.

  3. #3
    Join Date
    Oct 2014
    Posts
    7,396

    Default Re: How Many Shares Does 13% Equity Equal

    Quote Quoting Bpark73
    View Post
    Hello everyone sorry for the noob question,

    I'm filing an S-Corp for my startup with a seed investor. Authorizing 10M shares with par value $0.00001 (4 zeros).
    The company will have $10 million authorized shares. (Is there really a need to have so many shares authorized for a very small corporation?) But authorized shares are different from the actual number of shares you issue. It is not uncommon for a company to authorize more shares than it actually issues. The unissued stock is kept by the corporation to issue to new investors later. If your investor is to have a 13% stake in the company now then he or she should be given 13% of the stock the corporation issues. So if you decide to issue 1 million shares then you issue to the investor 1 million x .13= 130,000 shares of stock.

    In what state are your forming the corporation? Not all states require a stated par value, and if it's not required it's probably best to simply leave out par value. For stock today par value doesn't have much real purpose except in states which base a tax on par value.

  4. #4

    Default Re: How Many Shares Does 13% Equity Equal

    Quote Quoting Bpark73
    View Post
    Hello everyone sorry for the noob question,

    I'm filing an S-Corp for my startup with a seed investor. my ip birthday wishes tneb Authorizing 10M shares with par value $0.00001 (4 zeros).

    If I'm giving my investor 13% equity in the company so how many shares does that equate to?

    Company valuation = $500k
    Seed investment = $65,000

    Thank you for your patience and help
    Brian
    That is assuming that the 10mil shares have all been issued.

  5. #5
    Join Date
    Oct 2016
    Posts
    3,227

    Default Re: How Many Shares Does 13% Equity Equal

    Quote Quoting nailiyatsi
    View Post
    That is assuming that the 10mil shares have all been issued.
    nailiyatsi has embedded some URLs in the message she quoted.

  6. #6
    Join Date
    Jul 2010
    Posts
    7,642

    Default Re: How Many Shares Does 13% Equity Equal

    Quote Quoting PayrolGuy
    View Post
    nailiyatsi has embedded some URLs in the message she quoted.
    That's new. Guess this spammer was playing the long game.

  7. #7
    Join Date
    Oct 2016
    Posts
    3,227

    Default Re: How Many Shares Does 13% Equity Equal

    Quote Quoting free9man
    View Post
    That's new. Guess this spammer was playing the long game.
    Weird links though.

    1. Sponsored Links
       

Similar Threads

  1. Other Injuries: Do All Heirs Get Equal Shares of a Wrongful Death Award
    By lawfacts in forum Accidents and Injuries
    Replies: 1
    Last Post: 03-04-2017, 11:26 AM
  2. Estate Planning Strategies: How to Prevent Heirs Who Receive Shares of Real Estate from Selling Their Shares
    By lawfacts in forum Estate Planning, Administration and Probate
    Replies: 1
    Last Post: 11-07-2016, 11:05 AM
  3. Compensation and Overtime: Equal Pay Between Employees
    By skittles1984 in forum Employment and Labor
    Replies: 3
    Last Post: 05-07-2013, 06:27 AM
  4. Equal Pay Violation
    By pitt6pitt in forum Employment and Labor
    Replies: 2
    Last Post: 01-30-2009, 01:07 PM
 
 
Sponsored Links

Legal Help, Information and Resources