How to issue shares to NEW INVESTORS?
Key Takeaways
The video explains how companies issue shares to new investors, specifically focusing on the process of creating new shares for investors, and how this affects the ownership structure of the company, particularly for C Corps in the US.
Full Transcript
how do you give shares to investors the company creates new shares for every new investor the company reserves some shares to give to them the founders sell part of their shares to investors or D the percentage ownership is redistributed every time if Walt and Jesse get together to build I don't know a math lab and they want to split it equally they'll each get let's say 10 shares wal's shares will never change hands or be sold to investors nor will jesses if they ever decide to bring an investor to their startup what'll happen is the will create new shares for them Walt will still have 10 shares Jesse will still have 10 shares and the new investors will get new shares in their names so the answer to this question is a for most companies around the world issuing new shares that's how things are going to work especially for C Corps in the US which is the standard business type answer D would be correct for llc's but llc's are not a great practical type of business entity for multiple rounds of funding because you have to redistribute shares all the time and it's it's a very complicated legal mess
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