New Business questions

[Hawkeye2011]

Have looked around a bit online but a bit confused, wondering if a business guru could lend a hand....

I am starting a new business. Starting with 1 million shares. I get 500,000, and an investor gets 350,000. The rest are unassigned.

Down the road if I want to bring in another round of investing how do I add more s hares without cutting down on my 50% ownership in the company?

[SBR_John]

You don't. All new share issuance's dilute all shareholders. You can have different classes like A shares and B shares, convertibles and options structured in a way that will maintain your position. But then no investor in his right mind would be willing to invest.

Just remember a small piece of a big pie is worth more than a big piece of a very small pie or no pie at all. Don't get wrapped around axle on trying to keep a majority in later rounds of financing.

[ttwarrior1]

get ready for spam coming soon

[Shaudius]

Its a math problem, if you issue 500k more shares you figure out what amount of the shares you would have to issue to yourself to maintain your 50% control. In that case if you gave yourself 250k of the 500k new shares you'd have 750k of 1.5 million shares, easy enough, you could not, however, issue new shares or bring on another equity investor without diluting the share that someone had in the company.