A friend and I got this business idea. We dont have money to start it up, and at our age I doubt well get over 50k in business loans (if that much).. I had been reading on corporations and the pros of incorporating. So, would it be possible to incorportate our business, then sell stocks in the company to raise money?? I know this would give the shareholders a partial ownership, but I dont want after the company gets big, for someone to try and push me off the board of directors, is there a way to secure a spot forever for me and my family, and could i sell myself shares of stock at a lower price than everyone else??
2007-03-28 06:26:13 · 3 answers · asked by Bored Much 2 in Business & Finance ➔ Corporations
Technically, if you own the business you already own 100% of the stock in that company. As long as you have 51% of the total shares you have the highest vote and therefor control the company.
More importantly you want to make sure that you can sell your idea to people that would be willing to invest in it. Make a business plan and do some research on starting a business at your local library.
Good luck.
2007-03-28 06:38:09 · answer #1 · answered by Garrett 1 · 0⤊ 0⤋
If you are going to expect someone else to put up the money for your business, who would you expect to provide the money and not have the majority ownership stake?
Sometimes this type of investor does come around. The venture capitalists call this investor the “angel”. Basically this investor is a person that loves you so much that they are willing to back your business. And often Angels take less than a 50% share of the business, because #1 they want you to succeed and #2 they understand that your business will likely go through multiple rounds of financing if it is successful.
You do start out with 100% of the ownership share. As far as selling stock at a high price and then selling at a later date at a lower price. You might want to watch that. Remember all your stockholders are technically business partners. This type of a situation does not seem like a very fair way to treat your partners.
The situation could work out if some material event dramatically reduced the value of the business, or if all the current share holders all agree that an additional round of financing at the lower price is the best alternative.
2007-03-28 14:14:41 · answer #2 · answered by James H 5 · 0⤊ 0⤋
You should look into an investor or try to find a government grant for your start up.
2007-03-29 15:13:29 · answer #3 · answered by Dawn C 3 · 0⤊ 0⤋