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Business How to Build Your Company Financing Your Company Equity Financing

Posted by Kevin Lufkin
Kevin Lufkin
5,283 Points

Equity Financing, who owns the other half?

So Pasan mentions in the video that the founder owns 50% of the authorized stock, but who owns the other 50%? From the looks of what happened in the video Pasan issues out 1million stocks that was not a portion of his 5million, so technically there is no dilution as Pasan still owns 5million of the 10million. Can someone clear this up for me?

2 Answers

Matt Campbell
Matt Campbell
9,767 Points
Matt Campbell
Matt Campbell
9,767 Points

People who buy them. If there's 10 million shares issued and you're selling 5 million, then you're selling half your company.

Kevin Lufkin
Kevin Lufkin
5,283 Points
Kevin Lufkin
Kevin Lufkin
5,283 Points

Thanks Matthew! Let me try this one more time, I think this is what is tripping me up. So when 10 million shares are authorized Pasan owns that entire 10 million correct? And then afterwards Pasan sells 5 millions shares to whoever, leaving Pasan with a 50% equity?