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Please check my thinking.

  • Right now, founders own 100% of 1000 shares.
  • We're willing to sell 30% of the company to outside investors.
  • We want to set aside another 10% for an employee options pool.

I think this all means we need to issue 666 new shares, and put 500 up for sale, and put 166 in the options pool. Is this right?

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up vote 2 down vote accepted

If your investors have agreed 30% based on the post-money valuation, and a 10% post-money options pool, then your example is correct. Or, to be entirely accurate:

  • The investors would have 500/(1000+666) = 30.01%
  • The options pool 166/(1000+666) = 9.96%
  • All founders combined 1000/(1000+666) = 60.02%

(Percentage values rounded off to two decimals.)

However, this blindly assumes that you already have negotiated this result, or are in a position to actually negotiate this. There are other points that need to be settled, see for example the Venture Hacks article "The Option Pool Shuffle". I assume you meant the question as a hypothetical example, just to see a basic math example of issuing new shares.

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