This question is about how does an owner of company who own n% equity of company as a technical co founder makes real world cash. This is not about regular share holder who buys share to make money. This is about company founders.
This is regarding a company which will be registered as per Indian Laws and which is a private limited company. That means only 3 founder + investing organization. No other shareholders. It is not a public limited company. We are not going to public to raise funding. We will not be listing ourselves in share market or stock market.
When we get equity in a company that means we get n% ownership of that company. But how do I earn the actual real world 'cash' out of this equity?
Assuming that I own n% of the company,
I will get n% of total income of company per month paid at the end of each month? Do I have to manually write this in agreement? or this is default accepted? OR
I will get n% of total income of company per year paid at the end of each year? Do I have to manually write this in agreement? or this is default accepted? OR
I will get equity converted to cash only when I will sale the equity to someone in future? OR
I will get a mutually agreed salary for the life time of company? How to calculate the salary?
In case of salary who will decide my salary before getting funding, after funding and once we become profitable?