Outstanding shares (also referred to as issued shares) refers to the number of shares that have been issued and are outstanding at a given time.
“Fully diluted” shares are the total common shares of a company counting all currently issued and outstanding, plus shares that could be issued through the conversion of convertible preferred stock or through the exercise of outstanding options and warrants.
One decision to make when incorporating is “How many shares do you want to authorize?” A common misconception is that the number of authorized shares (which appears in the certificate…
When talking to people about option grants, refer to “fully diluted” and always promise a share amount not just a percentage. I often get asked: “When I tell a new hire…
What is a Down Round? A “down round” is a financing in which a company sells shares of its capital stock at a price per share that is less than…
A Delaware public benefit corporation (PBC) is a for-profit corporation intended to produce a public benefit and operate in a responsible and sustainable manner. A PBC must be managed in a way that balances the interests of the stockholders, the company’s key stakeholders, and a specific public benefit that the company commits to in its charter.
Provisions in a company’s certificate of incorporation that increase the number of shares of common stock into which preferred stock when the company sells stock at a lower price.
So you’ve decided to incorporate as (or convert into) a Delaware Public Benefit Corporation (PBC). In your Certificate of Incorporation you have chosen a public benefit, or mission statement. Now…
All Delaware corporations have to pay an annual franchise tax to the state. If you’ve received a notice from the State of Delaware saying that your small startup owes tens…
Maybe you’ve been granting options and restricted stock from your equity incentive plan for a while now. Perhaps you and your team have developed a good process – you renew…
In a volatile market, companies may see their stock value drop significantly. This can result in employees and other service providers holding stock options that are “underwater” or “out of…
Very often founders raise the concern about protecting against dilution. Specifically, they are concerned that, as they grow their business and issue stock to investors, employees, and advisors, their shares,…
A capitalization table, or cap table, is a list of your company’s equity securities, including stock, options and warrants, that identifies how many shares are outstanding and who owns those securities
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