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What to ask for to determine percent of startup I have shares in?

Personal Finance & Money Asked by user5854648 on December 31, 2020

I work at a pre-launch tech startup and we agreed that I’d receive 2% equity. When I signed paperwork for the shares, there was nothing indicating what % I signed at, just the number of shares.

I realized later that I could have signed for any % and I wouldn’t know any better.

What do I need to ask to understand what % I actually own? I’m looking for the proper vocabulary so I can seem less clueless (which I certainly am) when I try and confirm the shares I have are indeed what we agreed on. I don’t know if this matters for the context of this question but in case someone were to ask: I have 195,000 shares at $0.17 a share.

2 Answers

You need to ask how many shares have been issued and/or authorised in total. Then divide your 195,000 by that number to get your % ownership. Note that more shares may be issued in future, which will reduce your percentage.

Answered by Mike Scott on December 31, 2020

Talk to the CFO (or someone in the Finance or Investor Relations Department if you can't go that high up) and ask how many shares are "outstanding" or "issued". Then divide your number of shares by that number to get an ownership percentage.

As a side note, the implicit value of the entire company from your share price is about (195,000 * $0.17 / 0.02) ~= $1.66MM

Answered by D Stanley on December 31, 2020

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