How to sell shares in a limited company
Shares Explained - How much should I price my shares?
how much should i price my shares at so
I got a great question front of my
YouTube viewers love you guys hosting to
write in to say big video Evan I'm
learning so much from you thank you for
saying also please explain how shares
are created in terms of initial value
and the part left for future investors
how much is the initial price be is a
good to have lower high and do I need an
attorney from the beginning so all great
questions especially if you're looking
at bringing on investors in your
business when you're first starting your
company if it's a sole proprietorship
then there are no shares if you are as
forming a company then you have to
create shares in your business how many
shares and what the initial price is
doesn't really matter
it doesn't matter it's more about the
percentage so if you're the only owner
in the corporation you own a hundred
percent of the shares whether it's a
hundred shares a thousand shares 10,000
shares doesn't make a difference you own
a hundred percent then what makes a
difference is the percentage okay
the value also doesn't matter at the
start the difference in the value that
really makes an important impact is what
you sell it at right so if you're gonna
bring an investor on board at some point
with your business it doesn't matter
what you initially price the share I'd
this is not a publicly traded company
this is your own business nobody even
knows what the initial price was sold
for but it doesn't matter it's more
whatever deal you can come to between
yourself and the investor so if you sold
the share to yourself you know if it was
a dollar valuation at the start that's
fine it doesn't mean you can't tell that
same share for a hundred thousand
dollars later the pricing doesn't matter
okay should you involve a lawyer from
the beginning yeah
just like it's good to have an account
from the beginning I know it's expensive
and there are ways around it one example
could be to get a template online like
if money is really important to you
you're really tight you can buy an
online template for a shareholders
agreement and the share structure then
just have a lawyer local lawyer review
it so they're not drafting everything
but they're just reviewing a current one
and updating it for you it's important
to have a really good shareholders
agreement okay you want a lawyer to help
you out with at the beginning
because from investor point of view I've
looked at businesses and if they don't
have a solid share whose agreement I'm
out I'm not investing in that business
it's it's one you know reducing headache
a my end but also you know if the person
the entrepreneur has thought that far
ahead or not right like it's just a sign
of how detail aren t do you are and how
much you care about your business if you
don't even have a solid shareholders
agreement then there's probably a lot of
other things wrong with your business as
well as a warning sign so you want to
make sure you have your shows agreement
set up there's some of the things that
they look for it's a shotgun closet they
can mention on the video right I want a
shotgun clause so that if I have an exit
right I have an exit from the business I
have a piggyback clause so that if if
you sell the company they have to buy my
shares as well whoever is buying it over
at least I have that option or write a
first refusal so that if you sell your
shares to somebody I have the right to
buy it first at whatever price before
you sell it to somebody else so all
these things are part of a good shows
agreement that a lawyer can help you go
through I would definitely from the
start but again if you can't afford it
are you worried about the pricing of it
then get an online agreement but still
have your lawyer review it before you
create your agreement cuz this is this
is important and once you bring on
investors it's harder to change
everything around in the future so you
want to start this part solidly from the
beginning and yeah it doesn't matter
what your initial serve share price is
if you're the only person in the
business you can sell it later for
whatever you want because it's a private
company believe hopefully answer your
questions a little bit technical maybe
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