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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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agreements or bringing on investors

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