Question about Raising Money for Startup

Question about Raising Money for Startup

Posted in the Venture Capital Forum

Safvan Malik

Karachi, Pakistan

#1 Mar 5, 2012

I had a question about giving up equity to raise money for the new start up company but it is a bit basic in nature.

You own 100% of a company. When a new VC comes in and buys in 10% of the company, you basically GIVE UP 10% of the ownership. That is like selling shares and the money given to you should belong to you for your own personal use.

Why would an entrepreneur startup a company give up ownership and then use the same money to grow the business?

This is question I have been looking an answer for.
Best TR

Santa Barbara, CA

#2 Jun 30, 2012
A VC is not buying your personal shares, he is buying company shares. Therefore, the money belongs to the company.. who's purpose is to make the shareholders money.. ie. increase share value.

Tell me when this thread is updated:

Subscribe Now Add to my Tracker

Add your comments below

Characters left: 4000

Please note by submitting this form you acknowledge that you have read the Terms of Service and the comment you are posting is in compliance with such terms. Be polite. Inappropriate posts may be removed by the moderator. Send us your feedback.

Venture Capital Discussions

Title Updated Last By Comments
Poll Investor seeking investment project (Sep '10) Jun 10 business finance 22
Prestamo (Jan '12) Jun 8 Anatalia Roselyn 227
Loan offer May '17 Duke Thompson 1
Looking for companies and projects that need ve... (May '06) Apr '17 JamesPearce 453
loan update Apr '17 SAN ISIDRO COMPANY 1
Venture Capital Contact Distribution List Avail (Feb '16) Apr '17 richardx 6
Champion Free Lending Group . (Feb '16) Feb '17 Chris Joe 4
More from around the web