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Founding: As a solo founder can I create "Founder Shares" to keep negotiations w/ potential co-founders just about equity (not control)? Potential downsides?
EJ
EJ
Edmund John, Emerging Markets Entrepreneur & Investor answered:

Short answer: Yes
Long answer: maybe

The legal ramifications of this are highly dependent on the jurisdiction, legal documents, etc.

However, you might consider making yourself a director, and not allowing him a board seat. Typically, Directors have more control over the business than minority shareholders. Again, this is not true for every situation.

If another person has 50%, or holds a majority share in the company, they can do things like call a quorum (which actually can be done with less shares).

Potential downside might be that you are complicating things rather early. Perhaps better to vest his shares over time, and handle this when you have serious cashflow, investment.

You could create a separate class of stock for them, but what is the point? In all likelyhood you will still control the business.

Control over a business involves more than just % of shareholding. Who controls the company includes things like bank signatory control, IP, even webdomains or hosting accounts.

Once you take on venture capital, all of this should be properly assigned to the company (if the VC's know what they are doing, this will all be covered by legally binding paperwork).

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