The Price is Right... or Wrong?

The price per share is important as there are tax implications of putting it too high or money being left on the table if you set it too low. Depending on how many and type of partners or shareholders you have, how much money you need to start up, if you're doing a fundraising round at some point and the fair market value of your company, all play a role in determining the "right price".

It's important to consult with a CPA on this matter, good thing we have a few on staff here at Blinc!

Keep in mind: once you set the price per share, each shareholder must pay that amount per share they own into the bank account of the company.

For example: if you set the price per share at $0.10 and give each shareholder 1,000 shares each, then each shareholder must write a cheque or transfer $100 to the company's account in order to own those shares.

How many shares do I issue?

Owning a million shares means nothing if the price is less than a penny, but you see it more often than not and it feels more of a psychological win than tangible value.

Typically for micro companies, pre-revenue, with 1-2 founders, having 1,000 shares is a reasonable amount of shares to issue because more than likely new shareholders will not come on board in the foreseeable future.

However, these can happen, but not limited to: you start fundraising, having more shareholders on board, or creating an equity pool, consider increasing that size of outstanding shares to be given out.

Thankfully we are fully staffed with professional CPAs that can help you decide on the most effective price per share and outstanding shares. Sign up today!