Snakes and Ladders of Capital Structures

Not all shares are equal, and there are very good reasons for this. This Snakes and Ladders e-book on capital structures seeks to simplify and unscramble the share structure puzzle and provide insights into the wonderful world of value exchange.

Think about this: when you are on the hunt for capital, you are essentially looking to buy capital using the shares of your company as currency.

It is somewhat like a license to print money using share certificates. But remember this: an exchange of shares for cash always has strings attached, creating different classes of shares with differing obligations.

Basically, shares can come in three different forms:

• Common shares
• Preferred shares
• Stock options

At a minimum, one share must have the following characteristics. It must have

• certain voting rights
• the right to receive dividends, and
• the right to remaining property on dissolution (sale or bankruptcy).

The following will present commonalities and differences, and define each class of shares so that you will be able to follow how they affect the share structure of your company over time.   This effect is often referred to as “slicing up the pie” – that is, the allocation of share ownership over the various rounds of financing.

This e-book walks you through the structure of shares within a company, the options for them, and the varieties of their use as a company grows.

After reading this e-book, you should be able to:

• Know the significance of share structure: common, preferred, and stock options, and how they can help or hinder the company’s growth
• Understand the basic arithmetic involved in calculating share structures
• Describe the key elements in dilution
• Understand the concept of triangulation and its significance

Buy and Download this e-book today!

The Snakes and Ladders of Capital Structures

This e-book walks you through the structure of shares within a company, the options for them, and the varieties of their use as a company grows. After reading the chapter, you should be able to: o Know the significance of share structure: common, preferred, and stock options, and how they can help or hinder the company’s growth o Understand the basic arithmetic involved in calculating share structures o Describe the key elements in dilution o Understand the concept of triangulation and its significance

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