We are a software company and have a partnership with another software company that gives us components to implement within our software and now they want to buy the intellectual property from us, their company worth nearly 10 million, I know they from time to time they get some funding in the USA.

They offered us upfront cash + a small % of equity options in their company, the options worth is 500k USD, my question is, does this equity option in the company give us any shares from the annual revenue?

1 Answer 1


It might, but it also might not. The Board of Directors gets to decide whether and how much dividends are paid to stockholders. So this will vary from company to company and may change over time. I suggest you ask the person making the offer.

That said: It looks like they offered you OPTIONS, not Shares. An option is just the right to buy stock at a given price in the future. It is extremely unlikely that you would be entitled to any dividends since you don't have an ownership stake, just a potential to be a shareholder.

  • 3
    I'd be surprised if having an option got you dividends; i'd expect you'd have to exercise the option and turn it into shares first. Though I suppose the board can vote to give money to whomever they choose, within reason...
    – keshlam
    May 19, 2015 at 3:16
  • That's a good point. I was reading that as "Shares" not options. Editing my answer to note that.
    – JohnFx
    May 19, 2015 at 22:55

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