Consider this scenario:
While incorporating BigCo, Jack specifies that the number of founding shares is one million. Jack releases a product and sells it under BigCo. The product doesn't bring enough income. Still, Jack wants to hire two people to improve the product. He does not have the resources to hire them, and so he seeks financing. A representative from Venturo expresses interest. The rep and Jack sit down and agree on a valuation of $1m for BigCo. They further agree on transferring ownership of 25% of BigCo. There is now a question: is the check written as a personal check to Jack or as a check to BigCo.
If the check is written as a personal check to Jack for $250,000, then Jack has just sold 250,000 shares. He needs to pay capital gains taxes on the $250,000. Let's say the sum is $50,000. Jack then proceeds to deposit the remainder ($200,000) in BigCo's account and pursues his effort to hire two people. The amount transferred to BigCo is a shareholder loan. At some point in the future when BigCo's position permits, Jack can reimburse himself sums that add up to that amount without having to pay additional taxes on them.
If the check is written as a check to BigCo, it is less clear how Jack can compensate himself for the equity sale. It is as if the equity was owned by the corporation, not by Jack.
What am I misunderstanding?