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28

It seems like I hold only $1 because 100,000*$0.00001 = $1. No - you have the right to buy stock at $0.00001 per share. Presumably, the stock will be worth more than that, so your "profit" will be the value of the stock that you essentially get "for free". What is meant by the vesting and cliff periods? Every month you are "vested" (entitled to) an ...


22

Broadly-speaking, equity just refers to (the value of) what you own, after deducting what you owe. The accounting equation is: Assets - Liabilities = Equity. - investopedia So if you have $100k in cash (and no loans) and you borrow $200k to buy a $300k property, your equity before and after the purchase is the same. You started with $100k equity and ...


16

Yes the company can still pay dividends even if they aren't making a profit. 1) If the firm has been around, it might have made profits in the past years, which it might be still carrying (check for retained earnings in the financial statements). 2) Some firms in the past have had taken up debt to return the money to shareholders as dividends. 3) It might ...


12

You have already indicted in another question, titled Which risk did I take winning this much?, that you did not understand (1) Why a previous trade made you as much money as it did; nor (2) How much you could have lost if things went a different way. You were, in that other question, talking about taking short position, without understanding (apparently) ...


12

Do I understand the benefits of home equity correctly? Sort of - equity is essentially the value of the home minus what you owe on it. So if you make a mortgage payment that pays off the principal by $100, then you increase your equity by $100. When you sell your home, the amount that you sell the home for less the amount that you owe is your remaining ...


10

Is it an unattractive offer many buyers would shy away from? Buyer who have specific plan may skip getting into such deals as this would be an hindrance to resell the business. Others who are not sure, may buy it for to make money in future. Does it seem like a justifiably fair way to sell a domain, while keeping a stake in it? This is preview of ...


9

Accounts track value: at any given time, a given account will have a given value. The type of account indicates what the value represents. Roughly: An asset is something you control that's worth something, and the value is how much it's worth. A liability is something you owe someone else, and the value is how much you owe them. Equity is your net worth: ...


9

The short answer is you're going to need to contact an attorney. Your country/state laws may have unique conditions, interpretations, and precedents. Ideally, you created a partnership agreement when you bought the property that specifies what happens in this situation. If there is no such agreement in place, you're likely going to have to go to court to ...


9

You are responsible for 0 of the debt. If the partners try to force a liquidation, they are liable to damages TO YOU. The company has a value. As you said: Due to favourable cashflow with our business model, the incoming revenue covers the debt gap This means that the company in itself is valuable. This is what you own. If the partners want to ...


9

Cliff period is defined as that period until you vest any options. So if your employment is ended at 2 months 29 days, then you would have zero vested options. Waiting one more day gives you 8.33% of your options, or 8,333. Each month thereafter about 2778 options vest. Your base price is essentially zero, or just a fraction of a cent. To determine ...


8

The Equity balance is your Assets (stuff you own) minus your Liabilities (debts you owe to others). It represents your "net worth" - how much money you would have when you would pay all your debts. When you want anything to show up in Equity, you need to make use of the asset and liability sheets. As long as you only manage Income and Expenses, your equity ...


8

“Taking in equity” means selling shares, generally newly-issued shares. “Getting a board seat” means that you can nominate a person of your choice to be one of the board directors of the company. So 500Startups sold shares to Abu Dhabi Financial Group, who now have a representative on the board of directors.


8

The section "Cash Flows - operating activities" starts with "Net earnings" which includes both cash and non-cash items. The non-cash items have to be adjusted with the opposite sign used in the income statement to take their impact on net earnings out of the cash flow statement. The goodwill impairment showing here is undoing its effect on net income. It is ...


7

I can't find a decent duplicate, so here are some general guidelines: First of all by "stocks" the answers generally mean "equities" which could be either single stocks or mutual funds that consist of stocks. Unless you have lots of experience that can help you discern good stocks from bad, investing in mutual funds reduces the risk considerably. Put no ...


6

No. Some profits could (and should) go to retained earnings. You will only received income when it is distributed to shareholders. It happens when the owners decide it should happen. Keep in mind that in the case you cite, $100 profit is made and held as retained earnings, the company's value increases by that $100. Your net worth would increase by $...


5

If I hold a bond then I have a debt asset. If I hold physical silver then I have a commodity asset. If I hold the stock of an individual company then I have an equity asset. Equities, commodities and debts are the three kinds of assets that a person can hold. Edit: I forgot one other kind of asset; monetary asset. If I stuff my mattress with cash (USD) I ...


5

What if there were no mortgage, and you gave the friend the house? They are getting the house' value. In your case the discount from market value is their instant profit. We often think of our house in terms of the equity we have, plus the mortgage. Equity therefore is what's left after the mortgage is paid off, if you sell the house. In your question, you ...


5

Who determines company value at IPO? The Owners based on the advice from Lead Bankers and other Independent auditors who would determine the value of the company at the time of listing. At times instead of determining a fixed price a range is given [lower side and higher side]. The Market participants [FI / Institutional Investor Segments] then decide the ...


5

20% of what? If the company is worth $100, then congrats go enjoy a few drinks this weekend. If this company is expected to be worth $100 billion dollars in the next 5 years, then you would be a very well compensated CTO. The question of equity is how much you are bringing to the table compared to how much the rest of the company is 'worth' (in the case of ...


5

I don't think it's valuable to attribute some sort of motive to your business partner or this quasi blame on that person's parents. It seems to me that you thought you'd effectively get a free full time developer and you foolishly gave up 50% of your operation for that. Now you disagree with your 50% decision maker and want him out. Your partner thinks ...


5

GBp is a common notation for pence sterling (1/100 of a Pound). The current CZK to GBP (pound) exchange rate is about 28.65, so 85.5 CZK is about 2.98 GBP (pounds), or about 298 GBp (pence) which is much close to the 295 quote in London. The difference is not unusual for cross-listed stocks, especially in different currencies.


5

Goodwill is essentially the additional intangible value of an acquired asset. At some point GE bought something for $100 when the book value was only $90, as a result (to balance the accounting) a $10 goodwill entry appears. This is a great example of what makes financial analysis an art not a science. Reported financial statements are one part business ...


4

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 ...


4

The check is written to BigCo. Jack is being diluted, corporation issues more shares. There's no gain, no change in Jack's equity value. Jack didn't lose or win anything. BigCo was worth $1M before the additional money, it is worth $1.25M after the additional money, with Jack owning the same $1M, but the cake is now bigger (obviously the numbers are wrong in ...


4

BigCo is selling new shares and receives the money from Venturo. If Venturo is offering $250k for 25% of the company, then the valuation that they are agreeing on is a value of $1m for the company after the new investment is made. If Jack is the sole owner of one million shares before the new investment, then BigCo sells 333,333 shares to Venturo for $250k....


4

Keep in mind, if the name is trademarked, you might have it taken away from you. If it's generic, there's a good chance the potential buyer would just move on and set up another domain name. Consider web names such as Stockpickr. The proper spelling is there, and remains unused, "This domain may be for sale" at the top of the page. I'm guessing they asked ...


4

If the company does an IPO and offers 25% of the company (2,500,000 shares) and gets $10/share, how would the ex-employee / co-founder that owns 100,000 shares sell those shares for $10/share? It all depends on how the IPO is structured. It can be that new shares are created. Or existing shares of founders are sold. Or a mix of both. This is decided by the ...


4

Equity can be diluted by future investors, royalties get paid on each sale, companies can continue selling things even when operating at negative profit, back royalties due can be negotiated and at least partially paid in a bankruptcy. From the standpoint of the investor: If it doesn't look like the company will likely have commercial success with a second ...


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