Quote:
Originally Posted by BoKnows
im very curious how much that Dane guy from sweet pete's is entitled to for owning 50% of the shares.
and if he were to get diluted down to 1% but the company was making $5mil a year, is it worth more than just the $150,000 he wants?
can anyone explain?
It depends on how you value the company.
If you base it on the profit per year the value is $0. Technically it is less than that.
Obviously there are things like assets (not much as the partner owned the building) and goodwill to take into consideration. In the end it is worth what someone will pay, but seeing as the couple could just leave and the business would fold not very much.
Do you mean $5 mill in sales or profit?
If it is $5 mill in sales then it is worth less than the $150k he was asking for. If $5 mill in profit then it is worth around the $150k he was asking for.
The problem with him being diluted down is that they probably did not have it in place to share all profits based on shareholding, so technically he could still get paid $0. He would only get his money if he sold his 1%.
Hope that makes sense and helps.