San Antonio Contract Attorneys & Lawyers

What Are Outstanding Shares?

The term “outstanding shares” (aka “shares outstanding”) refers to the total of all shares of your company’s stock held by all of your investors, including restricted shares owned by company officers and institutional investors.

You will find the total number of outstanding shares listed on your company’s balance sheet under the “Capital Stock Issued and Outstanding” heading. You can also calculate the number of outstanding shares by adding the total number of preferred stock shares to the total number of common stock shares, and then subtracting the total nu

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What is a Convertible Note?

A convertible note is a security instrument, typically used by an angel investor or a seed investor, that takes the form of a short-term loan, either secured or unsecured, to provide seed capital for a business. The convertible nature of the note allows the debt to be converted into equity in the company (typically in the form of preferred stock) at some specified future event, often in connection with the company’s valuation in a later round of funding. Convertible notes are often preferred by seed investors as a way to fund a new company while avoiding the need to value the company in its earliest stages when accurate valuation may be difficult.

Should a company fail before the note is converted, the investor’s interest in the convertible note has priority over an equity interest (st

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Learn more about the types of Corporations below:

Corporation

A corporation is an independent legal entity distinct from its owners. The law views a corporation as a distinct legal person that can enter into contracts, incur debt, and pay taxes apart from its owners. The owners of a corporation also have the benefit of having

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Updated October 26, 2020:

Warrants and options are securities that are related in a lot of ways although they have a few significant differences. Options and warrants both give owners the right, but not the obligation to either buy or sell a principal security at an agreed upon price within a given time.

While a warrant is issued directly by the company or banks that act on behalf of the company, in options the shares are received or given by one investor to another. Unlike stock options, new shares are issued by the company when the stock warrant is created. Warrants are created based on the issuer of the warrant and are always fluctuated in such a way that it meets the interest of the issuer. Where in options, no such variables are seen which is one-sided.

Within the context of startups, an option is the righ

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Updated July 13, 2020:

Over one-third of startup founders have raised money from friends and family. In fact, startups receive more than $60 billion dollars per year from these investors. That's more than angel investors and venture capitalists combined.

Raising money from friends and family has several advantages. They're often more willing to invest in you personally while a larger investor might demand to see a firmly established company. You also might be able to avoid the complex compliance requirements that come with other securities sales.

However, there are many things you need to be cautious about before you take money from friends and family such as:

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