New ask Hacker News story: Question about Anti-Dilution
Question about Anti-Dilution
2 by ccfta_throwaway | 0 comments on Hacker News.
Let's say that you have a captable with multiple share holders, divide to two groups: group A and group B. Now the company has decided to issue new shares. The decision was made to have these new share dilute the two groups differently: 25% of the shares will dilute group A, 75% of the shares will dilute group B. There are two clear scenarios to do this: One: a. Issue 25% of the shares, perform anti-dilution for group B so they remain in the existing ownership %. b. Issue the remaining 75% of the shares, perform anti-dilution for group A so they remain in the existing ownership % as following step a. or, two: the exact opposite - first issue 75% and do anti-dilution, then 25% and anti-dilution. My question is: Does it matter in what order this is done? Whether it is as in scenario one or scenario two? Is one scenario better for Group A and another for Group B? Or is it exactly the same? And a bonus question - can this be done in a more fair way? Perhaps, at the same time? Or use some other mechanism of anti-dilution (value based? something else) to make it more fair? Thanks!
2 by ccfta_throwaway | 0 comments on Hacker News.
Let's say that you have a captable with multiple share holders, divide to two groups: group A and group B. Now the company has decided to issue new shares. The decision was made to have these new share dilute the two groups differently: 25% of the shares will dilute group A, 75% of the shares will dilute group B. There are two clear scenarios to do this: One: a. Issue 25% of the shares, perform anti-dilution for group B so they remain in the existing ownership %. b. Issue the remaining 75% of the shares, perform anti-dilution for group A so they remain in the existing ownership % as following step a. or, two: the exact opposite - first issue 75% and do anti-dilution, then 25% and anti-dilution. My question is: Does it matter in what order this is done? Whether it is as in scenario one or scenario two? Is one scenario better for Group A and another for Group B? Or is it exactly the same? And a bonus question - can this be done in a more fair way? Perhaps, at the same time? Or use some other mechanism of anti-dilution (value based? something else) to make it more fair? Thanks!
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