This is a good concept to understand before you start chopping up the company :)
George represents my company TrailBehind.com, and I'd recommend his firm to anyone looking to found a start-up. George's firm deals only with founders (and not VCs), which is not so common a thing in the valley.
He gives good practical advice (like you can read in this article), and the firm bills very fairly and transparently.
Great article. Precise and still void of legalese.
Another way to reason about ownership of a company where two founders have 1 million shares each out of 10 million authorized shares goes like this:
The company owns the remaining 8 million shares. So when a founder has N% of the issued shares, he indirectly owns N% of the shares owned by the company (remaining authorized shares), bringing his "effective" shares to 1 + 4 = 5 million. 5 out of 10 million shares, so he owns 50% of the company.
George represents my company TrailBehind.com, and I'd recommend his firm to anyone looking to found a start-up. George's firm deals only with founders (and not VCs), which is not so common a thing in the valley.
He gives good practical advice (like you can read in this article), and the firm bills very fairly and transparently.