bootstrap wrote:You do not need to setup an IPO and go public to have shares of a company.
Shares can be sold privately for LLcs. Basically, privately held shares mean they cannot be exchanged on one of the US's public stock exchange. NYSE for example.
I am interested in this oppurutnity, but like highroller I am concered the assay is out of date.
Unfortunately the shares are pretty difficult to sell. So those undertaking this need to be in it until the whole thing is profitable.
The founders of this venture will all buy in. From that point on selling shares will be limited as follows:
You may sell shares to a maximum of 35 non-accredited investors and an unlimited number of accredited investors. If you do not have audited financials, then you can only sell to accredited investors.
Most likely the venture will not have audited financials, but it is possible.Accredited investors are individuals or joint net worth with that persons spouse at the time of purchase that exceeds $1,000,000 or has individual income in excess of $200,000 in each of the two most recent years or joint income with that persons spouse in excess of $300,000.
Selling internally is always ok as well. I.e. one of the founders may buy all or part of another founder's shares.
And the corporation itself can buy out people.
Both of the last 2 depend entirely on the other founders and/or the corporation having money to do so. Generally an internal buyout prior to the venture making a profit will be at a substantial loss for the person selling.
So if you get in, plan to ride it to the very end!Regarding going public (an IPO) that is extremely costly, and requires a corporate structure with audited financials for 3 years. So no dice there
There is always the "reverse merger" option which is always modestly costly (total fees around $125,000 or so). The issue there is that you have to then do full Public reporting which is a massive pain and costly. I've heard several estimates that the minimum cost is $50,000 per year even for a small venture such as this.