Common causes of stock dilution The need for new capital: When private companies need more capital, they typically issue new shares to investors in a funding round, which reduces the overall percentage of ownership for existing shareholders. Increasing employee pool: Incoming investors usually require companies to create a stock option pool. The timing of when […]
Common stock and preferred stock both offer different benefits to shareholders. In general, common stock is reserved for employees, while preferred stock is given to investors.
Unlike public companies where value is set by the market, private companies use independent appraisers to assess their value. Fair market value is the current value of a private company’s common stock and it determines the strike price.
Carta makes it easier to keep your cap table up to date and stay compliant throughout your company’s lifecycle.