Tag: startup capital

How Many Shares Should Your Startup Authorize Upon Launch?
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How Many Shares Should Your Startup Authorize Upon Launch?

José Padilla is an attorney and the owner of Padilla Law PLLC, where he represents startups and investors. His practice focuses on the formation, seed and VC financings, private equity, acquisitions, strategic corporate transactions, and general advisory regarding corporate and financing strategy. New startups often launch with 10 million authorized shares. Founders often ask me, “Why 10 million shares?”Before answering how many shares of stock a new startup should issue, founders must first understand the difference between authorized, issued, and outstanding shares. What is the difference between authorized, issued, and outstanding shares? The number of authorized shares is the maximum number of shares that a corporation is legally allowed to issue to its investors and stockhol...
Why It Matters: SEC Modernizes Its Definition of an Accredited Investor
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Why It Matters: SEC Modernizes Its Definition of an Accredited Investor

José Padilla is an attorney and the owner of Padilla Law PLLC, where he represents startups and investors. His practice focuses on the formation, seed and VC financings, private equity, acquisitions, strategic corporate transactions, and general advisory regarding corporate and financing strategy. In August 2020, the Securities and Exchange Commission (SEC) amended the definition of accredited investor. The SEC developed qualifications and rules under the Securities Act of 1933 to protect individuals from risky investments.Accredited investors can more freely invest in hedge funds' lucrative and risky world, private equity, venture capital, and equity crowdfunding. Private or unregistered securities are considered inherently riskier, so the Securities Act empowered the SEC to creat...
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