In the process of going public, the distribution of original shares is a critical and complex issue. It not only affects the interests of the company's founders and early investors, but also affects the company's governance structure, future development and market competitiveness. Therefore, a sound original share allocation strategy is critical to the company's success.
First of all, we need to clarify the concept of the original stock. Original shares refer to shares issued by a company before going public, and typically include shares of founders, early investors, and shares held by employees. These shares tend to have a higher value after a company goes public, so the allocation of the original shares needs to be carefully considered.
Before a company goes public, the distribution of original shares usually follows the following principles:
1.Founder's shares: As the core team of the company, the founders usually hold a certain number of shares at the beginning of the company's existence. The distribution of these shares is usually determined based on the founder's contribution, ability, and responsibility. In general, the founding team should hold enough shares to maintain control of the company, while also taking into account the share dilution in the event of the introduction of new investors or equity incentives in the future.
2.Early Investor Shares: Early investors play an important role in the company's growth, providing financial support, market resources, and other key resources to the company. As a result, early investors usually receive a percentage of the shares in the original share allocation. The distribution of these shares is usually determined based on the amount invested by the investor, the time of investment, the conditions of the investment, and the contribution to the company.
3.Employee Shares: Employees are an important part of the company, and their efforts and contributions are critical to the company's success. Therefore, in the original share allocation, a certain percentage of the shares are usually reserved for employees to motivate them to create greater value for the company. The distribution of these shares is usually determined based on the employee's position, responsibilities, performance, and the company's equity incentive policy.
In addition to the above three principles, the allocation of original shares also needs to consider other factors, such as the company's financing needs, future expansion plans, market competition environment, etc. Therefore, when formulating the original share distribution plan, the company needs to consider various factors comprehensively to ensure that the distribution plan is both fair and reasonable.
In practice, the distribution of the original shares is usually planned and arranged in detail before the company goes public. This includes determining the shareholding ratio of each shareholder, formulating an equity incentive plan, and setting up an employee stock ownership platform. At the same time, the company also needs to fully communicate with investors, lawyers, accountants and other professionals to ensure that the distribution plan complies with laws, regulations and regulatory requirements.
In conclusion, the distribution of original shares is a key link in the company's listing process. By developing a reasonable distribution plan, you can motivate your team members and investors to contribute to the company's future growth, while also laying the foundation for your company's long-term success. Therefore, the company should fully consider various factors before listing and formulate a fair and reasonable original share allocation strategy.