How to properly get diluted.

by a searcher

1 year ago

Hello people, 

A very high profile retired CEO is joining my holding company as an investor and also as advisor. 

Till today, i have in my shareholder agreement that i own 51% of the holding and that my shares are non-dilutive shares. 

He wants that my 51% starts getting diluted now so he can brings capital from funds in the future (since he thinks that none big fund will accept that terms). 

How you guys are protecting yourself from getting diluted in potencial furters capital ampliations to make more acquisitions? (when the LBO is not possible). 

Ps.- i am not close to not get diluted but i want to learn how other searchers are structuting their funds. 

Thanks

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13 comments

searcher from University of San Francisco - School of Management

^Searchfunder member‌

11 months ago | like reply | 0 likes

searcher from Ivey Business School at Western University

Good comments here. Consider 1) setting up different classes of shares 2) waterfall schedules for future payouts 3) valuation you're bringing the CEO's capital in at

1 year ago | like reply | 0 likes

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