Investing in business?

Nedra Oltz: Investors in Google were stockholders. Purchased stock, or were granted stock in original incorporation. If you start a business, and it needs more capital than you can borrow, you sell ownership interests in your company to people who want to invest. Ted Turner was the founder of TBS. CNN, CNN2, TCM and other cable channels grew out of TBS. He owned the vast majority of TBS. All good. After corporate expansion, when merged with Time Warner I think he owned less than 6%.Percentages are based upon paid-in capital ratios at incorporation. A basic accounting course would explain better than me. If three people invest 1,000 each at incorporation they each own 33 1/3%. Those interests will be diluted when they sell 70% of the company to investment bankers, for Billions. Then each 1/3 would be 10% of those Billions.The 23 1/3% of shares each original shareholder had is sold to the investment bankers, which they further sell to the public. The original in! vestors keep the cash minus expenses....Show more

Roselee Mczeal: Andy Bechtolsheim, one of Sun Microsystems founders was the first to invest $100,000 in Google.It would be a L.L.C.

Giovanni Malool: also,my friends would be the ones who invest in my business and i would invest a small amount and i would be the one running it.

Virgil Menefee: well, usually you get a percentage of the common equity shares of the company. How much? That's to negotiate based on your calculations, and potentially based loosely on what other investors are getting in similar deals. If its a startup, unless its is an unusually high cash flow business there won't be much cash for dividends. If an LLC is made, distributions can be made without tax to its shareholders and its still incorporated. But mostly that money is tied up for a long time and you won't see it for a while. Mostly, venture capitalist etc are looking at getting their money out in 5+ years, after selling the co! mpany to another company, taking it public on the stock market! , or having some new investors take you out. I don't know what story you are talking about w GOOG specifically, but if you are also going to run the company as well you can pay yourself a salary/bonus (a level agreed w other investors). If not, and you are just a passive financial investor, its a long holding period until liquidity / capital event can happen. ...Show more