Its simple. In this particular example you just equate according to final ownership after dilution. In this example existing shares should be equal to the 90% of the shares post dilution. Hence 90% of Final = 100 shares Hence 100% of the final = 111.1 shares You just round down to 111 and add the difference of 11 to existing shares.
What? I had given the most right answer, you guys didn't commented back. Through my method, new investor would get exactly 10% share. Go check that out.
Saw that. Great method- but selling shares is a true mess. It would likely cost hundreds/thousands of dollars in legal fees to get it done. Clever solution, but it's unlikely a company would use that method.
Oh! Thanks i didn't knew that, selling share was tough. So in this case company should issue 111,120 new shares. From these give 4 each to old founder and remaining 111,112 to new investor. So net share would be: F1 -5,000,004 = 45% F2- 5,000,004 = 45% Inv- 111,112 =10% Total - 1,111,120 =100% Through this new investor would get exact 10% For $100,000. PS: Thanks for insight. And i think that yet nobody have given the above answer so still i am winner.
