Understanding equity dilution in startups

[@raajesharya]

Very well spoonfed, Rajat. Loved the tutorial. Best wishes.

[@Monika-oo3vx]

Rajat, you are making amazing and rare content. I had some doubts in iim class but seeing your videos solved it.please advertize more and get visible in you tube algorithm 😊

[@alihamza_124]

Company registor kaise karwai ..is topic pr v video banaiyea sir

[@dhavalnai6000]

Sir thanks, isi tarah se Shark tank ke or bhi tarms samjae. App bahot achha samjate he. It's very helpful.

[@shubhampawar2001]

Best explanation ❤

[@RaNaG-z5j]

Great your explaination wow very impressive.Thanks Sir Love you❤🙏

[@SurajKumar-sp4ow]

Thank you sirr...... Plz.. make more videos... ❤️❤️❤️❤️😘

[@Factsinfocity]

Good explanation sir I understand very easily thanks ❤❤

[@erjatinsapra9108]

Sir make a video please jisme valuation ke hisab se shares ke rate increase ho and new investors add hone par b shares ki value/rate increase ho rahi hai... jisse of zada clarification hojaega pre and post money valuation. And please add investor exit method also in it..

[@RajeshBachani]

Exactly. Very good basic information. I was also though looking for something like this - where I could understand how the dilution works based on the new valuation of the company and examples around those scenarios. Because when Bharat and Vikram will come in, the valuation of the company will have increased. Also one question I generally have is around the balance sheet items of share capital and reserves and surplus. I am always amazed to see how the share capital can be a few crores and how the totally equity value of the company can be in thousands of crores. If you could also touch upon that in the same video because it explains the new valuation etc. and how dilution works in those terms. Thank you!

[@atuldhule6556]

Thanks sir..nice explain 👍

[@kimjongn.koreawale1174]

Thank you so much sir u r a great teacher and entrepreneur

[@abhisheksoni751]

U teach very well😊

[@techpoint7157]

Nice Explanation

[@sumit-jadhav]

Different situations for founders : Big Company - Large Equity Big Company - Small Equity Small Company - Large Equity

[@jubinsonowal4959]

kya sachmainn investor ka bhi stacke dilute hota hain

[@rahulrabha5433]

Wow ..you make its sample ....

[@abhijitsahani944]

👍❤️❤️ khub bhalo 🙏

[@aditysinh8026]

Great 👍

[@abhishek-prajapati777]

Thanks you Sir, Pls Rajat Sir aap eshe Video banate rahana :) Apki videos mujhe samajh me aa jati hai. Kya Aap koi ek Magazine and Books share karenge ?? Pahale wala Video mujhe puri tarah samajh aaya tha.👌👌

[@gobaraGanesh]

Nice info

[@aditysinh8026]

So useful points. thanks

[@daniyalanwar2272]

Sir also make a video related (Clif vesting provision ) between an founders agreement .. make a detail video so I can clearly understand

[@luxurydreaminthane9106]

Kya ESOP company ke equity me se dena hota hai ? Shears kaise bante hai company ke ?

[@rahulshah-xq6jr]

i am understanding equity but How to equity calculate in no of share? Example you hold 12% equity or 5,00,000 share so how this calculate.

[@hat_awesome21]

Hello sir if a company gets profit of 1cr will the profit also be shared based on equity ?

[@rajatyadav800]

Generally, no. Profit is reinvested into the growth of the company. Some part of it can be given as bonus/incentives to the active founders.

[@hat_awesome21]

@@rajatyadav800 then how rich people like elon musk bill gates buy expensive cars and yatches if most of their wealth is in shares ?

[@jaisharma8056]

thanks for the video sir. I want to request you to make a video on "growth over profitability initially" This concept is totally out of my understanding why companies are choosing this model ? and investors are okay with it. because of this model companies remain unprofitable for like 10 years and isn't that scary ? keep raising funds but profits are nowhere. example :- paytm and oyo and so so many of them but still investors go with this model of growth over profitability........please explain this in detail sir. what are the pros and cons of this model and what if a startup chooses profitability over growth initially ?

[@rajatyadav800]

Great suggestion. Will cover it up soon :)

[@Cristianoo_Siiuu]

Sir then how Flipkart fire Sachin binny?? If he is owner of Flipkart

[@daniyalanwar2272]

Sir tell me about shares ? In a startup of company how we can decide of total shares ? 10,000 shares how can I imagine ? Thank you for making this type of video !

[@MrX-eb6dv]

Wow 🤩

[@Landscape_alongtheway]

100% Equity depends on company's paidoff capital or authorized capital???

[@rohanrajput2706]

How oyo , ola, big basket gets valuation in billion $, even if they have loss till now. Please Reply 🙏🙏🙏

[@rajatyadav800]

Will make one on this topic soon :)

[@ashishlohra]

@@rajatyadav800 please do! Great topic!

[@Theabhiksinhaa]

Ye 10000 shares kaha se aaya, kinse aata hai?

[@crazyedits100s]

Sir, ek company ha jiske pass 10 lakh shares ha. Or wo company crowdfunding se Rs.10/share ke hisab se 50% stake sell kar dete ha. Or next round me company apne shares or badwa kar sell kar sakti ha kya.

[@crazyedits100s]

Toh next round me public ke shares par koi hasar na pade. Hasi koi trik ho toh bataye.

[@anokhsingh4302]

Thanks

[@thakur_hai_hum_thakur]

Can we prepare start up valuation by our self instead of through CA? Because they are charging alot. If yes then how any idea?? I have texted you in insta as well.

[@rajatyadav800]

Early Startups never need a CA. Watch this: How to calculate your Startup's Valuation? kzbin.info/www/bejne/pZLHkmCAg6mfftU

[@thakur_hai_hum_thakur]

@@rajatyadav800 i have already watched this video, using DCF we have valued our startup but my investor is saying that the numbers are not justified, he wants source of these numbers and risk parameter, competitive analysis, assumption, He is foreign investor, if you can mentor on this to me, I would be grateful to you

[@kharishrao7163]

Equity dilution applicable for 2nd investor.?..means dilution is applicable for all upcoming all investors in future?

[@rajatyadav800]

yes

[@soumik76]

Does an existing investor also dilute on future fundraising rounds?

[@rajatyadav800]

Yes, unless there is an anti-dilution clause in case of a down-round.

[@Cristianoo_Siiuu]

Sir please also tell anti-dilution clause

[@rajatyadav800]

Will cover it soon :)

[@s2wwings578]

Very sad not in English. any help?

[@saltitup]

Founders set up % equity in Company at the advent. When an investor (advisor, or anyone) comes in to a the Company he is promised a certain %. The remaining folks get their equity shares reduced proportionally. Each time someone takes a promised % of equity the people who are already equity holders get their percentage reduced proportionally.

[@alihamza_124]

Agar hum grofers ke baat kare to usne 2289cr ka revenue kiya jisme net income -1181cr tha. To business bina profet ke hote hue survive kaise kar rha hai. Plzz make a vdeo on this topic.

[@MLBB-Local-Tournament-India]

Dose the first investor also gets equity dilution, When raising the new funds from the same investor? Assuming that the first investment was done by the same investors before.

[@rajatyadav800]

Yes, the equity gets diluted.

[@asharwebacademy]

There are some comments where people and I are waiting for your reply can you please reply? Question: is it mandatory to dilute equity from all owners? Suppose during the company foundation if Rajat and Bharat agreed that Bharat will not sell their ownership if an investor comes in this case only Rajat can sell their ownership?

[@rajatyadav800]

No, it is not mandatory to dilute equity from all holders. A few can have anti-dilution clauses preventing their equity from being cut. It is happening in PharmEasy where a few investors are getting dilution protection.

[@razorrush9137]

Sir is there any way to get ownership besides paying cash.. like co founder is saying that I am devoting much time so I need 10% more so transfer some of your stake to me... but others r saying that you have to pay cash for that?

[@rajkirandutt]

Kya investor dilution karte he..agar 1st round investor funding karte samay trums rakhte he ki 2nd round funding lete samay mere equity se dilution nehi hoga to 2nd round funding lete samay vc investor ka dilution kyse hoga.? Founder and co-founder se hoga equity dilution

[@asharwebacademy]

@rajatyadav800 please reply

[@viratjohare9975]

Sir investor ko kaise profit milta hai equity lekar? Please Reply 🙏🙏🙏

[@rajatyadav800]

Profit sirf tab milta hai jab koi aur investor ki equity khareed le. Warna nahi.

[@jaisharma8056]

@@rajatyadav800 dividend nahi milta kya sir ? if company is profitable

[@rajatyadav800]

No, not in case of startups. Dividend is mostly in public companies.

[@saifilicious1749]

I have a question? How did we determine this 10,000 shares? Is it Possible to do any Valuation without starting the company? Please answer

[@rajatyadav800]

Yes, it is. Valuations is nothing but a paper game. The key part is, majority others should believe at your valuation, that's the acceptance of it.

[@adityagupta7288]

"naye investor aane pe humari equity kyun kam ho"- ye sawal bio me apne aap ko entrepreneur likhne vaale non scalable non innovative business owners hi puchte hain

[@hb_official7205]

@RajatYadav Hey buddy, it's a great content for every Enterpreneuer 👌 but tell me if anyone's more equity is dilute in investment process then what's the benefit for them ? For Ex. Rajat Is holding 1.5X equity than Shubham, so when you introduced an investor like Bharat then your equity Dilution is more than anyone else that is 1.5X so how will you get more benefit of this company in long term process ?

[@ashishlohra]

When a new investor jumps on board, does the dilution of shares ALWAYS has to be proportional to the % held by existing company owners? Is it by law? Why can't it be arbitrary? For ex: Scenario: Rajat - 60% Shubham - 40% New investor - wants 10% Rajat decides that Shubham is working a LOT for the company, and hence decides to ONLY DILUTE his equity, so the new structure would be: Rajat - 50 Shubham - 40 New Investor - 10 Is this possible?

[@asharwebacademy]

@rajadyadav800 can you please answer?

[@ashitoshbhagat632]

Sir हिंदी मे ही video banao

[@AnokSingh-yj8sd]

Thanks

[@anila3607]

Great 👍