IT:BD:Finance/Value Of Company

Consider the following scenario:

• Two partners:
  • PartnerA puts in a year of work, afterhours, at 4 hours a day, at going rate of 80K/annum. As it's half a day, the value of the work is 40K.

    • Maybe it's worth more: http://www.entrepreneur.com/article/182440
    • PartnerB puts in 9K of cash equity.
    • The notional value of the company is therefore 49K.

    * The company is formed with 1200 shares.

  • The Notional Ref value of the company is therefore 49K/1200 := $40.83
  • It's notional as its face value, without intent to be sold/tested.
  • At the end of this period of time, the company has

    • additional assets in the form of computers, worth 5K.
    • created IP that
      • if sold incomplete on the open market, would be worth 5K
      • if completed, could be worth 2,000,0000.
    • The Total value is either:
    • 49K + 5K + 5K (ie, 59), and to attract an additional 200k of investment, would mean that the additional shares would be worth 200/259 of the company.
    • To attract an additional 200K, would be worth 200,000/2,000,059 of the company.

    In addition, the sweat van be valued as shares, or a loan, that is either secured, or unsecured.

• Constitution (Rules)
  • Lodged with Company's Office
• HouseKeeping
  • Accountant
• Shares can be allocated by:
  • Share Holders Agreement (less formal, but signed).