Popular Equity
no shares
no shares
Why no shares?
Shares provide a ledger that tells us who owns what share of something. They also translate the current trading price into what we think our shares are worth in terms of real dollars.
Instead of using explicit shares, ownership at popular equity is denominated in dollars and percentages. That gives us two advantages: people can trade arbitrarily small amounts without needing fractional shares, and we can smoothly dilute ownership to accommodate additional seed capital, without having to issue new shares or split existing shares.
Two classes of ownership
During the seed stage, investors are adding money to determine their ownership share of a new venture. At any point during the seed stage, the venture is always split 20% to investors, and 80% to the venture. That means that each additional investment dilutes the investors without diluting the venture.
So there are two classes of ownership: investor class and venture class. Only the venture itself has venture class ownership, and that ownership trades 1:1 for investor class ownership. In the very strange case of the venture investing more money in itself, that additional ownership would be investor class.
Details
To keep track of gains and losses for tax purposes, we keep track of the dollar amounts invested at each lot. To buy and sell, investors list the dollar amount they want to trade, and when they're selling from whatever lot (or strategy: FIFO, HIFO, etc) they want.
Next: seed stage
Contact: noshares@popularequity.com