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Can a founder take money as dividend from investor money?

Lets say I raise 25 million USD in series A from a VC.

As a founder, can i take 1 million USD as dividend from that money?

If yes, does that mean the VC would take 1 million USD as dividend too?

Edit: Let me clarify few things. I have incorporated my company in US. I need 1 million USD for the eb5 visa since I’m an alien. That 1 million USD requirement should be personal money according to USICS. So basically, i’m not trying to put the money in my pocket. But invest that money in the same business to get eb5 visa.

Answer 12421

Dividends would usually be shared from profits or reserves rather than raised capital and would be issued to all shareholders relative to the proportion of their shares held.

Also, when you raise investment you would usually give a series of assurances over what you will be using the money for. Putting cash immediately into the founders bank is not one that investors would go for, as they tend to believe the founder will get their payout on exit.

If you do not use the money for the things you said then your actions should be justified to your board and your investors and there is a chance you leave yourself open to legal action.

Chances are, a lawyer will be able to come to this question and just say ‘No’ and tell you it is illegal. However I am not a lawyer

Answer 12443

Kev Price’s answer is good, and I’ll add a couple of things:

  1. If they’re investing anywhere near the figures you’re suggesting, they will surely have the founders on a tight leash. (In other words, even absent stipulations about how the money may be used, they’re not going to give it to you all at once, and any use they don’t like would likely result in cutting off future funds.)

  2. If you even try to pay yourself a high salary, they likely won’t go near you. (That is an indication you’re planning to profit off of their investment, rather than be a good steward.)

  3. The use of the funds for an eb5 strikes me as problematic, unless you have something incredibly valuable and proprietary, and you are the only person who can deliver. $1M just to get in the game is a pretty high barrier imo.)

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