legalI am opening a startup.
I would like to join it as a legal person (e.g. a company) and not in my own name (I will be a majority shareholder of the new startup with 80%) I know there’s lots of financial and legal implications to this, as discussed here Fiscally, it is more interesting for me to do so.
Say this company is called X Inc.
Case 1: X Inc will be owned 80-20 by Y Inc and Mr 1. Y Inc is owned 50-50 by Mr 2 and Mr 3
Case 2: X Inc will be owned 40-40-20 by Mr 2, Mr 3 and Mr 1
Does case 1 and case 2 matter a lot for investors ?
Would case 1 be a deal breaker for investors ?
Technically, the percentage of ownership and control do not have to be in sync; how this is done is really another topic/question in my opinion.
As for your question, clearly all investors want to be in control, but that’s not always an option for a number of reasons.
My experience is that the average investor would be less concerned about control, and more concerned that the incentive for employees to commit to the success of the company would be threatened by you retaining such a large percentage of the company.
In the end, what the average investor wants does not matter, what matters is what the investors that are interested in investing in you care about.
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