Dear SBAer, I am the founder of Carbon Free Solutions Ltd (formally RHI Ltd) and I originally wanted to use an American (NASDAQ) type pricing for my shares. That is, minimum price USD 10.00 each with a only 500,000 shares on issue.
But as we are in Australia, so I was convinced to use 'penny dreadful' pricing. That is first round investors paid $0.01 per share. Later investors, paid $0.05 and the latest round of investors are paying $0.10. In a few month when (if) we will list on the ASX the mug punters (retail investors) will pay $0.20 per share. I originally owned 93% of the shares with other held by directors, friends and family. After the second round I owned 55% of the shares. With the current 3rd round, I will own about 28% of the company and if the float occurs I will be down to under 20%. Unless I pay large amounts of money, I will be diluted to death. Of course, I can walk away from a company I have worked for years without pay and have risked both my marriage and my wife's house for. Even if the float occurs my share are held in escrow for 2 years where I can not sell them even if I wanted. Bottom line is that growing companies need cash. If you can not generate cash from retained earnings (sales) you need external investors and they will demand a heavy price. Do not feel sorry for me as I may have succeeded. (After the cheque(s) clears I will pay for a party or two) It is much better to own 5% of something worth $40 million than 100% of something worth zero. Richard Hayes -- You received this message because you are subscribed to the Silicon Beach Australia mailing list. Guidelines on discussion: http://tr.im/ujKF No lurkers! It is expected that you introduce yourself: http://tr.im/ujMm To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/silicon-beach-australia?hl=en?hl=en
