Assuming we had cash in our startup. If one founder owns 70% and the other owns 20%, 10% is option pool. What is the ratio in which we can take cash out? The person owning the bigger chunk needs more cash.
Assuming we had cash in our startup. If one founder owns 70% and the other owns 20%, 10% is option pool. What is the ratio in which we can take cash out? The person owning the bigger chunk needs more cash.
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Um… Taking cash out (outside of salary) is a really bad idea. Why do they need that much cash?
You can do it as dividends. But unless you are an S Corp you get taxed twice which isn’t a good thing.
If it’s beyond agreed on salary, then make it a loan against owner’s equity, dividends, profit sharing or whatever arrangement you have.
BTW, if one owner has 70% he/she can pretty much do whatever they want.
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