When you are starting up your own company, you’re generally not thinking about acquisition. Any stock you give for services (or sweat equity) is likely done out of necessity and expediency.
For the successful and the lucky, those distant dreams of acquisition can become reality. But there are a number of hurdles you can inadvertently set up for yourself in the early days of your company that can make that more difficult. Here are five to beware of:
Not following the formalities of issuing stock - This may seem obvious, but before anyone can own shares, a corporation has to issue the stock. Generally this is a two-step process. The bylaws will say “we, company X, authorize the issuance of Y number of shares.” But then you actually have to go through the corporate formality of issuing those shares, which includes issuing the physical share certificate after receipt of consideration. It’s just as critical to keep track of the shares.
To read the full, original article click on this link: 5 things that can screw up your exit strategy | VentureBeat
Author: Curtis Smolar
