

Ask HN: Have YC alumns seen adverse effects from pricing common stock early? - lzell

It is my understanding that it can be advantageous for both the investor <i>and</i> entrepreneur to use preferred stock in early financing deals.  From the entrepreneur's perspective the common stock value will remain low.<p>Has anyone seen effects in practice, perhaps surrounding recruitment, of pricing common stock early for a YC (or other) deal?<p>Part two:
Right now our company has 10M common shares, with a par value of .00001.  Is there a "trick" that incubators use to keep the common stock value low when dealing with such small investment amounts?<p>Edit: formatting.
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MikeTaus
Yes to the first question... this is pretty common. But do yourself a favor
and hire a decent attorney to help you. Financing missteps can kill your
company and/or make future financing much more challenging.

