Selling shares of stock in your business is one way many business owners raise capital. Whether you're just starting your business or are interested in expanding and require funding, selling shares of stock in your company may be an option.
Things You'll Need
- Business plan
- Marketing plan
- Financial statements and projections
Prove that your business is profitable and your ideas have potential in order to convince investors that your stock is worth purchasing. You'll need your complete business and marketing plan, as well as any financial statements or projections, in order to make a convincing argument to potential shareholders.
Get approval from your board of directors and any existing shareholders. If your annual meeting is not right around the corner, arrange for a special shareholder meeting to allow existing shareholders to vote on the idea of selling stock.
Prepare your stock sales agreements and set a stock price. This topic should be discussed by your board of directors or at a shareholder meeting to be sure that all parties are in agreement. Make sure you set a price that reflects the company's value, but is not so high that you will turn potential investors away (see Resources below).
Have an attorney review your stock sales agreements. You'll want to be sure that you've included the appropriate wording that will protect your business and outline the specific terms of being a stockholder. If you have the resources, it may be beneficial to simply have your attorney or accountant draw up the documents.
Offer your stock for sale. You may want to approach investors individually with an offer to purchase stock in your business. This will give you the most control over who has a stake in your company. Be careful with who you choose, because anyone who owns a share of your company has a voice in how it will be run and managed. You want to choose shareholders who share your vision.