Selling Stock In Your Company For Beginners

Selling stock in your company is something a lot of small business owners dream of when first starting out. It’s a big move to make, and it’s a surefire sign that you’re in a very successful position! However, the steps you need to take between now and when you’re ready to list your company can vary. 

Maybe you’ve just started a company of your own and you’ve got big plans for the future, or maybe you’re at that point where you know you have the chance to sell off shares and no one would bat an eyelid. Either way, there’s a lot you need to know about selling stock in your company – it can be a complicated process, and you’ve got some serious research to do! 

Figure Out Why You Want to Sell

Think about why you’d need to put your company on the stock market, or generate private investment, as your first guiding hand here.

• Do you need more capital? Do you need to pay off debts?
• Are you looking to hand off responsibility for the company to someone else? 

Using stock plan services here could help you to pin down the reason you’re looking to sell shares in your company – this is a record of how much capital you’re generating, who’s involved, and what you want out of the stock market itself. 

Figure Out Your Selling Style

Most small business owners are going to want to secure ‘partial’ sales; these help to bring more capital into your company, help to motivate your team towards doing better, and ensure you’re not alone in running the enterprise at its most difficult time. However, if you want to stay in charge, you need to be sure you don’t sell off too many of these. 

A complete sale, in comparison, will transfer your company from your hands to someone else’s, and that’s probably not on the cards for you at the moment. Make sure you keep an eye out for terms like these when attracting investors to you. 

Figure Out Who You Want To Sell To

And finally, you’ve got to decide where, when, and to who you’re going to sell. You’ve got quite a few different options on your plate here. A lot of small companies will start by selling off portions to their own employees – it won’t raise more money for your company, but it will cut down on payroll, and ensure the team you’re running really are involved. 

You could also think about selling off to outside investors, both small and big. A small investor, such as a close, personal friend, is a good pick when you’re at the small stages, and it will cost you a lot less in the long run. Selling to large investors, on the other hand, will demand a lot in return for investing – a seat on the board or a different hiring structure are two very common requests here. However, you’ll raise a lot more money for your company.