Asked by Svetlana Brenner on Jun 29, 2024
Verified
What percentage of a fully diluted company do investors typically like to see set aside for attracting future talent and creating incentives and rewards for high performance?
A) 5 to10 percent
B) 10 to 20 percent
C) 20 to 30 percent
D) 30 to 40 percent
Fully Diluted
Relating to the maximum possible number of shares of a company, including all warrants, options, and convertible securities.
Future Talent
Individuals who possess the potential skills and abilities that organizations look for to ensure growth and innovation in the future.
Incentives
Benefits, often in the form of financial rewards, designed to motivate individuals or groups to achieve certain objectives.
- Understand the components of a fully diluted company and the percentage typically set aside for future talent and incentives.
Verified Answer
ZK
Zybrea KnightJul 04, 2024
Final Answer :
B
Explanation :
Investors typically like to see 10 to 20 percent of a fully diluted company set aside for attracting future talent and creating incentives and rewards for high performance. This shows that the company prioritizes its employees and values their contributions, which can attract top talent in the future. However, setting aside too much equity can also dilute the value of existing shares and may not be attractive to investors.
Learning Objectives
- Understand the components of a fully diluted company and the percentage typically set aside for future talent and incentives.