> Let's say an investor wants to invest $1 million. If you sell your shares, it will be a taxable event. You'll pay ~$350k in taxes to the government and keep $650k. On the other hand, if you dilute everybody, that $350k can be used by the company to pay salaries for 2 more programmers for another year.

I'm a solo founder who owns 100% of the company, and I forgot how Stripe Atlas set it up for me. My company has a total of 10 million shares, and I purchased 8 million shares at the beginning, and left 2 million shares in the option pool for employees. So if I wanted to raise money, I'd need to issue more shares, instead of selling some of my own (which would be personal income.)

I'm not 100% sure how it works, but I still own those 2 million shares, even if I didn't purchase them. So I don't really know why I purchased 8 million shares, instead of 1 million, or even just 100 shares.

Then if someone wanted to invest $1M, the company could just give them some of the ~unissued~ authorized shares. So I wouldn't need to sell any of my own shares or issue new ones.

Is there any reason why that wouldn't work?

EDIT: Ohhhhhhhh that's exactly how it works already. I got confused between authorized and issued shares. This quora answer helped me understand it: https://qr.ae/TUfj33

Also this Stripe Atlas guide: https://stripe.com/atlas/guides/equity#why-dont-companies-im...

I think it's still a bit annoying that Stripe Atlas only authorized 10 million shares for me, and I already issued 8 million to myself. It sounds like I will have to do some legal work to authorize additional shares for investors in the future.