Hi Alam, two points: 1) I made an error in writing: it should be (x/(10000+x)) and not (x/(1000+x)). 2) The exact value of x = 989. To keep things simple, i made an approximation of 989 shares to 1000 so that percentages are not in decimal.
Everybody wants to show how complicated the things that he know are so that there status in the other person mind rises that how well he knows But in reality everything is easy its just people make it complicated
Sir u are underrated and u will be underrated becz not everyone is entrepreneur mindset and wanna learn... Only top 2-3% who are genuinely interested in these topics searched and reached u... Don't stop creating contents thank u.
When you were explaining for the 3rd Investors (80%/20%) and the third one ask for 10% of the company, you could’ve just said that the initial shareholders will just give him 10% of their percentage and it will be (8% + 2% = 10%) and they will be (72%, 18%, 10%) There is nothing wrong but this could be faster for you. But great video man👌🏼🔥Thanks
i've bootstrapped my company and based on my Y2Y revenue my company valuation is 10 cr and I yet to take any investment. thanks for explaining the basics so I can go for the first round.
The value of X= 1000 ?? There is a mistake... In video at 26:59 take value 10000+X and further solve equation u will get value of X= 989.01 Means the new share which will be added = 989... Small mistakes are happened but sir u explained extremely good.... Thank you so much.... Please make more videos like this...🙏🙏👌👍
Same Here I Was Confused I Checked Again & Again The Value Was Coming Out Be Exact 989.011 Each Time Then I Opened The Comment Section And I Saw Your Comment Thanks For Putting It Up & No Doubt He Explained Very Well.
@@peterofficialchannel4776 X/10,000 + X = 9/100 We Will Now Cross Multiple Each X(100) = 9(10,000 + X) 100X = 90,000 + 9X Now 9X Is In Addition On The Left Hand Side When We Shift It To The Left If Will Be In -(minus) 100X - 9X = 90,000 91X = 90,000 Now 91 Is In Multiplication Of X When We Move It On The Left Hand Side It Will Be In Division. X = 90,000/91 X = 989.011 Hence Proved The Value Of X Is 989.011
Thank you for this content, this is something which is not tought in college,and searched on TH-cam as well but I didn't found but luckily I found your video
yes exactly... even i know almost 70 80% but my few doubts were cleared thank you.. 1 more thing right no video or content is available on youtube but i have made videos on in or teach to my students same as u take all these example like this... !
I actually really enjoyed this video! Appreciate you working out the basics, walking thru the concepts in most simplified way. It would have been good if I can understand it so much better after scouring the net to grasp the basics. 🎉
Thank you for this knowledge i'm about to startup a new company and had absolutely no knowledge on how to share equity or structure the company, i was about to pay a legal advisor or a consultant to assist me with this negotiation due to investors waiting to invest in my company, now i can do it on mt own and fully understand what i'm doing without being confused or unsure, thanks to this video 🤝
At 13:01 the calculation of transfer can also be done by deducting the percentage of new owner from the previous owners. E.g. C1 had 80% C2 had 20%. Now C3 asking for 10%. Therefore, For C1 (80-(80*10%)) = 80-8 =72% Same for C2. But, great explanation Thank you.
Please make more calculation related videos like this, based on investments and startups. You are the only person on TH-cam under this category (investments and startups) whose videos are useful in real life !
Thank you so much for this video its very rare to find really informative content its fine if the content is hard but plz keep it true and informative Looking forward for more such incredible content from you Thank you again for sharing your knowledge
Hi you should turn off Auto Focus on Camera. Fix Focus manually. Focus is jumping in the video at 1.41 and 1.56 camera function defocus. Use a Black body pen. The camera AUTO focus disturbs the Aperture also.
You should compute the total outstanding shares first after the dilution. Total Outstanding Shares = 5000 / (0.455) = 10,989 So the 9% is 10,989-10,000=989 .. The company creates 989 new shares
Sir apni english thodi week h.. But aapne itne achhe se sumjhaya ki samajh aa gyi...kisi hindi video me itni information nhi.. Mai 2 din se search kr raha tha... Thank you so much 👍
I really needed this clarity from long time. Thank you so much sir. You are absolutely correct why should one waste time and make things complicate for onself after all this so easy . !!!
Honestly, 🔥🔥🔥You are the only person in a TH-cam platform Teaching these kinds of stuffs in understandable manner in English. Sir I have doubts 1) what if 2nd investor came later to invest? Does the company valuation will be same or I can increase the valuation of a company? 2)And what does that valuation of company means?. Does valuation is the price of company if any want to acquire 3)What if a cofounder has a stake of 20%. And the company has the money of 20 lakhs. And after some traction investor invested 1cr at 20% dilution. Does the cofounder has the rights in 20% of 20 lakhs (or) 20% of 1.2cr. (Or) 20% of 5cr? Thank you👏👏
Glad you liked it :) Answers to your questions: 1) Upto you and you negotiation with the investors. You can increase, decrease or keep the same. 2) it's simple. That's the value of your company. If someone buys your company in a cash deal, you will get that much money. But then, someone should agree to buy it. 3) 20% of 5cr
Good bro. But, C1 and C2 give out 10% share from their total holding ( C1- 8% is 10% of 80% and C2- 2% is 10% of 20%). It wouldn't be 2% or 8% from their holding. Their sharing to 3rd partner would remain same in terms of % but when it comes to propotion it would look less for C2 (which is Y in your calculation).
Gates remains one of the largest individual shareholders of Microsoft. As of December, he held more than 100 million shares of Microsoft, roughly 1.3 percent of the company's shares. His stock is worth about $16 billion . . . according to this statement bill gates own 100million shares so how can we increase ownership shares
Sir for diluation for a common person the calculation is cumbersome.i make it more easy no need of calculation.if X is having 80% Y is having 20% C is to be given 10% 10%of 80 is 8% 80-8=72%and remaining 10%of 20 is 2%=2% ie 18% total is 72+18+10=100
This is superb teaching. You make it so easy to understand. I have a doubt here. I want to understand the case if one of the co-founders wants to exit the company. Will he/she able to sell the shares ? If yes ? who will take the shares ? who will pay for those shares ?
I have also seen the earlier video about company structure, will say, this is one of the best explanation. Sir will you make video on, "if 2,3 investors invest then how would be the calculation??
It is very simple. If multiple investors are investing at the same time, treat them as one single investor and then calculate by the method in the video. When you find the value of x this way, distribute it among the investors.
Company cash vs company evaluation is different owner has invested 1lac investor has invested 10lac now evaluation is 1.1 crore but who will give that extra money?
I can't figure out that how did u calculate The value of X which come out 1000?? Can u help me?
Hi Alam, two points:
1) I made an error in writing: it should be (x/(10000+x)) and not (x/(1000+x)).
2) The exact value of x = 989. To keep things simple, i made an approximation of 989 shares to 1000 so that percentages are not in decimal.
A simple way of saying is both will give 10% of their share. 10% of 80% and 10% of 20%. 8% and 2%. Algebra is not required ; )
Exactly
Everybody wants to show how complicated the things that he know are so that there status in the other person mind rises that how well he knows
But in reality everything is easy its just people make it complicated
@@ShreyashPatil1811 absolutely ryt 👍🏻
Absolutely!
Same thing that I thought 😆😂lol
Sir u are underrated and u will be underrated becz not everyone is entrepreneur mindset and wanna learn...
Only top 2-3% who are genuinely interested in these topics searched and reached u... Don't stop creating contents thank u.
Hi Bharat, thanks for the appreciation. This is what keeps me motivated :)
When you were explaining for the 3rd Investors (80%/20%) and the third one ask for 10% of the company, you could’ve just said that the initial shareholders will just give him 10% of their percentage and it will be (8% + 2% = 10%) and they will be (72%, 18%, 10%)
There is nothing wrong but this could be faster for you.
But great video man👌🏼🔥Thanks
Same what i was thinking
True..that would have been more easier and you get more time to explain actually complex topics.But excellent video. Thanks
Actually😀.. He made the explanation complex
@@mohammedansar2840 yes
Your way of solving will be only useful for simpler ones which can be divided simply😉
Man this is the best ever explanation I have ever came across amazing explanation Rajat way to go you gain a valuable subscriber
your method of coaching is amazing. you should write a book of all these videos.
i've bootstrapped my company and based on my Y2Y revenue my company valuation is 10 cr and I yet to take any investment. thanks for explaining the basics so I can go for the first round.
Doing Great job bro..Watched your all videos in one go...Helped me a lot.Thanks a lot.
18:42 you are wrong if the both investors give 4.5/% then they have 45.5% equity each and the new investor (I) has 9% . Total 45.5+45.5+9 = 100%
The value of X= 1000 ?? There is a mistake... In video at 26:59 take value 10000+X and further solve equation u will get value of X= 989.01
Means the new share which will be added = 989...
Small mistakes are happened but sir u explained extremely good.... Thank you so much.... Please make more videos like this...🙏🙏👌👍
True,
Same Here I Was Confused I Checked Again & Again The Value Was Coming Out Be Exact 989.011 Each Time Then I Opened The Comment Section And I Saw Your Comment Thanks For Putting It Up & No Doubt He Explained Very Well.
You guys are getting 989.01 while me 98.901....😂😂
@@peterofficialchannel4776 X/10,000 + X = 9/100
We Will Now Cross Multiple Each
X(100) = 9(10,000 + X)
100X = 90,000 + 9X
Now 9X Is In Addition On The Left Hand Side When We Shift It To The Left If Will Be In -(minus)
100X - 9X = 90,000
91X = 90,000
Now 91 Is In Multiplication Of X When We Move It On The Left Hand Side It Will Be In Division.
X = 90,000/91
X = 989.011
Hence Proved The Value Of X Is 989.011
You got it right. Mistake from my side :)
Bhai first 5 min m hi fan ho gya aapka... And subscribed your channel
🙏🏻
Thank you for this content, this is something which is not tought in college,and searched on TH-cam as well but I didn't found but luckily I found your video
I got cleared what my doubt that were in Equity dilution. Very much thanks. Very much appreciated for this video.
50-4.5= 55.5 ☺️ IITians are not superhuman they also make mistakes just like any other college students, dekh k acha laga.
45.5 not 55.5 . when you correct others don't make another mistake..!!
yes exactly... even i know almost 70 80% but my few doubts were cleared thank you.. 1 more thing right no video or content is available on youtube but i have made videos on in or teach to my students same as u take all these example like this... !
I actually really enjoyed this video! Appreciate you working out the basics, walking thru the concepts in most simplified way. It would have been good if I can understand it so much better after scouring the net to grasp the basics.
🎉
Glad you liked the video :)
Thank you for this knowledge i'm about to startup a new company and had absolutely no knowledge on how to share equity or structure the company, i was about to pay a legal advisor or a consultant to assist me with this negotiation due to investors waiting to invest in my company, now i can do it on mt own and fully understand what i'm doing without being confused or unsure, thanks to this video 🤝
Woww!! This is Simply Amazing..I'm glad I have found you.. Keep up the good work bro 😊👍
I had already calculated that in my head by simply subtracting 10% for each. However, thanks for explaining the basic concepts of Company, share, etc.
Sir, you are literally too much undervalued.!
I have learned within 40min of your video that have done with my four years into academic degree.
Everyone must understand this, even before going for a Pitch.
will save a lot of time.
You are a genius, Rajat. People need to learn how to melt a stone. Wow!!! Thank you for simplifying such a hard subject.
At 13:01 the calculation of transfer can also be done by deducting the percentage of new owner from the previous owners. E.g. C1 had 80% C2 had 20%. Now C3 asking for 10%.
Therefore, For C1 (80-(80*10%))
= 80-8
=72%
Same for C2.
But, great explanation
Thank you.
Its much simple.
Please make more calculation related videos like this, based on investments and startups. You are the only person on TH-cam under this category (investments and startups) whose videos are useful in real life !
Excellent explanation bro... You got my dbts cleared... Thank you so much...
Crisp n clear!
Clearing away all of my doubts. Thank you sir for such a good explanation.
Glad the video helped you :)
Thank you so much for this video its very rare to find really informative content its fine if the content is hard but plz keep it true and informative
Looking forward for more such incredible content from you
Thank you again for sharing your knowledge
Hi you should turn off Auto Focus on Camera. Fix Focus manually. Focus is jumping in the video at 1.41 and 1.56 camera function defocus. Use a Black body pen. The camera AUTO focus disturbs the Aperture also.
I have been searching for these answers for 3 years. This was the best explanation. Thank you so much.
Glad it gave you value 🙏🏻
Great explanation Rajath ! Thanks for the video :)
A little correction X value should be 989 shares in place of 1000 shares !
It is 98.9
Correct it comes 989
I was confused . 1000 share kaise mere 989 aa rahe h
Yep I calculated too 989 or 990
Excellently explained. I warched this video completely from starting to end.
Hi Syed, glad you liked the video and I hope it added value.
Perfect brother! With one video, all my dots are connected. Thank you so much !
Its basic and theoretical. Now i request to make video on practical basis . It will rock for sure.
You should compute the total outstanding shares first after the dilution. Total Outstanding Shares = 5000 / (0.455) = 10,989 So the 9% is 10,989-10,000=989 .. The company creates 989 new shares
Sir apni english thodi week h.. But aapne itne achhe se sumjhaya ki samajh aa gyi...kisi hindi video me itni information nhi.. Mai 2 din se search kr raha tha...
Thank you so much 👍
Best explanation. You are a great teacher .
Honest attempt to educate . People watch propaganda videos but not genuine like yours .
Excellent video. After watching multiple video got the clarity on shares.
Glad you liked it and found value :)
Simply superb and simplified explanation ........best ive found till now!!! Thank u brother...🎊🎉👍
🙏🏻
It's really awesome.... Thank you for explaining this all method.
Great explanation... its solved my my problems and given me too much knowledge to run my new startup. Thanks friend.
I really needed this clarity from long time. Thank you so much sir. You are absolutely correct why should one waste time and make things complicate for onself after all this so easy . !!!
Great help! Lots of foggy concepts got cleared.. thanks!
Thanku. Best video for me.
Content is very good and clear . Extremely useful .
🙏🏻
thankyou for the efforts rajat ji
Honestly, 🔥🔥🔥You are the only person in a TH-cam platform Teaching these kinds of stuffs in understandable manner in English.
Sir I have doubts
1) what if 2nd investor came later to invest? Does the company valuation will be same or I can increase the valuation of a company?
2)And what does that valuation of company means?. Does valuation is the price of company if any want
to acquire
3)What if a cofounder has a stake of 20%. And the company has the money of 20 lakhs. And after some traction investor invested 1cr at 20% dilution.
Does the cofounder has the rights in 20% of 20 lakhs (or) 20% of 1.2cr. (Or) 20% of 5cr?
Thank you👏👏
Glad you liked it :)
Answers to your questions:
1) Upto you and you negotiation with the investors. You can increase, decrease or keep the same.
2) it's simple. That's the value of your company. If someone buys your company in a cash deal, you will get that much money. But then, someone should agree to buy it.
3) 20% of 5cr
Where 5cr came ?plz explain
@@martialukail13 Valuation of the company = 1cr / 20% = 5cr
Content hai bhai content hai....Thank you sir.
Sir u make osm video. I understood more then my school and clg lecture.
🙏🏻
Best explanation, Please add more video on this topics
Come here as I'm watching shark tank and confuse about everything related to business but I just find it interesting
Good bro. But, C1 and C2 give out 10% share from their total holding ( C1- 8% is 10% of 80% and C2- 2% is 10% of 20%). It wouldn't be 2% or 8% from their holding. Their sharing to 3rd partner would remain same in terms of % but when it comes to propotion it would look less for C2 (which is Y in your calculation).
Bro 10% from their total holding is given by each to C3, not 2% or 8%.
@@awaisbhatti7393 yes bro, same thing I mentioned
🤪 50% deducted with 4.5% is equal to 55.5%??? You made me laugh in the morning! Rajat great job, keep it up bro.
Best explanation simple .....if u teach accounts people will understand non backgroud of accounts same as me required ....
You are a very good mentor 🤩🇧🇩🇧🇩
Only video in youtube explaining all this.
So nicely explained thank-you the entire video was worth watching
A big thank you! 🙏 It'll help me in my startup. ❤
Superb., he made it simple as much as possible ❤❤❤❤❤ Keep it up ❤
Thank you for the concept sir
I learnt with SWAG 🤘
Thank you so much for such valuable information sir. It cleared so many doubts of mine. Looking forward to learning from you in future as well.❣️
Gates remains one of the largest individual shareholders of Microsoft. As of December, he held more than 100 million shares of Microsoft, roughly 1.3 percent of the company's shares. His stock is worth about $16 billion
.
.
. according to this statement bill gates own 100million shares so how can we increase ownership shares
Sir for diluation for a common person the calculation is cumbersome.i make it more easy no need of calculation.if X is having 80% Y is having 20% C is to be given 10% 10%of 80 is 8% 80-8=72%and remaining 10%of 20 is 2%=2% ie 18% total is 72+18+10=100
Nice explanation. Covered this in the latest video :)
Great insight from you sir, this video gave me new insights into the entrepreneurial concepts
Kamaal ka explanation bhai! Thanks a Ton! 🤩
Good and simplistic explained 🙏🙏
🙏🏻
This is one of the very informative videos that I have watched. Great job Rajat!
Awesome video 👍 concepts where explained very clearly.
This is superb teaching.
You make it so easy to understand.
I have a doubt here.
I want to understand the case if one of the co-founders wants to exit the company.
Will he/she able to sell the shares ?
If yes ? who will take the shares ? who will pay for those shares ?
Thanks Dear.... Well Explained
I have also seen the earlier video about company structure, will say, this is one of the best explanation. Sir will you make video on, "if 2,3 investors invest then how would be the calculation??
It is very simple.
If multiple investors are investing at the same time, treat them as one single investor and then calculate by the method in the video.
When you find the value of x this way, distribute it among the investors.
@@rajatyadav800 ok, I got it, thank you Sir
@@rajatyadav800 if our company now have 20cr valuation an how someone investing 12 cr can't control our company
Such a good general knowledge
Amazing
thanks for sharing. I think the below formula will do the same.
c1 = c1% - (c3 * c1%)
c2 = c2% - (c3 * c2%)
Excellent video and explanation Rajat. Thanks for sharing your insights. Please share more and Continue. Subscribed. 👍
Keep on posting sir, Thank you for very information and good for go finance stdents
🙏🏻
Amazing video sir...... I was looking for this video for lot of time
Thanks for Raw Material
the best video of explanation....
very useful ,keep on posting such good content
Sir, thank you for this video. But I have 1 question, how to calculate profile exactly?
Can anyone help with that x/1000+x= 9% equation?
It must be 10000x, right?
X divided by total no. Of shares + x.
Do like if you came here after watching shark tank 🤛
Thank u
मस्त , मजा आ गया
🙏🏻
Thank you for making this so simple!
I was scared. But after i see your vdo it's easy
Thank you So much🔥 you have done a great job, this video was very helpful 😉
THAT,S A AMAZING VIDEO YOU HAVE CREATED.THANK YOU.
well done Rajath. Nice work.
the total number of share is 10,000 if that is so, i realize that calculation has 1,000 + x, instead of 10,000 + x !!!
Thanks sir, neat and clean explaining
THANKS A LOT SIR
TUTORIAL REALLY VERY HELPFUL
C1 10% of 80 = 8 and C2 10% of 20 = 2 so Y gets 8+2 =10 and C1 now has 72 & C2 has 12. It’s that simple bro without 😂 equations
C2 has 18
@@RealTraderScalper usne vi too wahi bolaaa 😂
Yeah that's the one
It's a simple calculation is 80 and 20 is 4:1 and 10% is diveded as 8% and 2%
Bro awesome thanks for sharing knowledge you are doing great job ☺️
🙏🏻
Good explanation
Gr8 job rajat
Explained in a simple way.Thanks a lot 😊
Very well explained. Thanks a lot
Thanks 👍
Company cash vs company evaluation is different owner has invested 1lac investor has invested 10lac now evaluation is 1.1 crore but who will give that extra money?