start up capital should i sell private shares?

[imark7]

I need to get start up Capital for a new software development project.
I am wondering if it is best to give up a percentage of the business to the investor or is it better to incorporate and sell shares privately?

Does any one know the best course of action?

 

[oldman9]

I am wondering if it is best to give up a percentage of the business to the investor or is it better to incorporate and sell shares privately? Does any one know the best course of action?

This is a *business* question, not a legal question.

There is no "best course of action." It all depends on what you want to achieve.

Generally, if you put out your hand asking for money, you will have to give up SOMETHING in return, either CONTROL or OWNERSHIP, or both. You have to decide which you want to give up. Then, MAKE SURE that there are agreements set up so that all parties know what their responsibilities and limits are.

BTW, your two choices ("to give up a percentage of the business" and "to incorporate and sell shares privately") are the same!

 

[DStaub]

As oldman9 points out, selling shares IS giving up a percentage of the business. Before you do anything else, if you don't understand basic corporate financial issues, you need to get a good attorney and a good accountant. Otherwise, before you know it your software development project will not be yours any longer.