When a company founder sells stock to outside investors in order to raise capital, the share of the company owned by the founder and the founder's control over the company will be reduced.

Question

Quizplus · Accepted Answer

When outside investors buy stock in a company, they become part owners and have a say in the company's decision-making process. As a result, the founder's portion of ownership decreases along with their control over the company.

When a Company Founder Sells Stock to Outside Investors in Order