We can replace some of the engineers income with company equity ie: shares of the company. This way we don't have to take out as large loans, but we have to give up a certain percentage of the company. This can be done via share transfer or share dilution.
Share transfer is easiest to understand. You give up x% of your company and give it to the other entity.
Share dilution is trickier. Basically you create additional shares out of thin air, and give them to the other entity. This reduces the value of each share, as there's a greater number of shares representing the same company.
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We can replace some of the engineers income with company equity ie: shares of the company. This way we don't have to take out as large loans, but we have to give up a certain percentage of the company. This can be done via share transfer or share dilution.
Share transfer is easiest to understand. You give up x% of your company and give it to the other entity.
Share dilution is trickier. Basically you create additional shares out of thin air, and give them to the other entity. This reduces the value of each share, as there's a greater number of shares representing the same company.