Later funding partner admitted – reorganisation of share capital
External funding may only be sought or available when a spin-out has been running for some time. Such a later funding partner may take an equity stake. There may be a reorganisation of share capital with additional shares issued to both the Research Institution and the researchers, as well as the new investor.
Such funding coming in later will be a normal commercial transaction. If additional shares are issued these will be pro-rata to existing holdings, so any benefit to existing shareholders will be balanced by their reduction in value of additional shares already held.