We have all reached a point where we run out of cash. We are presented with a few options. Going to the bank or issuing shares are the most common options to take. But what do you do with your CEO Money then?
Capitalism Lab CEO Money is just there for being there. You may become the richest player in the world and that is the end of it. So why not help your company when you need quick injection of money?
It’s a very simple trick, when your company goes broke, you issue shares. This increases the number of shares available therefore automatically making you lose the % of shares you own of your company. However, the trick is to dilute it to how much your CEO has.
By issuing shares of the amount very close to your CEO Money, you simply buy the shares from the public using your CEO Money. Chances are you might get a bigger portion of your company’s shares too! So it is almost like you transferred your own money to your corporation while getting a larger share of the ownership.
If you have seen my Real Estate Mogul Scenario Series, you may have seen me do this trick.
Lessons learned when using CEO Money:
1. Pretend your CEO is your savings account
By paying your CEO money, you set aside cash for future use or when you really need it. If your CEO now has $50m sitting, you can always issue shares for $50m and buy them back using your CEO and expand using that money.
2. Issuing shares lowers your share price
By lowering your share price, you now have the ability to buy more of the ownership than before. This trick may be very handy when you are about to lose ownership and the other shareholders are selling you their stocks for double the price. Issue some shares and buy them using your CEO money and now you automatically own more of the company.
3. Invest in stock market using CEO Money
At the start of the game, if you don’t need the $1m, simply invest it into a company and you might end up with a good sum when a rainy day does eventually come. That will allow you to raise more funds without losing ownership for your company.
What do you think? Leave a comment below 🙂