Capitalization Matters

Cite this article as: Jason Mance Gordon, "Capitalization Matters," in The Business Professor, updated March 14, 2015, last accessed April 8, 2020,

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Capitalization Matters

Capitalization is the funding of the business venture. A startup will be capitalized by contributions from founders. In exchange for contributed value (funds or assets) the founders will receive shares of the corporation. The corporation should follow the following steps regarding capitalization:

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