Silicon Valley Business School
Structure New Ownership & Control
A Step in a Management Maneuver in the Mezzanine Stage of Startup Development

Structuring new ownership and control is a step in the process of restarting the business. When the Company has stalled or entered a significant decline, restructuring is often necessary to ignite momentum. In some cases, the restructuring is undertaken under the protection of a Chapter 11 bankruptcy filing. In other cases, the shareholders, board of directors and management voluntarily agree to a restructuring that involves cramming down the shareholders, allocating new stock to the team members that are necessary to drive the Company toward success, and renegotiating debt repayment terms. Control and management of the Company is often reorganized in these maneuvers, with changes in voting powers of the shareholders, changes in the board of directors and changes in the management team, with new officers being appointed and power shifted in favor of the team that will be executing the new business strategy.

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