Cap table basics
What is Par Value?
The nominal legal price assigned to a share at incorporation - typically $0.0001 - used for the minimum purchase price of founder stock.
Par value is a vestigial legal concept that establishes the floor purchase price for shares. For a Delaware C-corp, par is conventionally $0.0001 per share. Founders pay par × their share count to purchase their founder stock (e.g., $600 for 6,000,000 shares). The IRS requires real consideration for stock issuance; par value is the cheapest legally defensible amount. Par value is unrelated to fair market value once the company has any traction.
Example
- Founder issued 6,000,000 shares at $0.0001 par = $600 purchase price, paid by personal check, with receipt retained.