5-share companies

So, if I don’t want incremental capitalisation, and would like companies to start with just a small number of shares in play, but don’t want to make asset stripping too easy, what mechanisms are still available?

One approach that might work is if companies start with just 5 shares apiece, each share representing 20% of the company. This is a mechanism that David Hecht has used in several of his games. The director’s certificate will be 40% of the company and the company will begin with half its full capital.

The distribution of shares is the same as the minor companies in 1825, but these 5-share companies are allowed to morph into 10-share companies at a later stage of the game. This “growing up” gives them an extra tranche of capital and each share becomes worth 10% of the company, therefore giving less income.. The conditions and mechanisms for this will need to be developed. In 18Ardennes, the only one of David Hecht’s games that I’ve played, the director can choose to convert the company during its turn. Some of David’s games require a company to have reached a certain destination city before they can convert.

A disadvantage of this mechanism is that it can reduce the need to withhold dividends, thus making things easier for the director. An advantage is that it could encourage more diverse shareholdings, because the director need only buy 3 shares to start the company, with another 2 available immediately and 5 more appearing if the company converts to 10 shares.