Back Issues Letters to the Ed. To begin with, we should expand on the problems resulting from too few shares. First, the high per-share price means that only large institutional investors can afford the company's shares.
Individuals have no opportunity to become shareholders.
Most founders of venture companies are more democratic and would prefer a wider share ownership. Second, without enough shares, liquidity is a serious problem. Without liquidity, the share price is too volatile and unreliable. Spread over the minimum 300 shareholders, this is only three to four shares per shareholder. Many shareholders probably own only one share, and won't sell it.