Cofounder Preferred Stock Sales 
Steve Blank
OCTOBER 24, 2017
Why do these founders get to stay around? Because the balance of power has dramatically shifted from investors to founders. VCs competing for unicorn investments have given founders control of the board. A pre-IPO board usually had two founders, two VCs and one “independent” member. Hire a CEO to Go Public.
Startup Professionals Musings
SEPTEMBER 27, 2023
Even though initial stock has no value or market, it is extremely valuable in dividing entity ownership between multiple co-founders, commensurate with their investment, contribution and role. Make sure the government waits for a stock sale to collect taxes. Key founder vesting should have no cliff.
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Startup Professionals Musings
JANUARY 15, 2021
Even though initial stock has no value or market, it is extremely valuable in dividing entity ownership between multiple co-founders, commensurate with their investment, contribution and role. Make sure the government waits for a stock sale to collect taxes. Key founder vesting should have no cliff.
YoungUpstarts
AUGUST 25, 2015
Owners of corporations also pay taxes when they are paid dividends or profit from sale of the stock, which is why it is common to say that corporations are “double-taxed.” Stocks are issued at the time the company is formed, and more can be issued over time. When an LLC allocates income to owners (i.e. Verdict : Corporation.
Lightspeed Venture Partners
OCTOBER 7, 2012
Week three’s breakdown covered topics like how hard momentum is to turn around, and how participating preferred stock works. The founders were very sympathetic; a man, laid off from his job, and his very pregnant wife, who sold their house and investing $150k into the business and are working hard to make a go of it.
Startup Professionals Musings
FEBRUARY 8, 2019
To avoid the tax implications of co-mingling personal and business funds and assets, create your business entity before you hire anyone or spend money building the product. File founder stock election so no taxes are due until exit. Additionally, I recommend that you review and update co-founder ownership agreements annually.
Up and Running
MAY 23, 2016
“If you can fix a problem for someone and do it better, quicker, and/or cheaper than your competitor, you’re off to a good start.” – Gabriel Kuperman, founder and CEO of CuePin. We created UpKeep to fill this void—a cloud-based solution that was affordable for any size business.” – Ryan Chan, founder of UpKeep.
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