Gust

MAY 24, 2012

As a quick review, most startups begin life as corporations with a single class of equity securities, referred to as Common Stock , issued to founders, employees, and outside service providers. Options and warrants, when issued, are also typically exercisable for shares of Common Stock.

IPO 159

IPO Equity Common Stock Stock 159

Feld Thoughts

OCTOBER 7, 2013

This check is for The Community Foundation and for the Entrepreneurs Foundation of Colorado (EFCO) and results from a gift of 24,793 shares of common stock from Rally at the time of its first financing that represented approximately 1% of the equity of the company. I remember numerous conversations with Ryan about this.

Community 182

Community Colorado Common Stock Equity 182

Startup Professionals Musings

SEPTEMBER 27, 2023

When an entrepreneur first incorporates a business, they may find themselves the proud owner of 10 million shares of common stock, commonly called founder’s shares.

Stock 240

Stock .Net Vesting Founder Vesting 240

Gust

NOVEMBER 28, 2023

Over the past 20 years, the typical structure for seed/angel deals has shifted from common stock (in the mid-1990s) to convertible notes (late 1990s through early 2000s) to full Series A convertible preferred (mid-2000s) to convertible notes with a cap (late 2000s) to Series Seed convertible preferred or similar (present).

Due Diligence 91

Due Diligence Term Sheet Common Stock Stock 91

David Teten

JANUARY 19, 2021

Eligible for favorable treatment under Qualified Small Business Stock exemption, if structured as equity. This applies if the investment converts into common stock; details are beyond this essay’s scope. Typically promissory note or non-voting common stock, with covenants. Founder retains control. Governance.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

ReadWriteStart

JANUARY 28, 2022

Common stock. The holding of common stock in a company indicates ownership in the corporation. Investors of common stock are eligible for : The choice of the Board of Directors. However, the holder of a warrant holds a leveraged bet on the corporation’s common shares. Preferred shares.

Valuation 108

Valuation Equity Warrant Common Stock 108

Feld Thoughts

JUNE 11, 2021

We didn’t have any financing except for Brad’s credit card and the $10 with which we had purchased our common stock. We employed half a dozen programmers, most of whom were undergraduates from our fraternity working part-time. Dave walked into Brad’s office after calculating preliminary financial results for January.

Common Stock 70

Common Stock Europe Boston Software Developers 70

Startup Professionals Musings

JANUARY 15, 2021

When an entrepreneur first incorporates a business, they may find themselves the proud owner of 10 million shares of common stock, commonly called founder’s shares.

Vesting 298

Vesting Dilution Stock Founder Vesting 298

View from Seed

DECEMBER 4, 2014

You can then work with your law firm to formally draw up founder common stock paperwork either then or subsequently. It’s also worth keeping in mind that regardless of how the founders’ common stock is divided, there will be future issuance of stock that will dilute the founders over the lifecycle of the company.

Equity 315

Equity Founder Sweat Equity Cofounder 315

Agile VC

APRIL 17, 2011

Interesting to note that Hafner and English own common stock but also made meaningful investments in the Series A & B rounds. Notes: In an IPO preferred share classes are converted into common stock, and liquidation preferences and accumulated but unpaid dividends essentially go away. as of 12/31/09).

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

VC Adventure

AUGUST 15, 2018

Most boards did some level of work to determine the FMV of a company’s stock but generally options were priced between 10% and 15% of a company’s then preferred price (because common equity sits behind preferred equity there is typically a discount applied to the FMV of common stock to account for this “overhang”).

Valuation 48

Valuation Common Stock Cap Table Software Review 48

Growthink Blog

JANUARY 24, 2011

The question is whether they need to issue common or preferred stock. The answer depends on how and what rights are defined in the preferred stock. One very popular "preferred right" or "preference" that adds very significant value to outside investors and is common in venture capital investments is a liquidation preference.

Preferred Stock 93

Preferred Stock Stock Common Stock Liquidation Preference 93

Startup Company Lawyer

APRIL 23, 2009

These provisions include a special class of super-voting common stock, called “Class F&# common stock, which is named for “Founders.&#. The COI includes Class A common stock, which has one vote per share, and Class F common stock, which has 10 votes per share. Protective provisions.

Common Stock 33

Common Stock Stock Dividend Delaware 33

Both Sides of the Table

FEBRUARY 20, 2019

If angel investors are pressuring you to set up a board and if you don’t have the leverage to push back a little then I might suggest a 3-person board in which all 3 seats are appointed by the common stock and you agree to appoint one of these seats to the angel investor but perhaps make it either time based or event based.

Venture Capital 236

Venture Capital Startup Angel Investor Silicon Valley 236

Agile VC

DECEMBER 4, 2014

You can then work with your law firm to formally draw up founder common stock paperwork either then or subsequently. It’s also worth keeping in mind that regardless of how the founders’ common stock is divided, there will be future issuance of stock that will dilute the founders over the lifecycle of the company.

Cofounder 255

Cofounder Equity Founder Sweat Equity 255

Both Sides of the Table

MAY 27, 2013

In addition to helping manage the board Chris also helps represent the interests of the angel investors / common stock holders. And then there is the one true gentleman of the bunch – Chris Smart, who is non-exec chairman. That in itself is quite a challenge.

Advisory Board 365

Advisory Board Fractional CTO CTO Hire Los Angeles 365

Feld Thoughts

DECEMBER 28, 2011

If accepted, each company will receive an equity investment of $20,000 in exchange for six percent of the company in common stock, which will be held by TechStars. Microsoft’s Kinect Accelerator is powered by TechStars and applications for the Kinect Accelerator are now being accepted through January 25, 2012.

Intellectual Property 134

Intellectual Property Common Stock Seattle Cofounder 134

Steve Blank

APRIL 26, 2022

Some even insisted that all prior preferred stock had to be converted to common stock. For existing investors, sometimes it was a “pay-to-play” i.e. if you don’t participate in the new financing you lose. Other times it was simply a take-it-or-leave-it, here are the new terms.

Cram Down 417

Cram Down Founder Venture Capital Recapitalization 417

Up and Running

AUGUST 28, 2019

This article will not delve into the more complex options and requirements for a corporation’s stock. You can read further about the details of preferred stock versus common stock Classes A and B. . Most small businesses will be fine sticking to small numbers of common stock only.

Delaware 83

Delaware Stock Nevada Technical Review 83

YoungUpstarts

AUGUST 25, 2015

Typically, investors will be interested in “preferred” stock, which comes with special (aka “preferred”) rights, such as receiving a certain payout before anyone who holds “common” stock. The ownership structure of an LLC is a blank slate.

LLC 100

LLC Technical Review Software Review Limited Liability Company 100

Agile VC

DECEMBER 4, 2014

You can then work with your law firm to formally draw up founder common stock paperwork either then or subsequently. It’s also worth keeping in mind that regardless of how the founders’ common stock is divided, there will be future issuance of stock that will dilute the founders over the lifecycle of the company.

Cofounder 173

Cofounder Equity Founder Sweat Equity 173

Berkonomics

MAY 23, 2024

The option price should be set by appraisal under IRS rule 409a, and certainly should be low enough to recognize that common stock options are not worth as much as preferred stock, given the many preferences of the latter. How do you set the option price?

Early Stage 62

Early Stage Vesting Stock Options Preferred Stock 62

OnlyOnce

FEBRUARY 1, 2024

But think of it as a tool in the M&A/financing tool belt.

Cap Table 71

Cap Table Common Stock Acquisition Stock 71

Startup Professionals Musings

MARCH 23, 2014

In reality, so-called “Founder’s” shares are simply common stock, issued at the time of startup incorporation, for a very low price, and normally allocated to the multiple initial players commensurate with their investment or role. Here are some typical special terms and considerations for Founder’s stock: Negligible real value.

Stock 256

Stock Vesting Common Stock Founder Vesting 256

Scott Edward Walker

OCTOBER 19, 2020

Usually this is done as part of the founder’s Restricted Stock Purchase Agreement pursuant to which the IP is contributed to the startup as full or partial consideration for the shares of common stock issued to him in a tax-free transaction under Section 351 of the Internal Revenue Code.

IP 52

IP Software Review Founder Technical Review 52

Scott Edward Walker

SEPTEMBER 28, 2011

Indeed, you must make sure that all of the shares of common stock issued by the corporation to the founders are subject to vesting restrictions – which means that ownership of the shares would vest over time (instead of all of the shares being owned outright on day one). Vesting Restrictions.

Vesting 89

Vesting Software Review IP Intellectual Property 89

The Next Web

JUNE 15, 2012

By linking number of shares to hours worked or other quantifiable measures, you run the risk of establishing the price per share of your common stock or options. But beyond motivation, there are more pragmatic factors at play here too. Don’t jeopardize your S Corporation status.

Equity 116

Equity Stock Options Vesting Stock 116

Startup Professionals Musings

JANUARY 22, 2013

In reality, so-called “founder’s” shares are simply common stock, issued at the time of startup incorporation, for a very low price, and normally allocated to the multiple initial players commensurate with their investment or role. Here are some typical special terms and considerations for founder’s stock: Negligible real value.

Vesting 245

Vesting Common Stock Stock Founder Vesting 245

Both Sides of the Table

JULY 29, 2010

The downside is that people need to buy their stock. I talked also about 409a valuations and why common stock purchases cost less than preferred stock purchases. But if you do this early (pre VC) then the price points are pretty low. Do it early.

Venture Capital 282

Venture Capital Term Sheet Valuation Stock Options 282

Gust

JUNE 7, 2014

5) Senior Preferred Stock and warrants. 7) Junior Preferred Stock and warrants. 9) Common Stock (including any Preferred that converted to Common, any exercised options, and all Founders stock) and Common stock warrants. 2) Secured creditors. 3) Un-secured trade creditors.

Warrant 157

Warrant Preferred Stock Early Stage Common Stock 157

The Startup Magazine

NOVEMBER 14, 2018

Stock Options. Investing in stocks is another alternative to generate additional income streams. Choosing a common stock to invest in requires little to no experience even if you have not invested in stocks in the past. Common stocks provide you with a percentage of ownership in a company or entity.

Common Stock 103

Common Stock Stock Stock Options Startup 103

YoungUpstarts

AUGUST 14, 2019

Common Stock Trading Strategies. The following are some common stock trading strategies. The only way to stick to your plan is by developing an elaborate trading strategy. Follow your plan to the letter. Don’t be obsessed with chasing those profits. Don’t let emotions ruin your trading strategy.

Stock 113

Stock Common Stock Exit Strategy Marketing 113

Both Sides of the Table

JULY 22, 2010

This means that participation truly only applies in downside scenarios and once your exit outcome is above a certain price investors would still be better off converting to common stock and not taking their preference.

Valuation 405

Valuation Liquidation Preference Pre-Money Valuation Term Sheet 405

YoungUpstarts

JANUARY 16, 2020

Investing in stocks carries higher risks than other investments, but it also gives large rewards. Shareholders also get dividends through some stocks. There are two types of stocks. Mutual funds.

Dividend 147

Dividend Stock Common Stock Capital Gains 147

ReadWriteStart

JUNE 1, 2020

The shares given out can either be common stocks or preferred stocks. ? Debt investment. Equity investment is the most popular and most talked-about avenue for startup funding. These investments are made instead of shares or equity in your startup. Debt investment would have a repayment timeline and incur interest rates.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

Startup Professionals Musings

MAY 18, 2015

When an entrepreneur first incorporates his or her business, he or she may find him or herself the proud owner of 10 million shares of common stock, commonly called founder’s shares.

Stock 120

Stock Vesting Common Stock Founder Vesting 120

Both Sides of the Table

SEPTEMBER 18, 2014

If you want to give them a 50% discount offer them $1 of common-stock warrants (no liquidation preference) for every $1 of stock they buy. If you want to give them a 33% discount you offer them half of a $1 common-stock warrant for every $1 share they purchase. ” Simple. And so forth.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417