Agile VC

APRIL 17, 2011

AGILEVC My idle thoughts on tech startups. 5) High Productivity: Kayak had 148 employees at the end of 2010. That means that Kayak generates roughly $1.15M in revenue for each employee which puts it in the same league as Google and Apple (both >$1M/head). How to Evaluate Firms for a Seed VC. How To Think About The Future.

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

The Next Web

JUNE 15, 2012

From Silicon Valley to Peoria, Illinois, cash-strapped startups look for inventive way to finance their business – often handing out equity to employees, consultants, vendors, and other service providers. Speed is often of the essence early on in the startup lifecycle, and that often means rushing into casual arrangements.

Equity 116

Equity Stock Options Vesting Stock 116

Up and Running

SEPTEMBER 19, 2017

Capital investments are like gasoline on a startup business’s metaphorical fire. If you’re like most startup CEOs, your startup has been your personal fiefdom and baby. Background: Justin Klemm’s analytics and website uptime startup, Ghost Inspector , wants to revolutionize the way businesses manage their ecommerce funnels.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

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. and start negotiating with them.

Vesting 89

Vesting Software Review IP Intellectual Property 89

www.paulgraham.com

APRIL 28, 2010

Want to start a startup? A typical startup goes throughseveral rounds of funding, and at each round you want to take justenough money to reach the speed where you can shift into the nextgear. Few startups get it quite right. 1 ] A startups life will be more complicated, legally, if any of theinvestors arent accredited.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Up and Running

DECEMBER 1, 2015

If you’re thinking about extending equity to an employee or a vendor (as in the example above), you should know that the topic is multi-faceted. If however you are giving a “normal employee” an incentive stock option plan (more on that later), that’s entirely different. Finding great employees first.

Equity 60

Equity Employee Stock Options Vesting 60

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. Vesting always stops when an employee leaves the company. Stock dilution control.

Vesting 245

Vesting Common Stock Stock Founder Vesting 245

Steve Blank

APRIL 26, 2022

At the turn of the century after the dotcom crash, startup valuations plummeted, burn rates were unsustainable, and startups were quickly running out of cash. They offered desperate founders more cash but insisted on new terms, rewriting all the old stock agreements that previous investors and employees had. You’re not.

Cram Down 417

Cram Down Founder Venture Capital Recapitalization 417

View from Seed

DECEMBER 4, 2014

Editor’s note: Understanding how to divide founder equity at a startup can be tricky, even to the point of reaching emotional riffs between founders. Across both the startups I’ve personally been involved in (PayPal and LinkedIn) and the startups in which I’ve been an investor, I’ve seen a broad range of co-founder equity splits.

Equity 315

Equity Founder Sweat Equity Cofounder 315

Both Sides of the Table

MARCH 21, 2010

This is part of my ongoing series on Startup Advice. As startup entrepreneurs we all want to work with them because having their name as reference clients makes it so much easier for marketing, PR, selling to other customers, fund raising and even recruiting. Think of it as similar to an employee stock option.

Warrant 298

Warrant Dilution Startup Stock Options 298

keen.io

FEBRUARY 5, 2013

How I negotiated my startup compensation. When I started thinking about joining Keen, I quickly realized there is a lot I don’t know about startups. For example: Don’t accept equity compensation (stock shares) without knowing the percentage of the company you’ll own. I knew enough to know I wanted to join a startup.

Salary 50

Salary Equity Startup San Francisco 50

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. Vesting always stops when an employee leaves the company. Stock dilution control.

Stock 256

Stock Vesting Common Stock Founder Vesting 256

Agile VC

DECEMBER 4, 2014

Across both the startups I’ve personally been involved in (PayPal and LinkedIn) and the startups in which I’ve been an investor, I’ve seen a broad range of co-founder equity splits. You can then work with your law firm to formally draw up founder common stock paperwork either then or subsequently.

Cofounder 255

Cofounder Equity Founder Sweat Equity 255

Both Sides of the Table

MAY 13, 2013

For the past 5 years or so Google, Facebook and a handful of tech industry giants have been quietly buying scores of early-stage startups for their talent. A couple of tech giants throw millions around in either cash (for which they have hoards) or part with some publicly traded stock. Go do a startup. And who cares, right?

Liquidation Preference 357

Liquidation Preference Early Stage Retention Lock-up Period 357

Scott Edward Walker

NOVEMBER 22, 2015

For many startups, intellectual property (IP) is their most valuable asset. Below are the three most common IP-related mistakes that startups make — the first of which I discuss in this brief video with Jason Calacanis. This is a particular concern if the startup is in the same space as a founder’s prior employer.

IP 40

IP Software Review Due Diligence Intellectual Property 40

Both Sides of the Table

SEPTEMBER 18, 2014

Less than you’ll probably grant your most junior employees in stock options? 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. Startup Lessons' Him: Not so good. Obviously he’d be pissed off. Me: I know.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Startup Professionals Musings

OCTOBER 7, 2010

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. Vesting always stops when an employee leaves the company. Stock survives investment.

Stock 214

Stock Vesting Common Stock Founder Vesting 214

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

Tim Keane

JANUARY 12, 2010

Startups and angels: Along the way to success. These include: ·       Vesting of Founder Stock. Especially in situations where the founders have a large position and are key employees, it is not uncommon for investors to request that they agree to have some portion of their holdings vest on a schedule.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Scott Edward Walker

OCTOBER 19, 2020

Over the past six months, my firm has been engaged by a number of startups with significant intellectual property (“IP”) problems. The purpose of this blog post is to briefly discuss the three most common IP mistakes that startups make. working on the startup) while employed. Introduction. code, designs, logo, etc.)

IP 40

IP Software Review Founder Technical Review 40

Gust

MARCH 16, 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. Vesting always stops when an employee leaves the company. Stock dilution control.

Stock 175

Stock Vesting Common Stock Founder Vesting 175

www.inc.com

SEPTEMBER 24, 2011

Advisor. ); STARTUP. Employee Benefits. Jumpstart wasnt much at the time, just four employees working from home offices. But as Arizona Bay grew--it now has 40 employees and more than a dozen clients--Graham began to worry that he was missing out. Entrepreneur news from reporter Eric Markowitz. Email address: Home.

Arizona 40

Arizona Equity Iowa Venture Capital 40

Agile VC

DECEMBER 4, 2014

Across both the startups I’ve personally been involved in (PayPal and LinkedIn) and the startups in which I’ve been an investor, I’ve seen a broad range of co-founder equity splits. You can then work with your law firm to formally draw up founder common stock paperwork either then or subsequently.

Cofounder 173

Cofounder Equity Founder Sweat Equity 173

venturehacks.com

MARCH 21, 2008

Venture Hacks Good advice for startups. Super advisors The super advisor can get as much stock as a board member: 1%-2% of a company’s post-Series A stock. Or they bring you a handful of great employees. Advisory shares are normal common stock. Disclaimer: This is not legal advice.

Advisory Board 44

Advisory Board Cap Table Vesting Equity 44

ReadWriteStart

JANUARY 28, 2022

With the rise of startups and growing businesses , it has become more critical for investors to have a thorough understanding of equity to be aware of all of the advantages they are receiving from the companies they have invested in. Common stock. The holding of common stock in a company indicates ownership in the corporation.

Valuation 108

Valuation Equity Warrant Common Stock 108

Gust

JUNE 7, 2014

So, here is the typical payout order, from first to last: 1) Salaries owed to employees. 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.

Warrant 157

Warrant Preferred Stock Early Stage Common Stock 157

www.mattbartus.com

SEPTEMBER 24, 2011

Perspectives on issues affecting founders, startups and investors from a veteran startup lawyer in Silicon Valley. People tend to underestimate how much record keeping is involved with managing employees and consultants, and this just adds an unacceptable extra burden. I have moved my startup practice to Cooley from Dorsey.

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

Startup Company Lawyer

MAY 4, 2009

The driving beliefs behind the Institute are that (1) great founders are often overlooked by the current entrepreneurial ecosystem, and that (2) innovative startups have a dramatic positive effect on the global economy. Description: How to set-up the right company structure to attract great employees and investors. Incorporation.

Founder 28

Founder Warrant San Francisco Intellectual Property 28

www.payne.org

SEPTEMBER 22, 2011

Startup Equity For Employees. 2 Stock Classes: Common and Preferred. 5 Stock vs Options. 6 Founders / Restricted Stock. Important disclaimer: Ive got experience negotiating stock compensation packages from both sides of the table. Stock Classes: Common and Preferred. From Payne.org Wiki.

Equity 56

Equity Employee Vesting Preferred Stock 56

K9 Ventures

NOVEMBER 21, 2011

Let’s say you’re the founder (I use a solo-founder in my example to keep things simple, but this could just as well apply to a founding team) of a startup called Blood, Sweat and Tears, Inc. They want to keep the founders “all-in” in the startup, because they feel that otherwise the founders won’t be motivated enough.

Founder 87

Founder Common Stock Preferred Stock Stock 87

K9 Ventures

NOVEMBER 21, 2011

Let’s say you’re the founder (I use a solo-founder in my example to keep things simple, but this could just as well apply to a founding team) of a startup called Blood, Sweat and Tears, Inc. They want to keep the founders “all-in” in the startup, because they feel that otherwise the founders won’t be motivated enough.

Founder 84

Founder Common Stock Preferred Stock Stock 84

Gust

JULY 23, 2012

Donations of private stock enable investors, founders and employees to support charitable causes and contribute to the community while receiving simultaneous benefits in the form of substantial cash savings from reduced taxes as well as bypassing capital gains taxes. Q: How does the tax deduction work?

Stock 114

Stock Capital Gains Warrant Stock Options 114

Gust

DECEMBER 8, 2011

In Part I , I gave a quick summary of the who, when and why of forming and documenting a new startup company. This week we’ll delve into what , exactly, is necessary or desirable to lay a solid legal foundation for a startup to build upon. Make escrow arrangements for restricted stock (i.e., Newco, Inc.”) Yes, it’s a mouthful.

Intellectual Property 139

Intellectual Property Non-disclosure Agreement Delaware Stock 139

Austin Startup

JULY 22, 2021

On October 4th, five technology startup finalists will pitch to a panel of advisors and judges made up of successful investors, entrepreneurs, and industry leaders. Any software, hardware, or CPG startup in Texas with a female founder or co-founder can apply to participate. Startups, submit your application now! Who Can Apply?

San Antonio 107

San Antonio Dallas Houston Founder 107

Up and Running

SEPTEMBER 20, 2021

Since almost all startups do not possess traditional debt lenders, the list usually consists of data of the shareholders and the percentage they own. Furthermore, there are various forms of equity, such as preferred stock, common stock, and convertible notes, which influence the present and potential future investors.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

Haystack

JULY 8, 2018

And with this, every year, a new cohort enters into the “tech startup” world, and there’s no official canon to read, no “one-stop shopping” site or user manual to get briefed on the things you absolutely need to know. You can read more about the types of stock granted in startups here.

Early Stage 95

Early Stage Dilution Private Equity Equity 95

Growthink Blog

APRIL 7, 2010

The name "Series A" refers to the class of preferred stock that you sell to investors in return for their cash. Your Series A round is typically the first series of stock issued after common stock (which is typically issued and/or sold to company founders, employees, friends and family, and initial angel investors).

Angel Investor 54

Angel Investor Preferred Stock Common Stock Venture Capital 54