ReadWriteStart

JANUARY 28, 2022

The market regards equity as an ownership “share” in a corporation’s income revenue stream. 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.

Valuation 108

Valuation Equity Warrant Common Stock 108

ReadWriteStart

JUNE 1, 2020

The primary source of your funds should be your paying customers, i.e., your business should generate enough revenues and profits to fund the growth and expansion. The shares given out can either be common stocks or preferred stocks. ? Debt investment. Then we have startup platforms like incubators and accelerators.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

Scott Edward Walker

OCTOBER 19, 2020

The nightmare scenario for founders is that they are heads-down and working on their startup for a number of years and finally get some headlines on a successful financing or exit. Then the prior employer rears its ugly head and claims that it actually owns the startup’s IP. Moreover, the IP creation and assignment is forward-looking. .

IP 52

IP Software Review Founder Technical Review 52

Both Sides of the Table

SEPTEMBER 18, 2014

It’s like we need a finance 101 course for entrepreneurs. Revenue multiple? In finance they call it “terminal value” but the truth is the price is as arbitrary at your A round as it is at your seed round. Convertible notes have both features in them but for some reason entrepreneurs don’t understand it.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Both Sides of the Table

JULY 29, 2010

People buy companies for 3 primary reasons: 1) they want the management team / talent 2) they want the technology or 3) they want the market traction (revenue, customer base, profits, etc). The downside is that people need to buy their stock. In fact, far better if you haven’t raised venture capital. Do it early.

Venture Capital 282

Venture Capital Term Sheet Valuation Stock Options 282

Gust

OCTOBER 12, 2011

Last week , we took the plunge and began dissecting an example term sheet for a convertible debt financing round piece by piece. In Part II, we looked at the mandatory conversion language that is at the heart of any convertible debt financing. First, a word about the maturity date.

Finance 107

Finance Term Sheet Pre-Money Valuation Early Stage 107

www.inc.com

SEPTEMBER 24, 2011

Finance | Tuesdays. Financing a Small Business. Financing A Small Business. Personal Finance. Because many of these businesses dont yet have revenue, valuation discussions arent very scientific, and the process requires some haggling. Arizona Bay has also blended equity payments with revenue-sharing deals.

Arizona 40

Arizona Equity Iowa Venture Capital 40

Scott Edward Walker

NOVEMBER 22, 2015

prior to incorporation is typically assigned to the company as part of the founder’s restricted stock purchase agreement (or a separate assignment agreement). Any IP created or acquired by a founder (e.g., code, a patent, etc.) Moreover, I recently saw this problem in the context of the sale of startup we were representing.

IP 40

IP Software Review Due Diligence Intellectual Property 40

Up and Running

SEPTEMBER 19, 2017

For a business that anticipates needing, for example, $500,000 in startup capital, that means that best-case scenario Klemm can expect to give up half of his business’s common stock (and an even larger percentage of control of the business once the deal’s fine print provisions are considered).

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

Up and Running

SEPTEMBER 20, 2021

Furthermore, there are various forms of equity, such as preferred stock, common stock, and convertible notes, which influence the present and potential future investors. Total share ownership is the sum of the common stock, stock options, preferred stock, and any other stock category for a single individual.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

Both Sides of the Table

APRIL 14, 2010

Liquidation preference is the amount of money that an investor gets paid before the common stock (e.g. It also gets the new investor concerned that management (common stock holders) will not be incentivized because they realize that the investors will take most of the money unless there is a big upside scenario.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Dividend 289

Gust

SEPTEMBER 17, 2014

It’s like we need a finance 101 course for entrepreneurs. Revenue multiple? In finance they call it “terminal value” but the truth is the price is as arbitrary at your A round as it is at your seed round. 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.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Startup Company Lawyer

MAY 4, 2009

If a founder’s company raises more than $50,000 in debt or equity financing, excluding funds from the founder, within 18 months of formation, then the founder must pay a tuition fee of $4,500, which is used to cover the Institute’s expenses in providing the program. What are common planning mistakes and how do you to avoid them?

Founder 28

Founder Warrant San Francisco Intellectual Property 28

Tim Keane

JANUARY 12, 2010

For angel groups, the distinction between groups and VCs on this issue is dwindling, especially as angel groups do bigger rounds of financing.   Note that this applies only to earl stage Series A-type equity financings and assumes no cash dividends are paid to investors. . This is why a bottom up approach is more credible.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Growthink Blog

MAY 10, 2012

Mezzanine Financing Most companies that raise equity capital and are eventually acquired or go public receive multiple rounds of financing first. No right or wrong answer here, but if this is your vision then it's important to consider when negotiating deal terms on earlier stage financing rounds. Seed Funding 3.

Equity 88

Equity Mezzanine Later Stage Venture Capital 88

Agile VC

FEBRUARY 2, 2012

I’ll focus for now on the business itself, there’s plenty of other info on the web if you care to understand the equity ownership or financing history of Facebook and frankly this has been fairly well known for awhile. ==. Financial Snapshot : 2011 Revenue: $3.71 2011 YoY Revenue Growth: 88%. Facebook, Inc.

IPO 100

IPO South Korea Venezuela Revenue 100

Gust

DECEMBER 8, 2011

Enter into agreements between Newco and founders, early contributors, outside advisors or service providers under which they contribute or assign all intellectual property related to the company’s business to Newco in exchange for the issuance of founders’ stock (Common Stock). Make escrow arrangements for restricted stock (i.e.,

Intellectual Property 139

Intellectual Property Non-disclosure Agreement Delaware Stock 139

Ben's Blog

JULY 16, 2013

Perhaps you are caught in the “Series A crunch” or perhaps you are a consumer company and expected that you would be valued on users rather than revenue like the last time. They might have said something ridiculous like: “Based on the current price of the preferred stock, your offer is already worth $5M.” How could this be? Silly them.

Down Round 73

Down Round Marketing Preferred Stock Post-Money Valuation 73

Ben's Blog

JULY 16, 2013

Perhaps you are caught in the “Series A crunch” or perhaps you are a consumer company and expected that you would be valued on users rather than revenue like the last time. They might have said something ridiculous like: “Based on the current price of the preferred stock, your offer is already worth $5M.” How could this be? Silly them.

Marketing 36

Marketing Preferred Stock Post-Money Valuation Down Round 36

blog.simeonov.com

FEBRUARY 22, 2010

However, founder agreements are not set in stone and it is common for them to be tweaked by a little or a lot during the first financing by professional investors. Sometimes, the vesting is milestone-based (upon the close of a financing) or performance-based (signing up customers, doing deals, recruiting). more details ].

Founder 44

Founder Vesting Agile Startup 44