Up and Running

SEPTEMBER 19, 2017

They allow you to hire more people, purchase new technology, and establish new business connections, among many other benefits. 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.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

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

Both Sides of the Table

MAY 13, 2013

The Aqui-hire Business. If the money comes from professional investors it usually has a “liquidation preference” meaning that their money comes out before the founders or common stock. (If Hire legions of young, impressionable graduates from the top engineering universities. Chief Vesting Officers)?

Liquidation Preference 357

Liquidation Preference Early Stage Retention Lock-up Period 357

venturehacks.com

MARCH 21, 2008

Advisor compensation Whether you’re hiring a normal advisor or super advisor: Advisory shares are usually issued as common stock options. Advisory shares are normal common stock. The options typically vest monthly over 1-2 years with 100% single-trigger acceleration and no cliff. What are advisory shares?

Advisory Board 44

Advisory Board Cap Table Vesting Equity 44

www.paulgraham.com

APRIL 28, 2010

For example, a seed firmshould be able to give advice about how to approach VCs, which VCsobviously dont need to do; whereas VCs should be able to giveadvice about how to hire an "executive team," which is not an issuein the seed stage. Theres only common stock at this stage. They find somejust as the prototype is demoable.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Up and Running

DECEMBER 1, 2015

Typically, employers that offer employees equity compensation will do so in the form of common stock, preferred stock, or stock options. This type of stock is typically given to founders and early employees with the stock value is near zero. See Also: 10 Tips for Dealing With Startup Stock Options.

Equity 60

Equity Employee Stock Options Vesting 60

Startup Company Lawyer

MAY 4, 2009

Hiring and Firing. July 14th, 2009: Implement hiring policies and practices. Description: When to hire and when to fire? How to hire the best vendors for the best rates. The Founder Institute has developed Class F common stock , which provides founders with a maximum amount of control over the founder’s company.

Founder 28

Founder Warrant San Francisco Intellectual Property 28

Up and Running

AUGUST 17, 2015

C Corp versus LLC, non-competes, liquidation preferences, preferred versus common stock, and so on). While there is a wealth of information available online, it’s all a lot more tangible when you have case law and real life anecdotes attached to these considerations.

Entrepreneur 60

Entrepreneur Cofounder Angel Investor eCommerce 60

ReadWriteStart

NOVEMBER 15, 2010

Documents that can be created include a Certificate of Incorporation, Bylaws, Consent of Board of Directors, and Common Stock Certificates. The Founder's Workbench also contains a number of guides on various legal topics, including hiring, equity compensation, investment issues, and IP law.

Founder 117

Founder Common Stock IP Startup 117

keen.io

FEBRUARY 5, 2013

On the other hand, this was new territory for the founders as well; they had zero experience making offers to new startup hires. As a founder, his salary was lower than any of those offered to the new hires; he also had substantially more equity. But would it make sense for both of us to take that route?

Salary 50

Salary Equity Startup San Francisco 50

www.mattbartus.com

SEPTEMBER 24, 2011

First, you’d probably want them to receive common stock, not preferred stock (which is the likely next round). Do the implications of hiring independent contractors differ state to state? [link] mattbartus. All forms of creativity are welcome, but I do think it suffers a little bit from the complexity problem.

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

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. This can be helpful when you are hiring a COO for the company, and the candidate asks to get percentage ownership in the company. Total share ownership.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

Eric Friedman

JUNE 27, 2016

This is the classic “hire people smarter than you” which is harder said than done. A little bit of background first on options: In order to issue options, your company must have a valid 409A valuation setting the fair market value (“FMV”) of a share of common stock. Think about the things you DON’T know.

Equity 98

Equity Vesting Cap Table Common Stock 98

www.payne.org

SEPTEMBER 22, 2011

2 Stock Classes: Common and Preferred. 5 Stock vs Options. 6 Founders / Restricted Stock. The re-heating of the venture funded tech market has pushed a heat up of the hiring market, and Im getting more calls from friends asking for help understanding startup stock (equity) offers. 3 Dilution. 4 Vesting.

Equity 56

Equity Employee Vesting Preferred Stock 56

Early Growth Financial Services

JUNE 26, 2014

Valuation — Know what these terms mean: Fully-diluted — This includes all issued stock and anything that could be converted into common stock (typically after an acquisition or IPO), such as your stock option pool.

Pre-Money Valuation 51

Pre-Money Valuation Option Pool Dilution Common Stock 51

ithacaVC

DECEMBER 13, 2013

They are typically pretty simple: (i) shares owned by founders and (ii) shares authorized for issuance in a stock option pool, some of which may be issued to employees already and some of which will be available for future issuance. Often times a plug is used around 10%. I have posted on this previously. Back to our basics.

Cap Table 67

Cap Table Pre-Money Valuation Option Pool Liquidation Preference 67

Berkonomics

JULY 10, 2010

In this case, payment for the attorney advisory board member was agreed to in the form of common stock options more generous than the average advisory board grant, as the attorney was invited to sit in on all meetings of the corporate board and agreed to do so.

Advisory Board 63

Advisory Board Stock Options Stock Common Stock 63

Startup Company Lawyer

JULY 20, 2009

Once again, please keep in mind that the documents from typical online incorporation services do not contain IP assignment provisions in connection with the purchase of founders stock or separate IP assignment documents. Hiring employees or third party contractors.

IP 67

IP Stock Options Preferred Stock Capital Gains 67

Up and Running

NOVEMBER 23, 2010

But, tragically, 3 years after their apex, this firm sold for less than their annual revenue, laid off nearly the entire staff, and left common stock shareholders, my friends included, with nothing. At its height, the company employed more than 130 people and their products reached customers in dozens of countries. What happened?

Common Stock 63

Common Stock Stock Options Stock Cofounder 63

venturehacks.com

OCTOBER 21, 2010

Use a hiring plan to justify a small option pool, increase your share price, and increase your effective valuation. This reverse dilution benefits all classes of stock proportionally even though the common stock holders paid for all of the initial dilution in the first place! Manager or Junior Engineer 0.2 – 0.33

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68

thestartuplawyer.com

FEBRUARY 24, 2010

Who must be a co founder and who can remain a hired principal? When I find, and hire on options, the three perfect CEs/directors must I consider them co founders and treat them accordingly? Who must be a co founder and who can remain a hired principal? He obviously never launched a startup and got shafted by a co-founder.

Cofounder 40

Cofounder Founder Preferred Stock Startup 40

Austin Startup

MAY 17, 2017

The Board of Directors, however, is the most powerful group of people in the Company , with the ability to hire and fire senior executives and approve (or block) key transactions. Their interests as an investor are more aligned with the new VCs investing in the Series A than they are with the Common Stock. They just advise.

Seed Stage 48

Seed Stage Startup Cap Table Angel Investor 48

blog.simeonov.com

FEBRUARY 22, 2010

They have voting rights which may entitle them to force or veto certain key decisions, e.g., hiring or firing the CEO, selling the company, raising money, etc. For example, you hire a consultant for five months at $10K/mo and then you raise $500K on $1.5M For her services, the consultant will own common stock equal to $50K/$2M or 2.5%

Founder 44

Founder Vesting Agile Startup 44

Startup Lessons Learned

AUGUST 26, 2009

They take common stock, not preferred, a fact that the entrepreneurs mentioned to me many times. Every summer, they bring approximately 10 companies to Boulder for an intense "accelerator" experience (dont call it an incubator, or youll get dirty looks).

San Francisco 113

San Francisco Silicon Valley Startup Lean 113