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. IP Ownership.

Vesting 89

Vesting Software Review IP Intellectual Property 89

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

David Teten

JANUARY 19, 2021

More and more startups are pursuing Revenue-Based VCs , but “RBI” doesn’t fit everyone. Flexible VC 101: Equity Meets Revenue Share. By tying payments to actual revenues, founders and investors remain aligned around the company’s real-time performance, good or bad. Flexible VC: Revenue -based. Of the Inc.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

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

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. Make the warrants for common stock and not preferred stock.

Warrant 298

Warrant Dilution Startup Stock Options 298

Startup Professionals Musings

JUNE 9, 2010

Startups ask me “How much money should I ask for?” Angels might be interested during “early stage” if you have a prototype, but VCs won’t bite until you have a product, customers, and revenue. The most common case is an equity investment, but there are many terms that can impact what request size is credible. Marty Zwilling.

Valuation 227

Valuation Early Stage Warrant Startup 227

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. Some even insisted that all prior preferred stock had to be converted to common stock. You can do another startup again with your head held high.

Cram Down 417

Cram Down Founder Venture Capital Recapitalization 417

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

Both Sides of the Table

SEPTEMBER 18, 2014

Revenue multiple? 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. Startup Lessons'

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Tim Keane

JANUARY 12, 2010

Startups and angels: Along the way to success. 3]   However, if they are built bottom up, they demonstrate and make explicit a range of business model assumptions the entrepreneur is using to think about his business and its revenue model.   Pre-bubble Siliicon Valley deals were popularly valued at multiples of revenue.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

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

Startup Professionals Musings

OCTOBER 29, 2013

Startups ask me “How much money should I ask for?” Angels might be interested during “early stage” if you have a prototype, but VCs won’t bite until you have a product, customers, and revenue. The most common case is an equity investment, but there are many terms that can impact what request size is credible. Marty Zwilling.

Valuation 258

Valuation Early Stage Warrant Common Stock 258

YoungUpstarts

JUNE 26, 2020

by Rizwan Virk, author of “ Startup Myths and Models: What You Won’t Learn in Business School “. If you are building a startup, you’ll find no shortage of people who are willing to give you advice, particularly when it comes to raising financing. I used to think a valuation was kind of like a stock price of a public company.

Finance 205

Finance Silicon Valley Valuation Startup 205

Startup Professionals Musings

SEPTEMBER 19, 2012

Startups ask me “How much money should I ask for?” Angels might be interested during “early stage” if you have a prototype, but VCs won’t bite until you have a product, customers, and revenue. The most common case is an equity investment, but there are many terms that can impact what request size is credible.

Valuation 236

Valuation Early Stage Warrant Common Stock 236

www.inc.com

SEPTEMBER 24, 2011

Advisor. ); STARTUP. But with the help of Grahams company, which specializes in creating tech systems for start-ups, Jumpstart grew to more than $50 million in revenue--enough to make it an attractive acquisition for media conglomerate Hachette Filipacchi. Arizona Bay has also blended equity payments with revenue-sharing deals.

Arizona 40

Arizona Equity Iowa Venture Capital 40

Startup Professionals Musings

JULY 8, 2011

Startups ask me “How much money should I ask for?” Angels might be interested during “early stage” if you have a prototype, but VCs won’t bite until you have a product, customers, and revenue. The most common case is an equity investment, but there are many terms that can impact what request size is credible.

Entrepreneur 234

Entrepreneur Valuation Early Stage Warrant 234

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.

IP 40

IP Software Review Founder Technical Review 40

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

Valuation 108

Valuation Equity Warrant Common Stock 108

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. What are common planning mistakes and how do you to avoid them? Description: How to get it. How to grow it.

Founder 28

Founder Warrant San Francisco Intellectual Property 28

Gust

JUNE 28, 2012

But I’m sure there will be many, many stories of all kinds once the final provisions go into effect in January, and it will take quite a while for this all to shake out.

Common Stock 143

Common Stock Equity Stock Revenue 143

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

Gust

OCTOBER 12, 2011

In my experience, a term of 12 to 24 months is common, with 12 months being on the short end. That is obviously a challenge for the typical cash-strapped early stage startup that is seeking to raise more capital and is not in any kind of position to be repaying loans. First, a word about the maturity date.

Finance 107

Finance Term Sheet Pre-Money Valuation Early Stage 107

Agile VC

FEBRUARY 2, 2012

AGILEVC My idle thoughts on tech startups. I recently wrote a post noting that while the growth cycle of startups has clearly accelerated in the last 5 years, the number of truly monster new businesses (a company ultimately worth $75-100B) remains about the same … it’s a once in a decade sort of thing. February 2, 2012.

IPO 100

IPO South Korea Venezuela Revenue 100

Lightspeed Venture Partners

OCTOBER 1, 2012

On the other hand, a 7% royalty means that Kevin and Barbara got to keep 93% of future revenues. There is a lot of momentum in startups. As always, I’m trying to draw one or two lessons that apply more broadly to startups from each company pitch. Robert said- “You seem to be looking for a lifeline.

Pre-Money Valuation 158

Pre-Money Valuation Valuation Participating Preferred Preferred Stock 158

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

Growthink Blog

MAY 10, 2012

Nevertheless, this is when you get the startup money to kickstart your business with the bare essentials needed to begin making and fulfilling your first sales. Put everything else on your "wish list" to buy with revenues from sales or additional financing.

Equity 88

Equity Mezzanine Later Stage Venture Capital 88

ithacaVC

SEPTEMBER 20, 2011

Let’s say a given company has raised $15mm in VC funding and is generating about $3mm in revenue and starting to ramp up quickly. Furthermore, it is in an industry where M&A transactions typically happen in the 3-4X revenue range.

Liquidation Preference 49

Liquidation Preference Common Stock Stock Options Valuation 49

Up and Running

NOVEMBER 23, 2010

I ‘m very impressed by Rand Fishkin’s A Cautionary Tale from the Startup World posted on his blog over the weekend. 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.

Common Stock 63

Common Stock Stock Options Stock Cofounder 63

blog.simeonov.com

FEBRUARY 22, 2010

I have been thinking a lot recently about how to apply agile development principles to investing and key aspects of startup development such as team building. The first post is about agile startup fundraising. The follow-on post is about agile startup team building. If you’ve read and liked these posts, let others know.

Founder 44

Founder Vesting Agile Startup 44

Ben's Blog

JULY 16, 2013

If you run a startup and are currently raising money, you probably planned for a somewhat different fundraising environment than the one you find yourself in today. 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.

Down Round 73

Down Round Marketing Preferred Stock Post-Money Valuation 73

Ben's Blog

JULY 16, 2013

If you run a startup and are currently raising money, you probably planned for a somewhat different fundraising environment than the one you find yourself in today. 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.

Marketing 36

Marketing Preferred Stock Post-Money Valuation Down Round 36

ReadWriteStart

FEBRUARY 13, 2020

For most startups, it’s no secret that a significant part of their long-term plans is to go public and become the next market darling for investors. Here are three IPO lessons and what they hold for today’s startups. The obvious lesson here is to make sure that your startup’s financial house is in order.

IPO 147

IPO Startup Stock Initial Public Offering 147