Both Sides of the Table

MAY 2, 2015

It’s such a tricky balance between being cost-focused & scrappy versus being impractical with how you spend your time. A great finance leader is on top of your numbers with such precision that you don’t have to worry about it. Stock option top-ups after a few years are vital retention mechanisms.

Operations 150

Operations Metrics Early Stage Non-Compete 150

Up and Running

DECEMBER 1, 2015

If however you are giving a “normal employee” an incentive stock option plan (more on that later), that’s entirely different. Make sure you understand all of your options before making any decisions. When business owners decide to go down the route of equity compensation, there are two primary options to choose between.

Equity 60

Equity Employee Stock Options Vesting 60

Both Sides of the Table

SEPTEMBER 18, 2014

It’s like we need a finance 101 course for entrepreneurs. 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. Less than you’ll probably grant your most junior employees in stock options? Stock Option plans.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Austin Startup

NOVEMBER 29, 2017

Partly as a result of the relatively low tax burden, the overall cost level is an order of magnitude lower than in the coastal tech hubs. In a nutshell — even if you’re obsessed with setting up shop in San Francisco or New York, Austin could be a great place to figuring out your business before increasing the cost base.

Early Stage 48

Early Stage Austin Silicon Valley Texas 48

Up and Running

JULY 2, 2014

Our attorney updated our operating agreement to include a “non-dilution clause” for this investor, and my business partner and I later found out how much this would cost our company—both financially and otherwise. Have they worked with companies who have raised multiple rounds of financing to start or grow?

Technical Review 118

Technical Review Angel Investor Due Diligence Dilution 118

Both Sides of the Table

FEBRUARY 22, 2019

Most votes are for administrative tasks such as stock options, 409a valuations, meeting minute approvals, compensation increases, etc. I personally think you should avoid this at all costs?—?even every voice has the ability to sway a conversation and the tenor of the meeting. To be clear about one thing?—?almost

Strategic Investors 255

Strategic Investors Startup Stock Options Venture Capital 255

Both Sides of the Table

FEBRUARY 25, 2019

Here are some observations I have from this exposure: If a company moves from strength-to-strength with predictable outcomes, easy financings, low staff turn-over, limited competitive threats then the composition of the board probably doesn’t matter as much. The founders of a company are fighting. Can we help them get along?

LP 269

LP Startup Burn Rate Stock Options 269

Startup Company Lawyer

MARCH 12, 2009

Any company that raises venture financing will need to be a C corp in order to issue preferred stock. If founders want the benefit of flow through tax treatment with respect to losses prior to an outside financing, an S corp election may make sense as long as there are no entity or non-U.S. citizen/resident stockholders.

LLC 61

LLC Stock Options Preferred Stock Stock 61

www.inc.com

SEPTEMBER 24, 2011

Finance | Tuesdays. Financing a Small Business. Financing A Small Business. Personal Finance. Before Roving Software could receive its first round of financing from professional investors, in early 1999, he had to put all the stock arrangements in writing. Start-up | Mondays. Technology | Thursdays.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

The Startup Magazine

JUNE 1, 2023

Be honest with yourself VCs are now going to be looking closer at margins, cost structures and true sales, and product market fit. After all, you’ve likely given your employees stock options which make them part-time business owners as well. As a founder, ask yourself – does your business actually warrant VC funding?

Early Stage 104

Early Stage Los Angeles Silicon Valley Cofounder 104

Gust

SEPTEMBER 17, 2014

It’s like we need a finance 101 course for entrepreneurs. 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. Less than you’ll probably grant your most junior employees in stock options? Stock Option plans. There were no metrics.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Both Sides of the Table

FEBRUARY 27, 2019

Very few people turn up with a strong sense of “what we should be doing” or ready to lean into a productive conversation The financials were prepared by the VP of Finance / CFO. The law firm has done its job of preparing the stock option requests, board meeting minutes, 409a valuations. There are too many pages.

Stock Options 226

Stock Options Metrics Stock Valuation 226

Scott Edward Walker

APRIL 9, 2012

Introduction We are in the golden age of seed financing. Venture capital funds, seed funds, super angels, angel groups, incubators, and “friends and family” are all playing the seed financing game and investing early in startups in an attempt to land the next Facebook. Why Can’t a Startup Issue Shares of Common Stock to Investors?

Preferred Stock 87

Preferred Stock Finance Common Stock Liquidation Preference 87

The Next Web

MARCH 2, 2014

Instead, honestly analyze the company’s business plan and finances to determine whether the business needs to secure outside funding in order to achieve its objectives, and if so, how much. Should we finance with debt or equity? This is the ultimate question to consider when weighing funding options. Take your time.

Liquidity Event 139

Liquidity Event Equity Finance Stock Options 139

Both Sides of the Table

MAY 23, 2010

Often when startups who have raised venture capital need another round of financing they will turn to their existing investors to give them money before raising from outsiders. a loan) that is later converted to equity at the time of the next financing. It starts as a debt instrument (e.g.

Startup 290

Startup Burn Rate Warrant Bankruptcy 290

The Startup Magazine

NOVEMBER 14, 2018

With the cost of Bitcoin, investing in Altcoins provides you with more flexibility and choice. 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 Stock 102

Common Stock Stock Stock Options Startup 102

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.   First , dividends.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Berkonomics

AUGUST 27, 2015

They financed their companies, to the extent possible, in a manner minimizing the cost of capital, planning for organic growth in the number of customers served and in associated revenues. Flippers financed by venture capitalists are more likely to hire executives having high level profiles and previous exit experience.

Intellectual Property 48

Intellectual Property Balance Sheet Stock Options Valuation 48

Gust

DECEMBER 8, 2011

For those of us who do it every day or every week, there is also a “ well-worn path ” involving reams of very familiar-looking documents that will take relatively little time (and therefore cost relatively little in legal fees) to prepare for a new startup. Caveat entrepreneur !

Intellectual Property 139

Intellectual Property Non-disclosure Agreement Delaware Stock 139

ithacaVC

JUNE 20, 2011

Cost is the overriding issue for startups when it comes to properly engaging a lawyer. My general retort on this point is this: expect to incur real lawyer costs and get over it. 4. You are raising money: raising funds requires documentation regardless of type of financing. This is just the tip of the iceberg.

Stock Options 58

Stock Options Vesting Subscription Agreement Founder Vesting 58

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. ==. Here’s my first look at Facebook viewed through the lens of their IPO filing. Facebook, Inc.

IPO 100

IPO South Korea Venezuela Revenue 100

www.copelandfirm.com

OCTOBER 21, 2010

Home About Fee Arrangements Location Referrals Testimonials Business Law HUB Certification Mergers & Acquisitions Startup Advice Intellectual Property Copyrights Trademarks Securities Law Debt and Bridge Financing Series A Startup Law Entity Formation Corporation LLC Series LLC RSS Founders Shares: How do you split them up? Site Map.

Intellectual Property 40

Intellectual Property Founder Vesting Bridge Financing 40

Startup Company Lawyer

JULY 20, 2009

Issuing stock options. Many entrepreneurs do not have the cash to pay third parties and may partially compensate third parties by granting stock options or giving them the opportunity to purchase equity at nominal prices. Launching a service/product and general liability issues.

IP 67

IP Stock Options Preferred Stock Capital Gains 67

thebarefootvc

MAY 13, 2015

After taking an economics class in college which sparked my interest in business, I changed my focus to a dual degree in finance and communications, with the goal of combining capitalism with media to make an impact on the world. The hidden cost of this (and employee burnout) is one that any investor is all too familiar with.

Silicon Valley 40

Silicon Valley Tanzania New Jersey United States 40

thebarefootvc

MAY 13, 2015

After taking an economics class in college which sparked my interest in business, I changed my focus to a dual degree in finance and communications, with the goal of combining capitalism with media to make an impact on the world. The hidden cost of this (and employee burnout) is one that any investor is all too familiar with.

Silicon Valley 40

Silicon Valley Tanzania New Jersey United States 40

VC Adventure

DECEMBER 4, 2009

This conclusion is backed up by the National Venture Capital Association which tracks the impact of private companies who receive institutional venture financing. This will surely result in fewer companies being able to obtain financing (and as far as I can tell provide no meaningful added investor protections).

Accredited Investor 49

Accredited Investor Venture Capital Stock Options Government 49

Venture Chronicles

APRIL 19, 2010

Rather than focus on the valuation issue, which really isn’t that meaningful aside from generating a lot of attention and completely screwing up stock options for new employees, I’d like to look at the big picture here, which is the evolving nature of consumer buying behaviors.

San Francisco 39

San Francisco Stock Options Valuation Chicago 39

Duct Tape Marketing

MAY 23, 2019

Jenny Blake: That’s how I feel too, and of course we can say it’d be nice if finances were an option at that point, we’re not having to work incredibly hard just to survive. Jenny Blake: Yes, I have a whole chapter in the book on pivot finances. John Jantsch: Plus a bunch of stock options.

Programming 62

Programming Finance Turkey Stock Options 62

Small Business Force

JANUARY 1, 2012

This will cost you more than a breakfast, but it will be well worth it (see my previous post regarding "free advice being worth what you pay for it"). So structure something that works for you and for them, whether that be cash or stock options in your company.

Advisory Board 33

Advisory Board Stock Options Small Business Stock 33

www.payne.org

SEPTEMBER 22, 2011

The vesting terms are usually set by an "Incentive Stock Option (ISO) plan" approved by the companys Board of Directors, and are used for all employees. Companies can usually only do founders stock at the early stage because a fair market value is established after the company is funded, and that amount can be significant.

Equity 56

Equity Employee Vesting Preferred Stock 56

ReadWriteStart

JANUARY 28, 2022

In the case of a warrant, the expiration date is the final day on which it can be converted into common stock. Considering that a warrant is often issued to decrease the cost of a debt issuer, the expiration period is typically more than two years after the warrant is first issued. Equity for Co-founders. What is startup valuation?

Valuation 108

Valuation Equity Warrant Common Stock 108

Up and Running

JUNE 19, 2015

They have resources as a person and so they use those resources in their business so they start to mix their personal finance and their business finance. Every single piece of financing, every trade account, personally guarantee, and it always made me sick that those were always piling up. That’s my dream.

Cloud 60

Cloud Small Business Silicon Valley Media 60

venturehacks.com

OCTOBER 21, 2010

Reading on, the term sheet states, “The $8 million pre-money valuation includes an option pool equal to 20% of the post-financing fully diluted capitalization.&# As your lawyer explains that the so-called pre-money valuation always includes a large unallocated option pool for new employees, your stomach sinks.

Option Pool 68

Option Pool Pre-Money Valuation Dilution Valuation 68

A Smart Bear: Startups and Marketing for Geeks

MARCH 11, 2014

You have your general management meeting and in your general management meeting you talk about product development, about marketing and about finance. You may call it employee number one with a really low salary and really generous stock options and as the company grows, you’ll fix their salary. Edwin: I know.

Technical Cofounder 220

Technical Cofounder Cofounder Software Review Management 220

www.quora.com

SEPTEMBER 22, 2011

Type to Add and Search Questions; Search Topics and People Startups Startup Compensation Entrepreneurship Compensation Stock Options Major Internet Companies Silicon Valley Why is there such a large founder to early employee equity drop-off? 109k/year plus the option to build more widgets in the future.

Equity 40

Equity Employee Founder Cofounder 40

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. The options typically vest monthly over 1-2 years with 100% single-trigger acceleration and no cliff. The opportunity cost is probably too high.

Advisory Board 44

Advisory Board Cap Table Vesting Equity 44

Startup Company Lawyer

MAY 1, 2009

Data is analyzed by: founder/non-founder status, company revenue and headcount, geography, business segment, and number of financing rounds raised. Participants who complete the survey will receive the full results at no cost. . Tags: Stock options. The 2008 results are available on Altgate and are also embedded below.

Stock Options 31

Stock Options CTO Hire Equity 31