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Startup Stock Options – Why A Good Deal Has Gone Bad

Steve Blank

For most startup employee’s startup stock options are now a bad deal. Why Startups Offer Stock Options. In tech startups stock options were here almost from the beginning, first offered to the founders in 1957 at Fairchild Semiconductor , the first chip startup in Silicon Valley. Here’s why.

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Most Common Early Start-up Mistakes

Both Sides of the Table

Assuming normal valuations at fund raising rounds you’ll be down to 6-12% after you’ve created a stock-option pool and raised capital. But these people seldom make retirement money from the stock options on these companies. Ask them how much they think such a solution would cost them.

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10 Manageable Risks That An Entrepreneur Should Take

Startup Professionals Musings

Even non-profits need revenue to cover their costs, and continue to provide services. Great team members may take more time to find, and cost you stock options, but a qualified and highly motivated team that stretches your budget is a good calculated risk. Find a strategic partner to accelerate growth.

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How to Work with Lawyers at a Startup

Both Sides of the Table

Forget to get around to setting up that Employee Stock Option Plan and want to be able to give the early guys their options at a low strike price? They usually ask for warrants (basically like a stock option) in exchange for taking a deferred fee. Shame about that pesky FAS 157 ruling. Good people and evil people.

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10 Strategies To Avoid Bad Risks In Your New Venture

Startup Professionals Musings

Even non-profits need revenue to cover their costs, and continue to provide services. Great team members may take more time to find, and cost you stock options, but a qualified and highly motivated team that stretches your budget is a good calculated risk. Find a strategic partner to accelerate growth.

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Venture Capital Q&A Session

Both Sides of the Table

Mark Jeffrey - Q: “Is it more traditional to do your ESOP (employee stock option plan) before or after your angel or Series A funding?&# I talked about the need to have a restricted stock plan for your earliest employees. The downside is that people need to buy their stock. This is minutes 8-11. Do it early.

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10 Calculated Risks That Lead To Startup Success

Startup Professionals Musings

Even non-profits need revenue to cover their costs, and continue to provide services. Great team members may take more time to find, and cost you stock options, but a qualified and highly motivated team that stretches your budget is a good calculated risk. Find a strategic partner to accelerate growth.

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