Feld Thoughts

SEPTEMBER 2, 2011

This week they set out to create their cap table and hire a CTO. As first time entrepreneurs they did not create an employee options pool; we’ll fix that in a little while. They come up with two options: Hire Praveena as an employee and offer her stock options. Praveena wants to invest $20,000 and get 20% equity.

Cap Table 133

Cap Table CTO Hire Technical Cofounder Cofounder 133

Steve Blank

APRIL 10, 2019

VC’s have just changed the ~50-year old social contract with startup employees. For most startup employee’s startup stock options are now a bad deal. As Venture Capital emerged as an industry in the mid 1970’s, investors in venture-funded startups began to give stock options to all their employees. Here’s why.

Stock Options 335

Stock Options Stock Vesting Common Stock 335

Steve Blank

NOVEMBER 13, 2018

If you’re an early employee at a startup, one day you will wake up to find that what you worked on 24/7 for the last year is no longer the most important thing – you’re no longer the most important employee, and process, meetings, paperwork and managers and bosses have shown up. The company was going to hire a VP of Marketing.

Part-Time VPE 334

Part-Time VPE Employee Cofounder Hiring 334

Both Sides of the Table

NOVEMBER 14, 2017

As a startup in this phase you often raise capital, get press, hire staff and everything feels possible. I always push companies to hire “an operationally focused CFO” during this phase because in order to systematize you need somebody who brings economic rigor to decision making. As an early-stage VC I love this phase.

Operations 286

Operations New York City Technical Review Startup 286

The Next Web

OCTOBER 7, 2013

They were referring to non-founder engineers, most commonly the first hire for technology businesses. From the perspective of my outside friends, why are employees that so clearly impact the growth trajectory of a company look like they’re getting screwed? These common shares are granted to founders from the beginning, not employees.

Engineer 129

Engineer Dilution Option Pool Vesting 129

Startup Professionals Musings

AUGUST 21, 2019

A common practice is to hire local employees who know the geographic culture, even though this may well dilute the company culture. This usually marks the end of organic growth, as partnerships and alliances aid growth, but again dilute the focus on culture. Product-line expansion. Efficiency and scale.

Dilution 224

Dilution Merger Flash Global 224

YoungUpstarts

JUNE 13, 2011

They end up trying to do too much for too many, which dilutes their focus and often the quality of their product or service. You must evolve from being a doer to a manager of employees and then eventually to a manager of managers (a leader). Hiring smart. The problem is that too many entrepreneurs never learn to say ‘NO!’

Indianapolis 219

Indianapolis Minneapolis Kentucky Virginia 219

Startup Professionals Musings

OCTOBER 14, 2013

A common practice is to hire local employees who know the geographic culture, even though this may well dilute the company culture. This usually marks the end of organic growth, as partnerships and alliances aid growth, but again dilute the focus on culture. Product-line expansion. Efficiency and scale.

Dilution 187

Dilution Merger Flash Global 187

thinkspace.com

SEPTEMBER 7, 2012

How to Divide Equity to Startup Founders, Advisors, and Employees. The part that I’d like to zero in on is when you’ve got a high growth company what are some of the best practices out there to distribute equity to the founders, advisors, and employees? Equity for Employees. Office Space. Virtual Office. CEO 5 - 10.

Equity 62

Equity Employee Founder CTO Hire 62

www.avc.com

SEPTEMBER 22, 2011

Employee Equity: How Much? The most common comment in this long and complicated MBA Mondays series on Employee Equity is the question of how much equity should you grant when you make a hire. For your first key hires, three, five, maybe as much as ten, you will probably not be able to use any kind of formula.

Equity 64

Equity Employee CTO Hire Fractional CTO 64

The Next Web

JUNE 15, 2012

From Silicon Valley to Peoria, Illinois, cash-strapped startups look for inventive way to finance their business – often handing out equity to employees, consultants, vendors, and other service providers. Not to mention the fact that every time you compensate with equity, you dilute your own ownership of the business. Plan upfront.

Equity 116

Equity Stock Options Vesting Stock 116

The Next Web

OCTOBER 10, 2013

Hire everyone you need as an employee. Too dilutive.”. Dilution – bringing on a co-founder likely means you’re splitting your share in half. The required number of cofounders for success is: “Zero” – You don’t need a cofounder. You are the founder, the visionary, the uber-entrepreneur. One” – You have to have a cofounder.

Cofounder 143

Cofounder Technical Cofounder Kenya Dilution 143

Startup Professionals Musings

SEPTEMBER 2, 2017

A common practice is to hire local employees who know the geographic culture, even though this may well dilute the company culture. This usually marks the end of organic growth, as partnerships and alliances aid growth, but again dilute the focus on culture. Product-line expansion. Efficiency and scale.

Dilution 134

Dilution Merger Flash Global 134

Up and Running

JULY 2, 2014

We had personally invested $70,000 of our own money at this point, and we were hoping to raise at least another $250,000 to help us hire a team, launch our company, and begin to build our product. of our company in exchange for the $300K, and my business partner and I each diluted from 50% ownership down to 33.3%

Technical Review 118

Technical Review Angel Investor Due Diligence Dilution 118

VC Adventure

AUGUST 16, 2020

Despite how much time companies talk about the importance of their employees and, in many cases, how every employee is also an “owner” of their business through their option program, most companies are pretty ad hoc (or down right sloppy) about how they plan for and execute their option program.

Programming 148

Programming Vesting Equity Software Review 148

VC Cafe

JUNE 10, 2022

As a result, founders are accepting increased dilution of the stakes they hold in their own companies. These changes come as Meta is dealing with slowed revenue growth , which has led the company to freeze hiring in some divisions. As layoffs in Israeli startups ramp up, a new resource for affected employees.

Valuation 151

Valuation Marketing Israel Venture Capital 151

Startup Professionals Musings

JANUARY 14, 2015

A common practice is to hire local employees who know the geographic culture, even though this may well dilute the company culture. This usually marks the end of organic growth, as partnerships and alliances aid growth, but again dilute the focus on culture. Product-line expansion. Efficiency and scale.

Matching 120

Matching Marketing Dilution Startup 120

Both Sides of the Table

MAY 7, 2016

From Aspiration to Hero For companies that do have that moment of success where everything seems to come together: funding, hiring, customers, PR, product releases and so forth — you have a “hero” moment where you feel invincible. Maybe it’s the system, maybe it’s me — but either way what could I do differently to change outcomes?

Churn Rate 150

Churn Rate Vesting Dilution Europe 150

Up and Running

JULY 1, 2020

While it’s called a business plan, it can be written and utilized to successfully enter a new market, launch a product, or weigh the potential of adding an employee. Executive summary: This short summary quickly informs your employees, lenders, and investors about the nature and benefits of the expansion.

Business Plan 152

Business Plan Forecast Operations Dilution 152

The Startup Magazine

AUGUST 9, 2022

Even hiring can be thought of as a subset of adaptability whereby at first you’re hiring generalists that can wear many hats because you simply don’t have the resources to hire individualists (people that are great at very specific things) and as the company grows, you need to adapt that hiring. Quality control?

Cofounder 158

Cofounder Founder Miami Marketing 158

Gust

APRIL 9, 2014

Equity dilution works when the same pie is divided among more people. Over time, other people receive pieces of equity in exchange for work (employee stock options), money (seed, angel and venture investors), services (attorneys, directors, etc.).

Dilution 150

Dilution Equity Vesting Stock Options 150

Austin Startup

MAY 8, 2018

Background reading: Founder Compensation: Cash, Equity, Liquidity Fatal Errors in Early Startup Hiring Early Hires: Options or Stock Given how deeply involved we are with early-stage startups hiring their first key employees, I figured it would be helpful to outline a few key principles to help entrepreneurs navigate the topic.

Employee 48

Employee Startup Seed Stage Equity 48

Startup Lessons Learned

JULY 5, 2010

I used to give copies of Four Steps out to my employees, in the hopes that it would instantly indoctrinate them into the methodology of Customer Development. Brant and Patrick undertook a difficult challenge: to provide a generally accessible introduction to Customer Development, without diluting its impact or dumbing-down its principles.

Customer Development 166

Customer Development Developer San Francisco Customer 166

Hearpreneur

JANUARY 30, 2022

6- Recruit and retain employees. So many people are starting their own businesses that employees are becoming scarce. You may find that a previous employee has started his or her own business and created exactly what you need. Cross-training existing employees will help cover staffing shortages in the interim.

Entrepreneur 127

Entrepreneur Green Technical Review Social Media 127

betashop.com

OCTOBER 8, 2012

If we don’t enjoy working with someone - an employee, a partner, whomever - we’re just not going to do it. Sure, we employee lots of amazing people whom we trust to help us make it great, but as Founders we still own and control the final product. The most important hiring criteria for your executives is cultural fit.

Technical Review 108

Technical Review Technology Software Review Valuation 108

Startup Professionals Musings

FEBRUARY 3, 2012

Every startup and every big business wishes that all their employees were star performers, but wishing doesn’t make it happen. When hiring or inheriting new team members, it’s important to discuss their strengths, development areas, and blind spots early. Great leaders align the values of work to their team.

Employee 241

Employee Dilution Conversion Developer 241

www.instigatorblog.com

OCTOBER 23, 2010

Changing Equity Structures for Early Startup Employees Tweet Recently someone asked me for advice on how much equity they should give to their early employees. His company had just closed an early round of funding and he wanted to cement the employee relationships. Those first employees will take 0.5-1%

Equity 41

Equity Employee Startup Vesting 41

YoungUpstarts

MAY 6, 2019

By offering the advantages of your company, you will be able to find some great employees. If you are getting funded for the first time, which means that you have not diluted the shares of your company, you will be receiving Series A funding. Hiring more resources. So, hire more people or go for outsourcing to remote workers.

Startup 113

Startup Technical Cofounder Merger Early Stage 113

YoungUpstarts

OCTOBER 16, 2016

But entrepreneurs face other concerns that compete with this growth focus, including hiring, maintaining current revenue sources and distinguishing themselves from the competition. A happy, healthy organizational culture full of great employees exudes confidence and steadiness as you strive forward. I call it casting vision.

Cofounder 100

Cofounder Balance Sheet Small Business Administration Technical Review 100

YoungUpstarts

MAY 31, 2016

Hire smart, ambitious, get-it-done employees and lead them with emotionally intelligent innovation leadership skills. The single biggest reason that the average company struggles or even fails is due to their lack of focus and dilution of their greatest resource, which are people.

Technical Review 100

Technical Review Leadership Early Stage Initial Public Offering 100

Both Sides of the Table

MARCH 9, 2013

Should you increase your burn rate by adding 2 senior hires who will help you ship faster or sell more but then have less time for fund raising? Should you raise $3 million in stead of $2 million even though it means more dilution so that you will have a longer runway? Or maybe their existence itself will help accelerate fund raising.

Cofounder 413

Cofounder Burn Rate Dilution Valuation 413

JANUARY 9, 2014

By trying to appeal to everyone and adding features left, right and centre, you will actually dilute your message and could end up with a complex, bloated product. Hiring badly Startups that get funding early often make the mistake of hiring people too soon, before they’ve really worked out the sort of person they’re looking for.

Early Stage 102

Early Stage Startup Cofounder Design 102

Both Sides of the Table

MAY 15, 2010

You’re thinking about hiring an employee but you sit on the fence too long. Should we delay raising money even though we might take more dilution because we haven’t hit our milestones? Decisions by indecision are those where having not made up your mind early enough your options are constrained or gone altogether.

Dilution 299

Dilution Hiring Partner Employee 299

Both Sides of the Table

SEPTEMBER 28, 2013

An employee walks up to me and says, “Mark, I’m thinking about buying a house. Most employees want cruising altitude, most founders live in take off mode. Dilution / valuation. I wasn’t expecting this much dilution this quickly.” Runway of cash. Would now be a good time to buy a house? ” Yes.

Startup 417

Startup Dilution San Diego Stock Options 417

Startup Professionals Musings

NOVEMBER 5, 2022

In addition, strategic functions involve working ON your business, whereas tactical work, done by most employees, is working IN your business. Certainly managers need to be better trained, more sensitive to worker needs, and focused on hiring and training the right people for the right job, rather than treating all as soldiers.

Management 333

Management Dilution Forecast Leadership 333

Both Sides of the Table

MAY 9, 2011

Conventional wisdom says that you gain far more in working as a team than you lose by diluted by half before you start. Hire your co-founder. Involve them in fund raising, hiring, strategy, etc. Most senior employees who join are given 2% if they join early. Give them a large sum of equity. Vested over 4 years.

Cofounder 393

Cofounder Founder Vesting Founder Vesting 393

Both Sides of the Table

JUNE 17, 2017

If you hire 6 senior sales reps in January at $120,000 / year salary then you’ve taken on an extra $60,000 per month in costs yet these sales people might not close new business 6 months. If you don’t have a strong balance sheet and can’t hire more people that’s fine — but understand this may lead to slower growth.

Stock Options 227

Stock Options Startup Dilution Venture Capital 227