Steve Blank

MARCH 16, 2016

Risk capital takes equity (stock ownership) in your company instead of debt (loans) in exchange for cash. Founders can now access the largest pool of risk capital that ever existed –in the form of Private Equity (Angel Investors, family offices , Venture Capitalists (VC’s) and Hedge Funds.). The Bad News.

Liquidity Event 120

Liquidity Event Founder Liquidation Preference Private Equity 120

Startup Professionals Musings

MAY 8, 2022

Old co-workers or new friends with complementary skills usually make the best partners. You have very little money, and you don’t want to give away your equity. Giving equity is realistic, but base it on contribution and role, with vesting after time and milestones. The right motivated employees dilemma.

Founder 325

Founder Hockey Stick Cofounder Liquidity Event 325

www.inc.com

SEPTEMBER 24, 2011

Employee Benefits. Should You Share Equity with Consultants? Back in 1997, Randy Parker was staring at a blank whiteboard, wondering where hed find the money to hire the employees and consultants he needed to build his new product. "We But sharing equity can have pitfalls, too. Financing A Small Business. Business Taxes.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

The Next Web

OCTOBER 8, 2015

As a rule, entrepreneurs are very protective of their equity, and try to keep 100 percent ownership for themselves. employees, partners) are appropriately motivated to help you succeed. lucrative sales commission plan, profit share plan), and sometimes that comes in the form of equity or equity linked incentives (e.g.,

Equity 60

Equity Employee Warrant Stock Options 60

Both Sides of the Table

JANUARY 21, 2010

You never got around to agreeing exact equity splits but you had many conversations about it. 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? Focus on the partner you would be working with.

Southern California 318

Southern California Silicon Valley IP Stock Options 318

Feld Thoughts

OCTOBER 8, 2013

My partner Dave and I took the number, made a list of all employees, and figured out how much we were going to give each of them. Even better, consider using equity compensation as the bonus. Figure out an equation for converting the bonus amount (in current cash terms) to stock option awards.

Stock Options 146

Stock Options Technical Review Leadership Equity 146

Startup Professionals Musings

AUGUST 10, 2019

Old co-workers or new friends with complementary skills usually make the best partners. You have very little money, and you don’t want to give away your equity. Giving equity is realistic, but base it on contribution and role, with vesting after time and milestones. The right motivated employees dilemma.

Hockey Stick 243

Hockey Stick Cofounder Liquidity Event Startup 243

www.drowningamerican.com

JUNE 22, 2012

Next → How we Hire for Sweat Equity (Part 2)… Posted on April 7, 2011 by Travis Biziorek. The first time we hired partners for Kibin was way back in late 2009. I’m not FaceBook or Twitter and have a s**t-ton of potentially imminent IPO stock options to offer someone. equity in the company.

Sweat Equity 40

Sweat Equity Equity Hiring Technical Review 40

YoungUpstarts

FEBRUARY 11, 2020

Why do you think there are so few women in private equity, and what can be done to change that? When I became a managing partner, aside from directing our strategy on where to invest, I also helped recruit board positions and management teams. And when you walk around, do employees look healthy and happy? It starts at the top.

Switzerland 264

Switzerland Private Equity Stock Options Equity 264

Startup Professionals Musings

DECEMBER 14, 2014

Old co-workers or new friends with complementary skills usually make the best partners. You have very little money, and you don’t want to give away your equity. Giving equity is realistic, but base it on contribution and role, with vesting after time and milestones. The right motivated employees dilemma.

Hockey Stick 268

Hockey Stick Cofounder Entrepreneur Liquidity Event 268

Both Sides of the Table

MARCH 21, 2010

I’ve heard the following so many times that it still makes me scratch my head, “if those guys are going to get rich off of our backs then we’re going to look like fools if we don’t have equity.&#. I’ve already made clear that I think raising equity from “strategic money&# is an oxymoron.

Warrant 298

Warrant Dilution Startup Stock Options 298

Up and Running

SEPTEMBER 10, 2014

Stock Option. It leads me to believe the entrepreneur avoided giving up equity as long as possible and now needs capital to get out of a financial crisis. Management Resumes and Organizational Chart. Customer References. Personal References. Social Security Numbers (for background checks). But don’t ask for a non-disclosure.

Angel Investor 159

Angel Investor Technical Review Software Review Accredited Investor 159

Startup Professionals Musings

AUGUST 19, 2017

Old co-workers or new friends with complementary skills usually make the best partners. You have very little money, and you don’t want to give away your equity. Giving equity is realistic, but base it on contribution and role, with vesting after time and milestones. The right motivated employees dilemma.

Hockey Stick 144

Hockey Stick Cofounder Entrepreneur Liquidity Event 144

Startup Company Lawyer

MARCH 12, 2009

C corps, LLCs, and S corps differ significantly in the areas of taxation, ownership, fundraising, governance and structure, and employee compensation. Any company that raises venture financing will need to be a C corp in order to issue preferred stock. Employee Compensation. Businesses that plan to use equity incentives (e.g.

LLC 61

LLC Stock Options Preferred Stock Stock 61

www.thedailymuse.com

SEPTEMBER 18, 2012

You don’t want a senior partner preparing documents for an incorporation, nor do you want a third-year lawyer negotiating with a seasoned venture capitalist for you. It’s essential to make sure you take reasonable steps to control risk in your interactions with customers, suppliers, users, employees, and the general public. Each other.

Hiring 56

Hiring LLC Intellectual Property Private Equity 56

Startup Professionals Musings

JULY 19, 2013

Old co-workers or new friends with complementary skills usually make the best partners. You have very little money, and you don’t want to give away your equity. Giving equity is realistic, but base it on contribution and role, with vesting after time and milestones. The right motivated employees dilemma.

Founder 245

Founder Hockey Stick Cofounder Liquidity Event 245

Scalable Startup

AUGUST 9, 2018

There are so many Facebook/Google/Apple multi-millionaires who receive new stock options every quarter, often a few hundred thousand dollars every quarter, that feel they should put something back into the system, plus they like the idea of being an investor. They’re betting on you. To me, this is the best time to raise your seed.

Technical Cofounder 20

Technical Cofounder Silicon Valley Early Stage Cofounder 20

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 Founders. Equity for Employees.

Equity 62

Equity Employee Founder CTO Hire 62

Gust

NOVEMBER 4, 2011

In brief, a cap acts to place a limit on the conversion price of a convertible note such that investors are guaranteed a minimum number of shares for their bridge loans if the startup does a priced equity round at a high pre-money valuation – “high” meaning above the cap, which is often a heavily negotiated term. (The

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

infochachkie.com

SEPTEMBER 24, 2011

Instead of hearing from your long lost third-cousin, you will be inundated with an avalanche of ‘congratulatory’ emails, calls and letters from people who want to relieve you of the burden of your hard-earned equity round. The final straw came when I asked the latest 25-year old a simple ‘yes / no’ question related to stock options.

Equity 40

Equity Silicon Valley Cofounder PR 40

Berkonomics

NOVEMBER 23, 2023

Here is the warning: The execution of equity allocations and of a good incentive program using equity is often mismanaged, damaging the corporate capitalization structure and even affecting the outcome of subsequent investment into the company. … Equity is divided between the founders and the business begun. Here are some rules.

Equity 62

Equity Stock Options Vesting Early Stage 62

Both Sides of the Table

MAY 23, 2010

a loan) that is later converted to equity at the time of the next financing. If no financing happened then this “note&# may not be converted and thus would be senior to the equity of the company in the case of a bankruptcy or asset sale. VC’s money comes from mostly institutional investors called LPs (limited partners).

Startup 290

Startup Burn Rate Warrant Bankruptcy 290

Austin Startup

SEPTEMBER 19, 2017

In other cases, they may come from your channel partners or elsewhere. As founders, your job includes selling product to customers, stock to investors, and opportunity to employees. As for compensation, stock options in the range of 0.1% As for compensation, stock options in the range of 0.1%

Advisory Board 48

Advisory Board Sweat Equity Marketing Vertical 48

Agile VC

FEBRUARY 2, 2012

My partner Rob also wondered if Facebook is the next Yahoo! , 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. ==. or the next Google. Facebook, Inc.

IPO 100

IPO South Korea Venezuela Revenue 100

Berkonomics

SEPTEMBER 28, 2017

For those negotiating equity allocations it covers some of the most complex issues to address in the process. Here’s an example: First, a brand-new enterprise is often formed from the efforts of several “partners”, each with an expertise valued by the others. Equity is divided between the founders and the business begun.

Early Stage 102

Early Stage Equity Stock Options Vesting 102

Ben's Blog

APRIL 21, 2010

This guy has run huge organizations with thousands of employees. Six Months Later… Fast-forward six months and everyone in the company is wondering why the sales (or marketing or finance or product) guy who has produced nothing got such a monster stock option package. and “why did he get so many options?”.

Stock Options 70

Stock Options Restful Hiring Sales 70

Berkonomics

MAY 12, 2010

First, a brand new enterprise is often formed from the efforts of several “partners”, each with an expertise valued by the others. Equity is divided between the founders and the business begun. First you must create a stock option plan using your attorney, which must be registered in many states as a security offering.

Early Stage 85

Early Stage Equity Stock Options Vesting 85

Board Effect

MAY 10, 2019

It’s important to note that the structure and contents of a cap table are unique to how a company has chosen to divide its equity. Cap tables are also used to model waterfalls and what-if scenarios, giving companies a better understanding of how different events might impact shareholder payouts and equity dilution.

Cap Table 40

Cap Table Liquidation Preference Dilution Liquidity Event 40

Ben's Blog

APRIL 28, 2010

When my partner Marc wrote his post describing our firm , the most controversial component of our investment strategy was our preference for founding CEOs. Andy Grove was Intel’s third employee (after the two cofounders Robert Noyce and Gordon E. Their emotional commitment exceeds their equity stake. Thomas Watson, Sr.

Technical Review 78

Technical Review Cofounder Technical Cofounder Software Review 78

ReadWriteStart

JUNE 15, 2012

While our startup founders disagreed on many details - particularly the proper role of equity - a common theme did emerge: Developer rock stars know what they’re looking for and what they want - so the onus is on the founder to communicate why his or her tech startup is special: 1. Share the Partner Feel With Equity.

Developer 130

Developer Equity Ruby Cofounder 130

A Smart Bear: Startups and Marketing for Geeks

MARCH 11, 2014

How many employees would a medium-sized business have in your definition? Jason: If I’m managing my whole business with this tool, I don’t have 100 employees. you can’t have one employee because meetings are just too easy and you don’t really have them formally. You can’t have 5,000 employees.

Technical Cofounder 220

Technical Cofounder Cofounder Software Review Management 220

www.paulgraham.com

APRIL 28, 2010

The reason is that employees are investors too—oftheir time—and they want just as much to be able to cash out. Ifyour competitors offer employees stock options that might make themrich, while you make it clear you plan to stay private, yourcompetitors will get the best people. Dont be misled by thisoptimism.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

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

techcrunch.com

OCTOBER 23, 2010

In Meebo’s case, for example, I was lucky enough to partner up with Elaine and Sandy. No looking for partnerships (who’s going to partner with you anyway?). Trust me, once you’ve launched and achieved traction, you’ll have your pick of mentors, VCs, partners and all the legal expenses you need. Partner up? No legal muck.

Technical Review 84

Technical Review Cofounder Technical Cofounder Software Review 84

Austin Startup

SEPTEMBER 9, 2018

And all of our employees receive these as well. the press, current and potential consultants, potential employees (to be clear, all current employees are in the arena with you), current and potential clients, current and potential partners, current and potential investors, etc. The spectators are made up of many people?—?the

Advisory Board 48

Advisory Board Balance Sheet Stock Options Email 48