abovethecrowd.com

FEBRUARY 24, 2015

Historically, different financial institutions specialized in different stages, because the assessment of risk and opportunity was considered unique at each stage — for example, a seed investor was unlikely to do late-stage financing, and vice versa. These liquidation preferences give the investor a debt-like downside protection.

IPO 40

IPO Liquidation Preference Valuation Technical Review 40

Gust

JULY 18, 2012

Yet I’ve rarely seen entrepreneurs more fired up than when recounting war stories of startups whose founders had control of the company wrested from them, were forced to take financing or compensation deals on outrageously onerous terms , or worst of all, fired from their own companies.

Stock Options 188

Stock Options SEC Stock Government 188

Up and Running

MAY 23, 2016

Delaware law gives preferred stock investors of a corporation certain voting rights and control over the corporation. Step 5: Get financed. In fact, when you consider the fact that VCs finance just one or two ventures out of every 100 pitches they see, you might be better off bootstrapping it to begin with.

Software Review 74

Software Review Software Delaware Forecast 74

K9 Ventures

MAY 14, 2011

They are generally high net worth (accredited) individuals who have done well in their career, either as entrepreneurs or as executives and early employees at some of the companies that have done well (in the Valley that usually means Paypal, Google, Facebook etc). Common Stock. Convertible Note or Preferred Stock.

Preferred Stock 125

Preferred Stock Seed Stage Incubator Accredited Investor 125

Hunter Walker

SEPTEMBER 29, 2022

As more growth and crossover investors came into the startup ecosystem they were often eager to put capital to work and happy to consolidate their positions with common or preferred shares from early employees, founders and previous investors. We’re aligned with the founders and the rest of the cap table until we aren’t.

Venture Capital 154

Venture Capital Cap Table LP Equity 154

Up and Running

SEPTEMBER 20, 2021

Furthermore, there are various forms of equity, such as preferred stock, common stock, and convertible notes, which influence the present and potential future investors. Preference shares. A class of stock with special rights as described in your startup is called preference shares. Convertible notes.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

www.payne.org

SEPTEMBER 22, 2011

Startup Equity For Employees. 2 Stock Classes: Common and Preferred. 5 Stock vs Options. 6 Founders / Restricted Stock. The re-heating of the venture funded tech market has pushed a heat up of the hiring market, and Im getting more calls from friends asking for help understanding startup stock (equity) offers.

Equity 56

Equity Employee Vesting Preferred Stock 56

Professor VC

JANUARY 17, 2008

One of the panelists mentioned that they have gotten very valuation sensitive (nothing wrong with that) and like to purchase preferred stock rather than invest in convertible notes. He then went on to say that this type of financing was good for the entrepreneur (vs taking VC money) because they got to keep more of the company.

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

K9 Ventures

NOVEMBER 21, 2011

2) Fairness to other early employees in the company : This is a very critical and important point, that is often overlooked by founders. In most situations that I have come across, the founders usually have a significantly longer tenure working at the company than even the earliest employees and so a founders-only cut-off is acceptable.

Founder 87

Founder Common Stock Preferred Stock Stock 87

K9 Ventures

NOVEMBER 21, 2011

2) Fairness to other early employees in the company : This is a very critical and important point, that is often overlooked by founders. In most situations that I have come across, the founders usually have a significantly longer tenure working at the company than even the earliest employees and so a founders-only cut-off is acceptable.

Founder 84

Founder Common Stock Preferred Stock Stock 84

Growthink Blog

MAY 10, 2012

Mezzanine Financing Most companies that raise equity capital and are eventually acquired or go public receive multiple rounds of financing first. No right or wrong answer here, but if this is your vision then it's important to consider when negotiating deal terms on earlier stage financing rounds. Seed Funding 3.

Equity 88

Equity Mezzanine Later Stage Venture Capital 88

ReadWriteStart

JANUARY 28, 2022

These characteristics, comparable to those found in the fixed income market, can convert into common stock, call clauses, and other features. Warrants are a kind of equity that are often attached to a corporate bond issuance or preferred stock to make the transaction more appealing to investors. Equity for Employees.

Valuation 108

Valuation Equity Warrant Common Stock 108

Startup Company Lawyer

JULY 20, 2009

Once again, please keep in mind that the documents from typical online incorporation services do not contain IP assignment provisions in connection with the purchase of founders stock or separate IP assignment documents. Hiring employees or third party contractors.

IP 67

IP Stock Options Preferred Stock Capital Gains 67

Growthink Blog

APRIL 7, 2010

For those of you who don't understand the term "Series A," the Series A round is the name given to your first significant round of venture financing. The name "Series A" refers to the class of preferred stock that you sell to investors in return for their cash.

Angel Investor 54

Angel Investor Preferred Stock Common Stock Venture Capital 54

ithacaVC

DECEMBER 13, 2013

They are typically pretty simple: (i) shares owned by founders and (ii) shares authorized for issuance in a stock option pool, some of which may be issued to employees already and some of which will be available for future issuance. S0, being able to clearly state how many options you want to grant at the time of the financing is KEY.

Cap Table 67

Cap Table Pre-Money Valuation Option Pool Liquidation Preference 67

Startup Company Lawyer

FEBRUARY 21, 2010

Due to aggregate liquidation preferences that may exceed the acquisition price in an M&A deal, common stock may be rendered worthless. If you can’t figure this out yourself, you should probably build a liquidation preference spreadsheet to model how liquidation preferences work depending on M&A transaction value.

Retention 31

Retention Liquidation Preference Employee Common Stock 31

ithacaVC

FEBRUARY 23, 2011

The MCOP can serve a critical role as founders and other management team members are diluted down by rounds of financing or if their equity is not in the money. As the investors’ aggregate liquidation preference (ALP) increases typically the need for a MCOP also increases. A few key points to consider: 1.

Liquidation Preference 55

Liquidation Preference Management Preferred Stock Dividend 55

ithacaVC

JUNE 20, 2011

You need (or think you need) a stock option plan: granting stock options (and other forms of equity compensation to employees like restricted stock) should be done under a written equity incentive plan. And each award to a given employee requires a separate grant agreement laying out the terms of the grant.

Stock Options 58

Stock Options Vesting Subscription Agreement Founder Vesting 58

Scott Edward Walker

NOVEMBER 26, 2017

From a practical perspective, this means getting actively involved in your local tech community, regularly attending industry events and conferences, writing blog posts/articles, integrating yourself into communities on social networks and, of course, doing outstanding work as an employee (to develop a great reputation).

Term Sheet 63

Term Sheet San Francisco Founder Investment Bankers 63

www.mattbartus.com

DECEMBER 9, 2012

an option to purchase shares in the future at a pre-determined price) to the investor to purchase preferred stock at the Series A price. I just worked on a financing for a company that received a term sheet from a group of VCs at a $7 million pre-money valuation. Employees, Advisors & Consultants (12). July 2010 (2).

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40

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. such as incentive stock options.

LLC 61

LLC Stock Options Preferred Stock Stock 61

David Teten

MARCH 14, 2018

Another example is Correlation Ventures ($300M+ AUM), a VC firm which co-invests in financings with at least one other new outside VC. Andreessen Horowitz’s compromise: they have a half-dozen “ board partners ” who serve on the boards of their portfolio companies, representing A16Z, but who are not full-time employees of A16Z.

Private Equity 60

Private Equity Venture Capital Equity Cofounder 60

www.vccafe.com

MARCH 11, 2013

easy business finance software. BambooHR -Â Employee Records, Benefit Information, Payroll Data, etc. YCombinator Series AA Equity Financing Documents. Y Combinator : They provide a series of AA equity financing documents that are written with simpler words so start-up companies will have an easier starting point.

Software Review 53

Software Review Technical Review Israel Startup 53

Ben's Blog

JULY 16, 2013

First, if you did not understand how radically the fundraising environment might change, then there is no chance that your employees would have understood it. In fact, if you are like most companies, your managers probably implied to your employees that your stock price would only rise as long as you were private. Silly them.

Down Round 73

Down Round Marketing Preferred Stock Post-Money Valuation 73

Ben's Blog

JULY 16, 2013

First, if you did not understand how radically the fundraising environment might change, then there is no chance that your employees would have understood it. In fact, if you are like most companies, your managers probably implied to your employees that your stock price would only rise as long as you were private. Silly them.

Marketing 36

Marketing Preferred Stock Post-Money Valuation Down Round 36