Eric Friedman

DECEMBER 27, 2021

4/ Streaming equity – venture funds + employee stock becomes more liquid. The calculus is that if the stock is going to be worth a fortune, they are better off paying for expertise early vs. take a risk on early full time employees risking option pool, culture fit, and ramp time. cash + stock vs. FTEs. out of 10!

Balance Sheet 97

Balance Sheet Stock Private Equity Option Pool 97

The Next Web

SEPTEMBER 30, 2014

Dealing almost exclusively with first time startup founders, we tackle the following question with nearly all of our CEOs: How much equity should they give to the employees? In one instance, I told a CEO that we typically recommend a 15 percent stock options pool at seed/Series A stage. She rolled her eyes in disbelief.

Equity 154

Equity Employee Option Pool Stock Options 154

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. Strike price of options: meaningless.

Equity 62

Equity Employee Founder CTO Hire 62

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. However, if you are thinking about compensating non-employees with equity, make sure to consider the following points: 1.

Equity 116

Equity Stock Options Vesting Stock 116

Up and Running

SEPTEMBER 20, 2021

Total share ownership is the sum of the common stock, stock options, preferred stock, and any other stock category for a single individual. Here you can see that the founders own most of the shares at 67.7%, then the ESOP (employee stock option pool) at 12.31 Outline your plans for future employee stock option pools.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

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

crowdSPRING Blog

NOVEMBER 15, 2013

Model Equity Calculator for Founders with Option Pool Expansion – crowdspring.co/1fwUdsA. Good to see Microsoft axe its controversial employee-ranking system | The Verge – crowdspring.co/1eIX1Fn. How Content Marketing Can Help Grow Your Business in 2014 – crowdspring.co/1gNMc5E. LED bulbs aren’t cool.

Social Media 93

Social Media Small Business Design Media 93

Agile VC

APRIL 17, 2011

5) High Productivity: Kayak had 148 employees at the end of 2010. That means that Kayak generates roughly $1.15M in revenue for each employee which puts it in the same league as Google and Apple (both >$1M/head). So these three companies account for about half Kayak’s revenues today. as of 12/31/09).

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

Hunter Walker

AUGUST 7, 2017

But employee option pool is important enough that I wanted to briefly expand upon my comment above. As you can see, Weekend VC Twitter gets pretty wild and crazy!!!!

Equity 96

Equity Pre-Money Valuation Option Pool Founder 96

Berkonomics

NOVEMBER 23, 2023

It is important to note that each grant to new or existing employees must be approved by the board before issue. Pricing your options: The price per share for option grants is also an important consideration. Inducing a new CEO to come aboard usually means creation of a stock option package of 5-8%.

Equity 62

Equity Stock Options Vesting Early Stage 62

Both Sides of the Table

AUGUST 17, 2009

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. You can be talking with potential employees all along the process getting them excited.

Founder Vesting 365

Founder Vesting Intellectual Property Stock Options IP 365

The Next Web

OCTOBER 21, 2013

More often than not, these companies have no formal option pool, although many have either formal or informal promises to grant options to key employees. While there are no hard and fast rules, when we make a Series A investment we expect to own around 20% of the company on a fully-diluted basis.

Cap Table 128

Cap Table Option Pool Angel Investor Entrepreneur 128

View from Seed

DECEMBER 4, 2014

You don’t really need to worry about how much common stock will be set aside for an employee option pool or how much preferred stock might be issued from raising future VC rounds in order to determine an equitable founder stock division.

Equity 315

Equity Founder Sweat Equity Cofounder 315

Eric Friedman

DECEMBER 30, 2020

4/ Streaming equity – venture funds + employee stock becomes more liquid. The calculus is that if the stock is going to be worth a fortune, they are better off paying for expertise early vs. take a risk on early full time employees risking option pool, culture fit, and ramp time. cash + stock vs. FTEs.

Stock 120

Stock Private Equity Option Pool LP 120

www.inc.com

SEPTEMBER 24, 2011

Employee Benefits. 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 a 50-employee provider of e-marketing solutions to small and midsize businesses, based in Needham, Mass. "We Business Taxes.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

Agile VC

DECEMBER 4, 2014

You don’t really need to worry about how much common stock will be set aside for an employee option pool or how much preferred stock might be issued from raising future VC rounds in order to determine an equitable founder stock division.

Cofounder 255

Cofounder Equity Founder Sweat Equity 255

Business Plan Blog

NOVEMBER 20, 2013

You also need to think about how much equity you want to have set aside and available for your future employees in your option pool. Future investors will want and option pool, and more importantly it is ways of attracting talented employees to your startup.

Equity 61

Equity Option Pool Cofounder Vesting 61

Berkonomics

SEPTEMBER 28, 2017

If there are 85,000 shares issued to the founders, then a plan calling for 15,000 shares in a pool reserved for future hires is appropriate, making the fully diluted shares 100,000. Each grant to new or existing employees must be approved by the board before issue. That size of grant would take much or most of the option pool.

Early Stage 102

Early Stage Equity Stock Options Vesting 102

David Teten

DECEMBER 3, 2019

Point Nine Capital uses 15Five for continuous employee feedback. The Long Term Stock Exchange is building out a set of tools for founders for managing their cap tables, 409A valuations, cash on hand, options pool, investor relations, etc. I’ve seen other VCs use Bridge to more efficiently make and track introductions. .

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Agile VC

DECEMBER 4, 2014

You don’t really need to worry about how much common stock will be set aside for an employee option pool or how much preferred stock might be issued from raising future VC rounds in order to determine an equitable founder stock division.

Cofounder 173

Cofounder Equity Founder Sweat Equity 173

www.payne.org

SEPTEMBER 22, 2011

Startup Equity For Employees. 5 Stock vs Options. NOTE: If youre an attorney or tax accountant with experience helping startup employees with stock and option issues, drop me a note. The preferred stock held by investors has (as the name implies) more rights and privileges than the common stock issued to employees.

Equity 56

Equity Employee Vesting Preferred Stock 56

venturehacks.com

FEBRUARY 24, 2010

The best sellers can sell to customers, partners, investors, and employees. Breakups are hard If you’re going to fall out with your co-founder, do it early, recover the equity into the option pool to keep the company going, and recruit someone else great to fill the missing slot. Build in founder vesting (a.k.a.

Cofounder 101

Cofounder Founder Technical Cofounder Technical Review 101

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. And don’t forget that the options granted would come out of the available option pool.

Cap Table 67

Cap Table Pre-Money Valuation Option Pool Liquidation Preference 67

Business Plan Blog

SEPTEMBER 18, 2012

The final figure will depend on the client’s situation, including the number of employees of the company and the amount of capital that it hopes to eventually raise. Whatever the percentage, it pays to plan ahead.

Stock Options 61

Stock Options Stock Option Pool Dilution 61

techcrunch.com

FEBRUARY 25, 2010

You could make the same argument about acquisitions and option pools. As Mark Suster recently noted , employees will never see a big payday at most startups unless the company shoots for the moon. The remaining 95 employees split 7%, each earning $27,000. Each executive gets $5 million. But the reverse is happening.

Liquidation Preference 63

Liquidation Preference Founder Option Pool Acquisition 63

Austin Startup

JANUARY 25, 2020

Working in the office Also, when I first came back to NYC, I realized I needed to get some kind of office space for the team.

Delaware 62

Delaware SEC New York City New York 62

Genuine VC

FEBRUARY 28, 2011

So optimizing a startup offer involves not just one key figure – salary – but also the option package. Nearly all startup employees receive a number of options figure in their offer. ” The details surrounding stock options are often complex and confusing for non-financially-oriented individuals.

Startup 121

Startup Equity Vesting Salary 121

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. Theres only common stock at this stage.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Hunter Walker

MAY 7, 2014

Hiring a Head of Product as one of your first 10 employees? Building a senior team but pushing back on having a healthy employee option pool? That’s not healthy for a startup. Unless you’re purely a business founder we want to see product vision and leadership on the founding team, not hired on.

Hiring 111

Hiring Option Pool Early Stage Term Sheet 111

Both Sides of the Table

NOVEMBER 4, 2009

He’d be employee number 3. When we next spoke he had found out that the CEO had about 5% and there was no management option pool in place. The company was being spun out of a larger company. I asked him how much of the company would be owned by the parent company and how much would be owned by management.

Stock Options 418

Stock Options Stock Liquidation Preference Option Pool 418

Hippoland

APRIL 10, 2016

But, Ada wants to split the equity 50% her, 20% Bob and 20% me with a 10% option pool. To have so much stock locked up that could be allocated to serious contributors including future employees / co-founders is a bad sign. We are trying to decide how much equity to allocate to each person.

Cofounder 48

Cofounder Cap Table Equity Vesting 48

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

Professor VC

JANUARY 17, 2008

There needs to be enough equity to go around for founders, early investors, later investors, and employees. At a $1 million, pre-money, with an investment of $500K, that would leave 67% of the company for the founders and initial option pool.

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

Berkonomics

MAY 12, 2010

If there are 85,000 shares issued to the founders, then a plan calling for 15,000 shares in a pool reserved for future hires is appropriate, making the fully diluted shares 100,000. Inducing a new CEO to come aboard usually means creation of a stock option package of 5-8%. Director level employees are typically granted ½%.

Early Stage 85

Early Stage Equity Stock Options Vesting 85

venturehacks.com

MARCH 21, 2008

Or they bring you a handful of great employees. Many advisors want options they can exercise immediately —that’s fine. If your company hasn’t raised a Series A, increase the advisor’s equity by roughly 30%-50% to account for dilution from seed investors, Series A investors, option pools, swimming pools, and the like.

Advisory Board 44

Advisory Board Cap Table Vesting Equity 44

Tim Keane

JANUARY 12, 2010

Especially in situations where the founders have a large position and are key employees, it is not uncommon for investors to request that they agree to have some portion of their holdings vest on a schedule. Other major term-sheet provisions, in addition to these economic considerations, also focus on reducing investor risk.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

www.mattbartus.com

DECEMBER 9, 2012

You have a 20% option pool, so you know this will take your ownership down from 80% to 60%, and the VC will get 25%. Option Pool. Option Pool. Employees, Advisors & Consultants (12). Take a look at the numbers: Pre-Money. Post-Money. Series A. -. Post-Money. Series A. -. Warrants. -. 10,000,000.

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40