Startup Professionals Musings

APRIL 8, 2015

One more key employee or one more investor will probably not turn the situation around. Calculate employee stock option values and vesting times, as well as salary. These questions are the key ones in every due diligence effort, always done by accredited investors, but almost never done by key employees and new partners.

Technical Review 120

Technical Review Due Diligence Sweat Equity Burn Rate 120

Startup Professionals Musings

APRIL 10, 2016

One more key employee or one more investor will probably not turn the situation around. Calculate employee stock option values and vesting times, as well as salary. These questions are the key ones in every due diligence effort, always done by accredited investors, but almost never done by key employees and new partners.

Sweat Equity 120

Sweat Equity Burn Rate Technical Review Intellectual Property 120

Startup Professionals Musings

APRIL 11, 2021

Early partners or co-founders often drop out of the picture early due to disagreements, and you forget about them, but they don’t forget about the verbal or email promises you made. Later, when your venture is trying to close on financing, or even going public, that forgotten partner surfaces, demanding their original share.

Cost 363

Cost Non-Compete Accredited Investor Cofounder 363

Both Sides of the Table

AUGUST 17, 2009

You can be talking with potential employees all along the process getting them excited. If you started the company yourself consider bringing on a “partner.&# By this I mean somebody who has a large and meaninful percentage of stock options – but nowhere near 50%. Founder vesting. Start building your team early.

Founder Vesting 365

Founder Vesting Intellectual Property Stock Options IP 365

Startup Professionals Musings

JANUARY 22, 2013

These shares are allocated and committed, but not really issued and owned (vested) until later. Typically, vesting in startups occurs monthly over 4 years, starting with the first 25% of such shares vesting only after the employee has remained with the company for at least 12 months (one year “cliff”).

Vesting 245

Vesting Common Stock Stock Founder Vesting 245

Startup Professionals Musings

MARCH 23, 2014

These shares are allocated and committed, but not really issued and owned (vested) until later. Typically, vesting in startups occurs monthly over 4 years, starting with the first 25% of such shares vesting only after the employee has remained with the company for at least 12 months (one year “cliff”).

Stock 256

Stock Vesting Common Stock Founder Vesting 256

Both Sides of the Table

FEBRUARY 20, 2019

just having a sparring partner with a vested interest in your success can be useful. The Limited Partners (LPs) who back funds don’t expect their dollars to be passive. The board also needs to be mindful of the interests of other “stakeholders” including debt holders, employees, customers and suppliers.

Venture Capital 236

Venture Capital Startup Angel Investor Silicon Valley 236

Startup Professionals Musings

MAY 8, 2022

Old co-workers or new friends with complementary skills usually make the best partners. Giving equity is realistic, but base it on contribution and role, with vesting after time and milestones. The right motivated employees dilemma. The founder’s title and role dilemma. Recognize that the best people don’t work for free.

Founder 325

Founder Hockey Stick Cofounder Liquidity Event 325

Both Sides of the Table

JUNE 18, 2015

Of course your friend’s company raised $50 million and offers it’s employees free kombucha and desk massages. And even this can’t stop their employees from fleeing after two years of vesting to move on to the next hot startup. For investors life is no different. You don’t need to be hot.

Software Review 150

Software Review Turkey Portfolio Syndicate 150

The Next Web

NOVEMBER 20, 2013

George Deeb is the Managing Partner at Chicago-based Red Rocket Ventures , a startup consulting and financial advisory firm based in Chicago. In this case, I would take your total ownership and divide it up by employee tiers. You can follow George on Twitter at @georgedeeb and @RedRocketVC. Is this person taking a salary or not?

Cofounder 136

Cofounder Equity Founder Seed Stage 136

Berkonomics

NOVEMBER 23, 2023

and here is the usual early-stage trap… First, a brand-new enterprise is often formed from the efforts of several “partners”, each with an expertise valued by the others. It is important to note that each grant to new or existing employees must be approved by the board before issue. Director level employees are typically granted ½%.

Equity 62

Equity Stock Options Vesting Early Stage 62

Reid Hoffman

DECEMBER 10, 2020

If I’m going to find out that a set of founders lack integrity, don’t behave like partners, take on unacceptable risks that might harm their customers or society, or simply aren’t the kinds of people I want to spend a decade with, I want to know those facts before I start down the path of evaluating that investment. I think David’s wrong.”.

Hosting 69

Hosting Hockey Stick IPO Silicon Valley 69

Gust

MARCH 16, 2014

These shares are allocated and committed, but not really issued and owned (vested) until later. Typically, vesting in startups occurs monthly over 4 years, starting with the first 25% of such shares vesting only after the employee has remained with the company for at least 12 months (one year “cliff”).

Stock 175

Stock Vesting Common Stock Founder Vesting 175

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

David Teten

OCTOBER 1, 2015

intrapreneurs, e.g., the employee of GE who is tasked with launching a new business. Partnering with a source of capital, connections, and expertise for a large equity chunk is often worth it in those scenarios (e.g., In those cases, the incentives for the founders and early employees are extraordinarily hard to align long term.

Software Development 60

Software Development Software Developers Software Review Technical Cofounder 60

Both Sides of the Table

MAY 5, 2011

I know it’s not single-handed as he has both fantastic partners at Foundry Group and many other community leaders. A key deal not only helps you raise venture capital but it can help attract employees, garner press attention, help with product focus & importantly drive customer adoption and/or revenue.

Seattle 317

Seattle Silicon Valley Technical Review Los Angeles 317

David Teten

DECEMBER 3, 2019

But in business, you want a lot of partners. In the private equity universe, most Partners have primary training as deal-makers, not as managers. Point Nine Capital uses 15Five for continuous employee feedback. See Bessemer Venture Partners’ A comprehensive guide to security for startups. 1) Manage the firm . 2) Market .

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

David Teten

SEPTEMBER 2, 2017

It’s hard enough to get a job at a venture capital or private equity firm; it’s even more complex to join as a Partner. Sean Seton-Rogers, Partner, Profounders Capital, breaks the conversation into three areas: Control: voting/veto for new deals, share of management company. So assessing fit is critical. What should the firm do?

Private Equity 60

Private Equity Venture Capital Equity Partner 60

Startup Professionals Musings

AUGUST 10, 2019

Old co-workers or new friends with complementary skills usually make the best partners. Giving equity is realistic, but base it on contribution and role, with vesting after time and milestones. The right motivated employees dilemma. The founder’s title and role dilemma. Recognize that the best people don’t work for free.

Hockey Stick 243

Hockey Stick Cofounder Liquidity Event Startup 243

Board Effect

OCTOBER 28, 2019

Often, this happens because someone has a vested interest such as money, status, knowledge or reputation that places them in a position where the position calls the objectivity of their decision-making into question. A conflict of interest can occur when one party stands to benefit because of their position with another party.

Non-Compete 40

Non-Compete Government Software Review Vesting 40

Startup Professionals Musings

OCTOBER 7, 2010

These shares are allocated and committed, but not really issued and owned (vested) until later. Typically, vesting in startups occurs monthly over 4 years, starting with the first 25% of such shares vesting only after the employee has remained with the company for at least 12 months (one year “cliff”). Vesting starts now.

Stock 214

Stock Vesting Common Stock Founder Vesting 214

www.mattbartus.com

SEPTEMBER 24, 2011

I can’t tell you how often a client calls me up and says something like this: “Matt, we have this great new consultant who is going to make introductions to us to [pick type of business partner]. We will grant him/her X% fully diluted shares up front, and every time he/she makes an introduction, he/she will vest in 100 shares.”

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

Both Sides of the Table

MAY 9, 2011

You often have very limited perspective on whether this person will continue to be a great partner 2 years down the line, 4 years down the line, 8 years down the line. You’re only going to find out whether they’re TRULY a great partner after you’ve put in years of money, blood, sweat & tears. Vested over 4 years.

Cofounder 393

Cofounder Founder Vesting Founder Vesting 393

Both Sides of the Table

MARCH 10, 2013

It is my job to be a sparring partner for teams not the decision maker. He had vested 18 months or so. I proposed that the CEO sit down with the CTO and walk him through the legal obligation of the company, which is zero notice, paying for all days worked and all accrued vacation time, and allowing vesting through that date.

Vesting 344

Vesting Cofounder Salary Sales 344

Hunter Walker

JULY 2, 2022

And if there’s a reason that they need to start 2+ months down the road, consider making them an employee sooner. Get them on your benefits, start vesting their stock and so on. Involve Their Family/Partners. Treat them as a team member who just isn’t there quite yet versus someone who hasn’t yet started.

Hiring 96

Hiring Vesting Early Stage Stock 96

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

Hunter Walker

OCTOBER 22, 2021

Show me the first 20 employees of a startup and I’ll tell you whether it’s going to be successful or not. Start their salary/vesting on the first day of the vacation and then let them be off for two weeks (this is worth it in extreme cases where you are really worried about the gap between them accepting and starting).

Hiring 152

Hiring Vesting Salary Naming 152

Berkonomics

SEPTEMBER 28, 2017

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. Each grant to new or existing employees must be approved by the board before issue. Director level employees are typically granted ½%. How about the price per share?

Early Stage 102

Early Stage Equity Stock Options Vesting 102

David Teten

MARCH 12, 2012

Our portfolio company BetterWorks cites a report by The World Economic Forum: “Employees are eight times more likely to be engaged when wellness is a priority in the workplace.” A pedometer is a great motivator and if all your employees are wearing them it sets up healthy competition.”

Product 166

Product Portfolio Venture Capital Vesting 166

The Next Web

AUGUST 26, 2013

Both ways are great, I’ve tried both, but personally I wouldn’t try to start something again without partners. Stefan Tirtey, Partner at Doughty Hanson Ventures , created this document with Berlin early stage investors. 10-20% for employees. But never give away shares without vesting. 60-70% for founders.

Management 120

Management Cofounder Startup Bootstrapping 120

Startup Professionals Musings

AUGUST 7, 2013

Early partners or co-founders often drop out of the picture early due to disagreements, and you forget about them, but they don’t forget about the verbal or email promises you made. Later, when your venture is trying to close on financing, or even going public, that forgotten partner surfaces, demanding their original share.

Non-Compete 235

Non-Compete Accredited Investor Startup Cofounder 235

Berkonomics

SEPTEMBER 13, 2010

As soon as any outside money is ingested into the corporation, others have a vested and legal interest in the behavior of officers entrusted with the best use of funds. Then along comes either money or contracts from strategic or financial investors or partners. The number of employees grows.

Covenant 59

Covenant Software Review Stock Options Vesting 59

Both Sides of the Table

MARCH 21, 2010

Think of it as similar to an employee stock option. Let’s say you give a warrant to a channel partner to sell your product. In the above example you might say that the channel partner earns 25,000 shares for every $100,000 of your product that they sell in the next 12 months with up to a cap of 250,000 shares.

Warrant 298

Warrant Dilution Startup Stock Options 298

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

Startup Professionals Musings

JULY 10, 2012

Early partners or co-founders often drop out of the picture early due to disagreements, and you forget about them, but they don’t forget about the verbal or email promises you made. Later, when your venture is trying to close on financing, or even going public, that forgotten partner surfaces, demanding their original share.

Non-Compete 249

Non-Compete Accredited Investor Cofounder Startup 249

Startup Professionals Musings

DECEMBER 14, 2014

Old co-workers or new friends with complementary skills usually make the best partners. Giving equity is realistic, but base it on contribution and role, with vesting after time and milestones. The right motivated employees dilemma. The Founder’s title and role dilemma. Recognize that the best people don’t work for free.

Hockey Stick 268

Hockey Stick Cofounder Entrepreneur Liquidity Event 268

www.seriesseed.com

DECEMBER 9, 2012

It would be helpful to get a California standard employee manual, employee contract/agreements, IP ownership release to company, and confidentiality. it is acquired) and (b) the employee is terminated without cause (or sometimes resigns for good reason). They are word docs so the.doc extension should work.

Finance 40

Finance Term Sheet Vesting LLC 40