Up and Running

DECEMBER 1, 2015

If you’re thinking about extending equity to an employee or a vendor (as in the example above), you should know that the topic is multi-faceted. If however you are giving a “normal employee” an incentive stock option plan (more on that later), that’s entirely different. Finding great employees first. What is equity compensation?

Equity 60

Equity Employee Stock Options Vesting 60

The Startup Magazine

FEBRUARY 11, 2024

Hire Qualified Drivers Just as hiring skilled and productive employees is vital for a startup, bringing on board qualified drivers with clean driving records and appropriate licenses reduces road risks substantially. Create a Driving Policy Each startup should create a meticulous driving policy tailored to its specific needs.

Technical Review 121

Technical Review Houston Dividend Startup 121

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 149

Programming Vesting Equity Software Review 149

Hunter Walker

FEBRUARY 20, 2024

Founder Vesting [Jared Hecht/USV] – Jared joined USV earlier this year and it’ll be interesting to see how his writing changes as he adds ‘institutional VC’ to his founder and angel investor knowledge. Stretching things out to a six-year vest helps to prevent co-founder abandonment.

Founder Vesting 62

Founder Vesting Vesting Cap Table Founder 62

Up and Running

JUNE 7, 2021

Today, however, we are witnessing a shift toward a more intrinsic motivation for both companies and their employees. The shift toward business models that embrace social responsibility raises questions about how financially sustainable it is to dedicate resources and employee energy to doing good in the world.

Framework 191

Framework United States Vesting Employee 191

Berkonomics

APRIL 4, 2024

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. The number of employees grows. Start-ups with one founder rarely have or need a board of directors. The operations of the corporation become more complex.

Covenant 48

Covenant Software Review Stock Options Vesting 48

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

Both Sides of the Table

AUGUST 17, 2009

One very important item from Chris’s original post that wasn’t picked up by Fred or Brad is founder vesting. Chris writes that early-stage deals should have: Founder vesting w/ acceleration on change of control. Without proper vesting you also place a risk on all other co-founders. I totally agree.

Founder Vesting 252

Founder Vesting Vesting Founder Term Sheet 252

Steve Blank

OCTOBER 24, 2017

The founders along with all the other employees would vest their stock over 4 years (earning 1/48 a month). Some founders have three-year vesting. This often is a way for founders and early employees to turn some of their stock into cash before an IPO or sale of company. Today, these are no longer hard and fast rules.

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Founder Technical Review CTO Hire IPO 278

K9 Ventures

OCTOBER 27, 2016

One of these norms is how founder vesting and employee vesting works. I won’t get into employee vesting today as that has much more to consider than I have time to cover in this short post today. Here is a good summary post from Cooley GO on Founder Vesting. The first is fairly obvious.

Founder Vesting 48

Founder Vesting Vesting Founder Term Sheet 48

Up and Running

OCTOBER 28, 2022

You have a vested interest in its success, which can provide you with the drive needed to overcome challenges and establish strong relationships with customers, vendors, suppliers, and so on. This may include things like rent, inventory, marketing, utilities, employee salaries, and so on.

Cost 138

Cost Startup Early Stage Vesting 138

The Next Web

OCTOBER 7, 2013

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? Startup employees are granted common shares out of something called an option pool. These common shares are granted to founders from the beginning, not employees.

Engineer 129

Engineer Dilution Option Pool Vesting 129

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. Once you have assembled a core team that is operating the business, you need to move from art to science in terms of granting employee equity.

Equity 64

Equity Employee CTO Hire Fractional CTO 64

SoCal CTO

NOVEMBER 1, 2010

And let’s be honest, most employees, advisors, etc. In a few cases it’s where I’m a co-founder of the business. For me to do either of these, I certainly need to really believe in the idea and it has to be something that won’t consume all of my time. who start with small equity percentages don’t end up making very much from startups.

Technical Cofounder 241

Technical Cofounder CTO Hire Equity Sweat Equity 241

OnlyOnce

SEPTEMBER 15, 2022

Short of declaring failure and shutting down your company, laying off employees is the worst thing you may have to do as a startup CEO. This isn’t firing for cause—employees aren’t being asked to leave because of their own failings. Cut more employees than you think you need to in order to reduce the risk of a second round of layoffs.

Salary 62

Salary Vesting Employee B2C 62

ConversionXL

NOVEMBER 6, 2019

Vested Technology spent $17k on their MVP. Vested Technology is a recruiting-automation platform that works alongside teams to identify, engage, and hire passive candidates. Prior to his role at Vested Technology, co-founder and CEO Akash Srivastava worked on Wall Street. He spent $17k to launch Vested Technology’s MVP.

Sweat Equity 78

Sweat Equity Software Review Vesting Cofounder 78

Feld Thoughts

SEPTEMBER 2, 2011

The founders each have common shares that will vest over four years. The vesting schedule protects each of the co-founders in case one gets hit by a bus or decides to drop the project after a short period of time. As first time entrepreneurs they did not create an employee options pool; we’ll fix that in a little while.

Cap Table 133

Cap Table CTO Hire Technical Cofounder Cofounder 133

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

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

NZ Entrepreneur

JUNE 9, 2022

Those in managerial roles have also learned what works and what does not as far as best practices to help employees thrive, stay connected and keep company culture intact. It’s certainly tested traditional management styles as managers continue to learn to trust people and ensure they are productive, meet deadlines and meet KPI’s with ease.

Vesting 105

Vesting Bandwidth Technical Review Video 105

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

SoCal CTO

MAY 4, 2010

- A Smart Bear: Startups and Marketing for Geeks , April 19, 2010 5 Tips On VC Alignment: Discuss The Exit Before You Enter - OnStartups , April 29, 2010 Founder Agreements – Vesting, Vesting and more Vesting - High Contrast , April 25, 2010 Web Sites and Books for Novice Programmers - Feld Thoughts , April 25, 2010 Adding a Co-Founder In 140 Characters (..)

CTO Hire 150

CTO Hire Vesting Venture Capital Startup 150

Mike Michalowicz

JULY 26, 2017

Social entrepreneurship can actually boost your employee retention rate and their productivity. By blending your company’s for-profit goals with larger societal goals, your employees will feel more accomplished and satisfied with how they’re using their time. Something that translates into more than just a 9-to-5 job. Hotel bottles.

Vesting 106

Vesting Software Review Retention Community 106

Both Sides of the Table

AUGUST 17, 2009

You can be talking with potential employees all along the process getting them excited. Founder vesting. Yesterday I wrote a blog posting on founder vesting (see here ). You should implement restricted stock with vesting at the earliest stages in your company -even before the VC’s ask.

Founder Vesting 365

Founder Vesting Intellectual Property Stock Options IP 365

Berkonomics

MAY 23, 2024

Give one percent equity to each outside board member vesting over two to four years of service. Pay early-stage board members of companies that are not lifestyle businesses one percent of the fully diluted equity in the form of an option that vests over two to four years of service. How do you set the option price?

Early Stage 62

Early Stage Vesting Stock Options Preferred Stock 62

Scott Edward Walker

SEPTEMBER 28, 2011

Vesting Restrictions. The first deadly mistake relates to vesting restrictions. In addition, sometimes a portion of the shares will be deemed to be vested “up front” – meaning that they are not subject to vesting — particularly where a founder has made a significant contribution prior to the company’s incorporation.

Vesting 89

Vesting Software Review IP Intellectual Property 89

ConversionXL

NOVEMBER 6, 2019

Vested Technology spent $17k on their MVP. Vested Technology is a recruiting-automation platform that works alongside teams to identify, engage, and hire passive candidates. Prior to his role at Vested Technology, co-founder and CEO Akash Srivastava worked on Wall Street. He spent $17k to launch Vested Technology’s MVP.

Sweat Equity 50

Sweat Equity Software Review Vesting Cofounder 50

Startup Professionals Musings

JULY 1, 2022

By the way, you will normally only be offered “options,” which vest over a 4-year period after a 1-year “cliff.” Many employees forget that there isn’t even a market for startup stock, until after the company has gone public, which hasn’t happened positively to many companies in the last few years.

Stock Options 343

Stock Options Advisory Board Stock Startup 343

Startup Lessons Learned

MARCH 3, 2009

Lessons Learned by Eric Ries Tuesday, March 3, 2009 Employees should be masters of their own time Every startup should have a culture of learning. The rule is simple: every employee is 100% responsible for how they spend their time. The suggestion is that you implement one single company-wide rule. I asked why.

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Employee San Francisco Lean Software Review 146

YoungUpstarts

OCTOBER 13, 2015

Consequently, we should be paid employees of the company. Furthermore, as a company, we should pay all the taxes for our employees on time and in correct form. It is our responsibility as founders to carry out the payment of taxes, insurance, and everything that is necessary when it comes to the law and new employees.

Delaware 100

Delaware Technical Review United States Vesting 100

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

Steve Blank

MAY 19, 2015

While the company had a great plan for keeping the top executives, and had all the startup perks like free food and dogs at work, they had spent little time thinking about the organization debt accruing with first 100 employees who had built the company underneath them. Identify the employees they wanted to keep. the company had.

Technical Review 120

Technical Review Salary Early Stage Software Review 120

Startup Professionals Musings

APRIL 11, 2021

This problem can be avoided by incorporating immediately after early discussions, and issuing shares to the Founders, with normal vesting and other participation rules. Do the same for every business partner or employee you may hire. Trouble with the IRS over Founders stock value.

Cost 363

Cost Non-Compete Accredited Investor Cofounder 363

YoungUpstarts

APRIL 19, 2019

They also explain why a lean manufacturing expert can walk into a manufacturing plant and quickly spot opportunities to increase efficiency by reducing work-in-process inventory that plant employees missed. Consultants aren’t immune to bias, but, as outsiders, they don’t have a vested interest in solutions and recommendations.

Non-Compete 113

Non-Compete Vesting Boston Agile 113

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. Director level employees are typically granted ½%. How about “vesting” shares over time ? Options typically are earned over time, which we call vesting.

Equity 62

Equity Stock Options Vesting Early Stage 62

Startup Professionals Musings

MAY 8, 2022

Giving equity is realistic, but base it on contribution and role, with vesting after time and milestones. The right motivated employees dilemma. You have very little money, and you don’t want to give away your equity. Recognize that the best people don’t work for free. The right investors and right time dilemma.

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Founder Hockey Stick Cofounder Liquidity Event 325