www.paulgraham.com

OCTOBER 23, 2010

Standards arehigher; people are more sympathetic to what youre doing; the kindof people you want to hire want to live there; supporting industriesare there; the people you run into in chance meetings are in thesame business. They might accidentally hire someonebad, but its not going to kill the company. Idont think theres an answer.

Startup 108

Startup Software Review Hiring Silicon Valley 108

www.avc.com

SEPTEMBER 22, 2011

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. For your first key hires, three, five, maybe as much as ten, you will probably not be able to use any kind of formula. First, a caveat.

Equity 64

Equity Employee CTO Hire Fractional CTO 64

thinkspace.com

SEPTEMBER 7, 2012

How long should people vest – four years? Investors routinely subject founder shares to vesting, but there is no rule that says that founders cannot, or should not, impose vesting on themselves. And the vesting doesn’t necessarily need to be time-based either. Five years? Buffer Pin It Digg Digg.

Equity 62

Equity Employee Founder CTO Hire 62

Altgate

JUNE 25, 2012

One who attracted much attention is David Choe, the graffiti artist hired to paint the company’s first headquarters. Mark Pincus of social gaming company Zynga recently confronted a similar problem when he tried to reclaim equity that he felt he had over-allocated to some early hires. They fail to include vesting terms (i.e.,

Equity 44

Equity Vesting Cap Table Technical Review 44

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

Ben's Blog

APRIL 28, 2010

Looking across these nearly 50 companies, the study finds that founding CEOs consistently beat the professional CEOs on a broad range of metrics ranging from capital efficiency (amount of funding raised), time to exit, exit valuations, and return on investment. If you do, hire him! In the best case, you may find the next John Morgidge.

Technical Review 78

Technical Review Cofounder Technical Cofounder Software Review 78

venturehacks.com

MARCH 21, 2008

Advisor compensation Whether you’re hiring a normal advisor or super advisor: Advisory shares are usually issued as common stock options. The options typically vest monthly over 1-2 years with 100% single-trigger acceleration and no cliff. Does this stake need to have vesting schedule?

Advisory Board 44

Advisory Board Cap Table Vesting Equity 44

David Teten

DECEMBER 3, 2019

The reports showcase raw data, analytics, visualizations, and benchmarking statistics on the company from dozens of sources, including team, intellectual property, technology, product, financial, banking, marketing, customer, risk, valuation, and investment information.”. ff Venture Capital hired two full-time engineers to build out Totem.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Both Sides of the Table

MAY 13, 2013

Chief Vesting Officers)? The Aqui-hire Business. Hire legions of young, impressionable graduates from the top engineering universities. I’m supposed to believe that my best innovation can only come from scores of startup founders who just made millions and have now become CVOs at my company? Go do a startup. Woo the press.

Liquidation Preference 357

Liquidation Preference Early Stage Retention Lock-up Period 357

Startup Professionals Musings

JULY 10, 2012

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.

Non-Compete 249

Non-Compete Accredited Investor Cofounder Startup 249

Startup Professionals Musings

MAY 2, 2011

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.

Non-Compete 246

Non-Compete Accredited Investor Entrepreneur Cofounder 246

Altgate

AUGUST 25, 2012

One who attracted much attention is David Choe, the graffiti artist hired to paint the company’s first headquarters. Mark Pincus of social gaming company Zynga recently confronted a similar problem when he tried to reclaim equity that he felt he had over-allocated to some early hires. They fail to include vesting terms (i.e.,

Equity 28

Equity Vesting Cap Table Technical Review 28

Startup Professionals Musings

AUGUST 7, 2013

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.

Non-Compete 235

Non-Compete Accredited Investor Startup Cofounder 235

Austin Startup

AUGUST 20, 2017

Hiring is a chapter unto itself, but it deserves to lead off any discussion of context. Compensation decisions obviously affect hiring and retention. You can’t be too careful in determining comp packages for your new hires. Keep the valuations consistent with company progress. Let’s look at some specifics: 1.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

www.inc.com

SEPTEMBER 24, 2011

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 As you think about how much equity to offer, have a reasonable valuation in mind thats been determined using professional advice. Consult your lawyer for details.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

Gust

NOVEMBER 4, 2011

Entrepreneurs and investors who have spent any time dealing with convertible debt seed financing transactions are likely to have encountered the subject of valuation caps. Valuation caps can come into play in settings other than seed-stage convertible note financing rounds. Read on for a fuller explanation. by February 2006).

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

discuss.joelonsoftware.com

NOVEMBER 1, 2010

Im confident that this business will be able to compensate these two additional principles along the way, after initial risk of investing their time, and will later reward their vesting with an exit strategy. This isnt really a start-up team-- Ive been doing the business for 14 years. The key here is motivation.

Sweat Equity 40

Sweat Equity Equity Angel Investor Affiliate 40

Scott Edward Walker

NOVEMBER 2, 2011

Set-up vesting schedules for the founders (see post here ) and file 83(b) elections with the IRS (see #3 here ). If you hire any employees, make sure you don’t misclassify them as an independent contractor or fail to pay them at least the minimum wage (see post here ). Button-down IP ownership and assignment issues (see post here ).

Accredited Investor 111

Accredited Investor Stock Options Delaware Silicon Valley 111

Eric Friedman

JUNE 27, 2016

This is the classic “hire people smarter than you” which is harder said than done. Total = 0.75% for 3 advisors that vest as you see fit to help you over the next 1–4 years (more on vesting below). Vesting Schedules. Advisors typically ask to vest in equal installments over 48 months. 25% for regular advisors, .25-.50%

Equity 98

Equity Vesting Cap Table Common Stock 98

Startup Professionals Musings

APRIL 19, 2010

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.

Non-Compete 125

Non-Compete Accredited Investor Startup Cofounder 125

Up and Running

SEPTEMBER 20, 2021

For instance, the cap table will help you with various possibilities while running business activities like available options and pre-money valuations faster. This can be helpful when you are hiring a COO for the company, and the candidate asks to get percentage ownership in the company. One of these terms is the valuation cap, ie.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

Hunter Walker

JUNE 7, 2022

And with the tech valuation reckoning underway, if you’ve been RIF’ed you’re not alone. The ‘average’ startup offers a 90 day period post employment where you have to exercise any vested stock options before forfeiting them back to the company. The Things to Know When You Lose Your Job In A Downturn. RIF aka reduction in force.

Stock Options 123

Stock Options Vesting Stock Valuation 123

Up and Running

OCTOBER 13, 2022

Before hiring an advisor, be sure to look into their years of service, legal fees, and track record in successfully establishing growth-oriented ESOPs. You need to decide what kind of plan you want, how much stock you want to buy, how many employees will be included in the plan, and what kind of vesting schedule there will be.

Vesting 88

Vesting Stock Valuation Stock Options 88

venturehacks.com

OCTOBER 21, 2010

Use a hiring plan to justify a small option pool, increase your share price, and increase your effective valuation. 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.&# Don’t lose this game. share to $1.00/share:

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68

ithacaVC

DECEMBER 13, 2013

The share price is calculated by taking the pre-money valuation and dividing it by the number of shares outstanding pre-money. So Share Price (SP) = Pre-Money Valuation (PMV) / Shares Outstanding (SO). That is normal for a pre-money % as it will drop down to about 10% post money depending on size of round and valuation.

Cap Table 67

Cap Table Pre-Money Valuation Option Pool Liquidation Preference 67

www.payne.org

SEPTEMBER 22, 2011

4 Vesting. 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. You usually dont get all of your stock up front; it vests over a period of time, starting from your first day at work.

Equity 56

Equity Employee Vesting Preferred Stock 56

Scott Edward Walker

OCTOBER 27, 2015

Set-up vesting schedules for the founders (see post here ) and file 83(b) elections with the IRS (see #3 here ). If you hire any employees, make sure you don’t misclassify them as an independent contractor or fail to pay them at least the minimum wage (see post here ). Button-down IP ownership and assignment issues (see post here ).

Intellectual Property 40

Intellectual Property Accredited Investor Vesting Delaware 40

Austin Startup

SEPTEMBER 19, 2017

A strong advisor can walk you in the door to the same number of companies as 2–3 new sales hires. This amount should vest over some period of time — 2 years is typical — and should be subject to the completion of concrete goals and commitments. Never discount the power of a warm intro.

Advisory Board 48

Advisory Board Sweat Equity Marketing Vertical 48

Hunter Walker

DECEMBER 18, 2015

Even in successful companies, most initial equity grants will be worth a few hundred thousand dollars to perhaps $1-2m, when fully vested. Not the company valuation, or ownership percentage or even grant price! You join at an executive level pre-IPO for a company that already has huge potential. Assume you get.25%

Equity 48

Equity Employee IPO Vesting 48

venturehacks.com

SEPTEMBER 22, 2011

Offers from top-tier firms increase your valuation. In practice, you raise money or hire an employee because you need to, not because you want to. Say the equity equation tells you to pay a prospective hire above market. You should still pay the hire a market rate and save the company some equity. If no, she is a no hire.

Equity 40

Equity Cap Table Valuation RSS 40

thestartuplawyer.com

FEBRUARY 24, 2010

Who must be a co founder and who can remain a hired principal? When I find, and hire on options, the three perfect CEs/directors must I consider them co founders and treat them accordingly? Who must be a co founder and who can remain a hired principal? He obviously never launched a startup and got shafted by a co-founder.

Cofounder 40

Cofounder Founder Preferred Stock Startup 40

Austin Startup

DECEMBER 10, 2017

My friend is actually building his own house, down to hiring the day laborers and all the trades, procuring all the materials, and supervising every step of the process. We raised significant capital at a high valuation based on his credibility, and he certainly was entitled to call the shots on decisions like that.

Georgia 48

Georgia Startup Incubator Harvest 48

www.readwriteweb.com

FEBRUARY 23, 2010

3: Hire Your Boss : Make sure you hire people that you would want to work for, who challenge you and you can learn from. Stay involved in the hiring process as long as you possibly can. I find people hiring people they feel they can manage. For small companies, once a week; for larger companies, maybe twice a month.

Entrepreneur 69

Entrepreneur Venture Capital San Francisco New Zealand 69