The Startup Toolkit

FEBRUARY 15, 2013

false As a cheatsheet, the “normal” equity structure is: Founder terms: 4 year vesting, 1 year cliff, for everyone, including you. 2.0% ) : 4 year vesting, optional cliff, full acceleration on exit. When it comes to equity terms, there are only 3 things to understand: vesting, cliffs, and acceleration. Cliffs & vesting.

Vesting 56

Vesting Equity Cofounder Technical Review 56

Startup Professionals Musings

AUGUST 9, 2020

Even with an agreed initial equity split, it’s smart to have Founder’s stock actually issue or vest over a period of at least two years, on a month-by-month basis. Obviously it should be amended later, as roles are more clearly defined, and execution proceeds.

Cofounder 435

Cofounder Technical Cofounder Equity Intellectual Property 435

Eric Friedman

NOVEMBER 18, 2022

An underutilized action by founders is canceling their vesting due to lack of interaction or help with your company. Lean on the questions and comments here as a way to provide a framework for the conversation, a guide for equity and vesting, and a place you can both reference. How does vesting equity with an advisor work?

Early Stage 103

Early Stage Equity Vesting Cap Table 103

Startup Professionals Musings

MAY 22, 2020

Calculate employee stock option values and vesting times, as well as salary. Since nine out of ten startups fail completely, serious investors look for a 10X return on their investment within five years. Look for examples of similar companies and revenue multiples achieved from acquirers.

Technical Review 436

Technical Review Due Diligence Sweat Equity Burn Rate 436

Startup Professionals Musings

SEPTEMBER 27, 2023

This is the purpose of a vesting schedule, which issues allocated stock over time. Typically, vesting in startups occurs monthly over four years, starting with the first 25 percent of shares vesting only after an owner has remained active for at least 12 months (one year cliff ). Key founder vesting should have no cliff.

Stock 240

Stock .Net Vesting Founder Vesting 240

Startup Professionals Musings

FEBRUARY 18, 2023

Calculate employee stock option values and vesting times, as well as salary. Since nine out of ten startups fail completely, serious investors look for a 10X return on their investment within five years. Look for examples of similar companies and revenue multiples achieved from acquirers.

Sweat Equity 207

Sweat Equity Burn Rate Technical Review Intellectual Property 207

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

The Startup Magazine

JULY 12, 2024

Optimize Hanger Space: Hanging solutions can help declutter and efficiently store uniforms, tactical vests, and other gear that personnel can hang. These containers save space by allowing you to stack multiple bins on each other and offer ease of access due to their hinged lids that stay open when required.

Vertical 114

Vertical Vesting Technical Review Design 114

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

SoCal CTO

SEPTEMBER 27, 2011

Unlike the founders, the employees have to wait until their grants vest, working at a company no longer of their choosing for two years. Stock vests for 4 years. Oh, and one last thing, make sure you figure this out upfront, you have it vest, you have ways to get it back, etc. Is it Time for You to Earn or to Learn?

Early Stage 391

Early Stage Equity CTO Hire Sweat Equity 391

Startup Professionals Musings

JANUARY 15, 2021

This is the purpose of a vesting schedule, which issues allocated stock over time. Typically, vesting in startups occurs monthly over four years, starting with the first 25 percent of shares vesting only after an owner has remained active for at least 12 months (one year cliff ). Key founder vesting should have no cliff.

Vesting 298

Vesting Dilution Stock Founder Vesting 298

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

The Startup Lawyer

JANUARY 27, 2018

One of the most asked questions I receive when setting up new startup companies is “Do my vesting shares have any voting rights?” ” Or in other words, does a stockholder only get to vote based on their amount of vested shares?

Vesting 52

Vesting Founder Startup 52

The Next Web

JULY 21, 2013

This is why vesting is so important. Investing in vesting. Vesting means that at the very beginning each founder gets his or her full package of stocks at once to avoid getting taxed for capital gains; but, the company has the right to purchase a percentage of the founder’s equity in case he or she walks away. An example.

Vesting 143

Vesting Founder Chile Equity 143

SoCal CTO

NOVEMBER 1, 2010

Thirty more articles related to this: How To Calculate Sweat Equity - Get Venture: Venture Made Transparent , February 11, 2010 How Much Equity a Technical Cofounder Should Get - Nathan Hurst , July 19, 2010 When You Should Hire a Dev Shop (other than “never”) - Brad Hargreaves , March 7, 2010 Make Sure Sweat Equity Vests - Get Venture: Venture Made (..)

Technical Cofounder 241

Technical Cofounder CTO Hire Equity Sweat Equity 241

Startup Professionals Musings

SEPTEMBER 10, 2018

Even with an agreed initial equity split, it’s smart to have Founder’s stock actually issue or vest over a period of at least two years, on a month-by-month basis. Obviously it should be amended later, as roles are more clearly defined, and execution proceeds.

Equity 238

Equity Cofounder Technical Cofounder Intellectual Property 238

VC Adventure

AUGUST 16, 2020

My background thesis inherent in this is that employees with options should continue to vest new option as they continue to work for your business. The grant would begin vesting on the employee’s 4th anniversary and will vest monthly over 4 years. I think this is both practical and fair.

Programming 149

Programming Vesting Equity Software Review 149

The Startup Magazine

AUGUST 19, 2022

To keep workers as safe as possible, it’s necessary to invest in and police proper safety gear wear like helmets, vests, gloves, goggles, masks and toe guards. People can fall from great heights and something can fall on them from great heights.

Operations 122

Operations Technical Review Mobile .Net 122

The Startup Magazine

SEPTEMBER 11, 2023

For instance, managerial staff might wear branded blazers, while field workers might have branded high-visibility vests. Can branded workwear be customised for different roles within a company? Absolutely, different roles may require varied attire. Customisation ensures each employee has workwear suited to their role.

Technical Review 133

Technical Review Startup Vesting Employee 133

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

Austin Startup

DECEMBER 9, 2019

Another red flag is when a SIC member asks for equity in your company upfront, without any performance vesting standards. Rule Number Two: when giving equity, it should always vest over time for performance tied to measurable goals such as sales or results that move your KPIs. This is a bad deal for you, if you take it.

Vesting 72

Vesting Early Stage Seed Capital Equity 72

The Next Web

OCTOBER 7, 2013

It is typical for employees to vest their options over four years with a one year cliff, which means a new hire must stay on the company for at least one year to see any shares. After a year, shares will vest in monthly or quarterly splits until the full grant is vested. How do you feel about that number?

Engineer 129

Engineer Dilution Option Pool Vesting 129

The Startup Magazine

FEBRUARY 11, 2024

Recognizing this concept spotlights the vested interest startups possess in comprehensively training, monitoring and reinforcing safe driver decision making – the frontline defense against costly liability triggered by poor worker choices resulting in collision damage, injuries or worse.

Technical Review 124

Technical Review Houston Dividend Startup 124

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. Start-ups with one founder rarely have or need a board of directors. In fact, such a board would seem out of place in a one-person company.

Covenant 48

Covenant Software Review Stock Options Vesting 48

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. Praveena is just like the other two founders, where her equity will vest over 4 years. Time to update the cap table.

Cap Table 133

Cap Table CTO Hire Technical Cofounder Cofounder 133

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

Both Sides of the Table

AUGUST 17, 2009

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 is an insurance policy for all team members involved. Teams create companies – not individuals.

Founder Vesting 365

Founder Vesting Intellectual Property IP Stock Options 365

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

SiliconHills

MAY 14, 2015

Vested Finance, an Austin-based financial technology startup, announced it has closed on $5 million in seed financing led by Sandleigh Ventures. The Austin-based company plans to use the money to expand its operations by hiring a development team to create and distribute its mobile app.

Vesting 48

Vesting Finance San Francisco Washington 48

Scott Edward Walker

FEBRUARY 1, 2014

Mistake #3 : not setting-up vesting schedules (at 17:19). Mistake #3: Not Setting-Up Vesting Schedules. Vesting schedules must be established to protect the other co-founders (plus, VC’s will typically require them). Typical vesting schedule: four years on a monthly basis. Up-front vesting possible.

Software Review 111

Software Review Delaware Accredited Investor Due Diligence 111

Scott Edward Walker

FEBRUARY 1, 2014

If you would like to jump to different sections of the video, here’s how it breaks down: Mistake #1: forming the wrong entity (at 1:25) Mistake #2: not buttoning-down IP ownership issues (at 10:20) Mistake #3: not setting-up vesting schedules (at 17:19) Mistake #4: not complying with applicable securities laws (at 29:21) Mistake #5: not doing (..)

Software Review 111

Software Review Delaware Accredited Investor Due Diligence 111

Scott Edward Walker

FEBRUARY 6, 2016

“I didn’t even know what a vesting schedule was… [and] that mistake probably cost me billions of dollars.” Indeed, the failure to set-up vesting schedules is now the most common mistake I see startups make. This is exactly what would happen without vesting schedules. www.youtube.com/watch?v=-R01YcgJ3Yw. v=-R01YcgJ3Yw.

Vesting 40

Vesting Cofounder Equity Dilution 40

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. Your own personal funds will get you only so far.

Cost 138

Cost Startup Early Stage Vesting 138

Board Effect

OCTOBER 19, 2020

A conflict of interest exists when a board member, officer, staff member, or volunteer has a vested interest in money, status, relationships, or reputation that has the potential to compromise their actions, judgment, or decision-making. A conflict occurs when you have a vested interest (i.e.

Vesting 83

Vesting Intellectual Property Reputation Technical Review 83

Scott Edward Walker

DECEMBER 14, 2015

One of the biggest mistakes I see startups make is failing to set-up vesting schedules for the founders. v=-R01YcgJ3Yw What Is a Vesting Schedule? A vesting schedule is a mechanism by which the ownership of the stock issued to the founders is earned over time (typically four years, as discussed below), rather than immediately.

Vesting 40

Vesting Founder Stock Cofounder 40

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

NZ Entrepreneur

JUNE 9, 2022

This does need to be balanced with the fact that video calls have made it easier to include everyone in every meeting where they may only have a slightly vested interest so there maybe a need for multi-tasking sometimes! 5: Team building.

Vesting 106

Vesting Bandwidth Technical Review Video 106