ithacaVC

FEBRUARY 23, 2011

A management carve out plan (MCOP) is a written obligation of the company that, in simple terms, provides that certain management members get a predetermined slice of proceeds when a company is sold. A great question to consider is how the MCOP is allocated among management members. But when should the MCOP be adopted?

Liquidation Preference 55

Liquidation Preference Management Preferred Stock Dividend 55

Rob Go

JUNE 17, 2014

In my last post about raising seed vs. jumping straight to A, I received a good comment from Chris Woods that my analysis neglected to include the impact of option pools that are created at each financing round. Net net, I think that currently entrepreneurs are able to manage this more effectively.

Option Pool 65

Option Pool Dilution .Net Term Sheet 65

Berkonomics

AUGUST 21, 2013

Venture or angel-financed companies with plenty of working capital sometimes are immune to this need for some time into their growth, but at some point it will become clear that the cheapest form of finance is not equity in a growing enterprise. And yet, such a loan does rise and fall with need.

Covenant 61

Covenant Warrant Dilution Intellectual Property 61

keen.io

FEBRUARY 5, 2013

I recently left my job as a technical consulting manager and joined my best friends and my fiancé, Kyle, at Keen.io (I wrote about that here ). To begin answering this question, I started on a quest to understand startup financing. Engineer, arranger, communicator, amateur photographer. Follow @michellewetzler. August 21, 2012.

Salary 50

Salary Equity Startup San Francisco 50

David Teten

AUGUST 21, 2019

Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. Less or no dilution. A company with that mindset is dramatically less risky, because it’s not dependent on the financing markets for continued viability. But should they? Optionality.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

K9 Ventures

MARCH 20, 2017

I’ve seen and heard of enough cases of when founders didn’t do their homework and ended up committing themselves to an investor relationship that was in some cases either a drag on the company or the board dynamics, or best case a net neutral. If you’re looking at raising a round of financing, you have a choice.

Founder 99

Founder Dilution Partner Curation 99

ithacaVC

JUNE 28, 2011

Let’s take the following hypo: you are the CEO of Company XYZ, and you just raised $2mm in a Series A financing. In the financing there are 3 institutional investors and 4 high net worth individuals. Let’s assume that future equity financings will be needed as usually is the case. Here are few: 1.

Warrant 53

Warrant Common Stock Liquidation Preference Institutional Investors 53

This is going to be BIG.

MARCH 28, 2021

Still, a lot of founders are worried about early dilution and how it affects their eventual outcome when the company is sold. That’s because dilution isn’t subtraction. If I get diluted another 23%, I own 77% x (1-23%), which is 59.29%. If I get diluted another 23%, I own 77% x (1-23%), which is 59.29%.

Founder 159

Founder Post-Money Valuation Dilution Valuation 159

This is going to be BIG.

JUNE 2, 2010

Frankly, what a lot of startups should do is spend the money not on another developer to build more stuff, but on a kick ass product manager to eliminate features (especially the ones that get requested after you launch) and focus the offering. That doesn’t seem like a good reason to change your financing and product strategy over.

Cap Table 106

Cap Table Seed Stage .Net Venture Capital 106

maplebutter.com

JANUARY 8, 2013

Do that – nothing else but one product / company / focus and get to $1M in sales with atleast $15% net profit. Friends & Family – High net-worth individuals with a passion for you and your industry. If you believe in it – then finance whatever you can yourself. Just ensure you understand your numbers and manage them well. $50

Technical Review 44

Technical Review Startup Cofounder Software Review 44

www.payne.org

SEPTEMBER 22, 2011

3 Dilution. Those new shares are created out of thin air by the company, and will dilute all of the current stockholders. Since you still have 100,000 shares, your ownership percentage is now dropped to 0.8333% -- you just got diluted. In a startup, dilution happens, and you just need to factor it in. diluted) terms.

Equity 56

Equity Employee Vesting Preferred Stock 56

Rob Go

NOVEMBER 30, 2012

Given this definition, we continue to see dedicated seed funds providing strong benefits for founders, including: Minimal signaling risk at the next round of financing. But I’m noticing this value being diluted somewhat for a few reasons. Chris Dixon has written most articulately about this, but many others have as well.

Seed Stage 55

Seed Stage Pre-Money Valuation Dilution Early Stage 55

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. These mutual funds “mark-to-market” every day, and fund managers are compensated periodically on this performance. By the first quarter of 2016, the late-stage financing market had changed materially. This is uncharted territory.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Up and Running

JULY 14, 2015

I’ve done this with lots of founders and we usually glaringly see skills missing like financial management or HR managements or digital marketing or whatever those things are. They never worked with the startup who had needed to raise multiple rounds of financing. How do you know if you have net profit or not?

Incubator 60

Incubator Email Startup Oregon 60

crowdSPRING Blog

DECEMBER 13, 2018

If your brand tries to be too many things at once, the message becomes scattered and the brand grows diluted. This is also known as the Net Promoter Score (NPS) question. Management. Managers and editors benefit from a solid style guide, too. What makes us stand out from the competition? But, that’s not all.

Marketing 162

Marketing Charlotte Naming Design 162