Up and Running
DECEMBER 1, 2015
In 2005, David Choe was invited to paint a number of murals at Facebook’s HQ in Palo Alto. At the time, Facebook wasn’t the goliath it is today and so, Choe was given a couple of options: he could have $60,000 in cash, or stock (equal to the equivalent amount of the cash back then). Different types of equity compensation.
VC Adventure
AUGUST 15, 2018
Most boards did some level of work to determine the FMV of a company’s stock but generally options were priced between 10% and 15% of a company’s then preferred price (because common equity sits behind preferred equity there is typically a discount applied to the FMV of common stock to account for this “overhang”).
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Agile VC
APRIL 17, 2011
Obviously most of these employees are working hard primarily for equity upside compensation, but Kayak’s personnel costs are roughly $200K/head so the company is highly productive on a per employee basis. Interesting to note that Hafner and English own common stock but also made meaningful investments in the Series A & B rounds.
Both Sides of the Table
APRIL 14, 2010
Many companies that are raising B or C venture capital rounds right now raised their initial money in 2005-2008. Liquidation preference is the amount of money that an investor gets paid before the common stock (e.g. If you want to raise venture capital more easily the advice could be quite practical and counter-intuitive.
www.paulgraham.com
APRIL 28, 2010
November 2005 Venture funding works like gears. Some VCsnow require that in any sale they get 4x their investment backbefore the common stock holders (that is, you) get anything, butthis is an abuse that should be resisted. Theres only common stock at this stage. Want to start a startup? Many are underfunded.
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