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Should You Offer Equity Compensation to Employees?

Up and Running

In 2005, David Choe was invited to paint a number of murals at Facebook’s HQ in Palo Alto. Of course, not every equity compensation story is a David Choe Story. 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. We’ll be happy to help.

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Working for Equity Instead of Cash

genylabs.typepad.com

Member since 01/2005. Working for Equity Instead of Cash. has an article on service firms waiving their fees and instead taking equity in their clients. Interest in this waned when the Internet bust resulted in most tech start-up equity becoming worthless, but it seems to be coming back. Blog powered by TypePad.

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What’s a Fair 409A Discount?

VC Adventure

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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On Bubbles … And Why We’ll Be Just Fine

Both Sides of the Table

But this mania to not miss out on the next big thing is driving some investors to pay growth-equity prices for traditional market risk (as in, they’re paying up before it is clear there is product / market fit). Or worse yet they may never get financed. And well they should be. And so on down then line. Have a cushion.

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Connecting the Dots: How New Job Creation, IPO’s, and Venture Capital in America Are Intimately Linked

Pascal's View

The BDS series tracks the annual number of new businesses (startups and new locations) from 1977 to 2005, and defines startups as firms younger than one year old. The study reveals that, both on average and for all but seven years between 1977 and 2005, existing firms are net job destroyers, losing 1 million jobs net combined per year.

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Meet Manu Kumar, Chief Firestarter at K9 Ventures

K9 Ventures

Another company which is going to have widespread impact is eShares, eShares is going to change the way the private companies manage their equity. That company merged with another company in Boston and grew to about 80 people and was acquired in 2005. VN : What do you look for in companies that you put money in?

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Pre-Money Valuation vs Number of Founders | @altgate

Altgate

It is a pretty narrow filter of the 750+ companies that completed the 2010 CompStudy survey, but there are 55 rounds of financing to look at…enough to be a meaningful dataset I think. What is interesting is that you see a peak pre-money valuation of $3.16 Is the dilution of co-founders counterbalanced by other factors?