Altgate

JUNE 25, 2012

Instead, the dead equity languishes on the cap table, weighing down the startup and making it harder to attract and motivate the people who could impact its growth. We took the percentage of equity held by former employees and founders and multiplied it by the startup’s valuation during its most-recent round of financing.

Equity 44

Equity Vesting Cap Table Technical Review 44

View from Seed

OCTOBER 15, 2014

Examples of housekeeping include the following list, though not every item will appear every time: Finance: Cash out date, burn rate, 409A valuation, cap table, common/preferred stock dashboard. Finance is mission critical, for instance – it just appears on a recurring basis. (If

Seed Stage 331

Seed Stage Cap Table Metrics Burn Rate 331

Berkonomics

JUNE 8, 2017

Some businesses require very little capital and the founder can self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). And even with the significant cost of credit card debt, many entrepreneurs aggressively use existing cards to finance a startup.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106

Altgate

AUGUST 25, 2012

Instead, the dead equity languishes on the cap table, weighing down the startup and making it harder to attract and motivate the people who could impact its growth. We took the percentage of equity held by former employees and founders and multiplied it by the startup’s valuation during its most-recent round of financing.

Equity 28

Equity Vesting Cap Table Technical Review 28

The Equity Kicker

MARCH 21, 2017

There is clearly dysfunction in chasing growth at all costs – inherently unprofitable companies grow to employ thousands of people before going bust, resulting in much personal anguish and not a little wasted capital. Companies that aren’t chasing unicorn status find it hard to raise money. Or at least almost as much.

San Francisco 90

San Francisco Cap Table Angel Investor Valuation 90

keen.io

FEBRUARY 5, 2013

To begin answering this question, I started on a quest to understand startup financing. This book was written to help founders negotiate financing with investors, but it really helped me understand Keen’s financial situation, and I highly recommend it to anyone joining a startup. First, I read Venture Deals by Brad Feld.

Salary 50

Salary Equity Startup San Francisco 50

Eric Friedman

JUNE 27, 2016

I have seen what I call “predatory advisors” come in and really mess up a cap table by promising big intros and sales contracts only to disappear after the first 6-12 months. So what most companies do is get FMV from a 409A valuation and use that for their strike price. LAWYERLY DISCLAIMER: This is not legal advice.

Equity 98

Equity Vesting Cap Table Common Stock 98

Both Sides of the Table

FEBRUARY 8, 2016

The startup industry may be “resetting,” which doesn’t mean a “crash” but rather just a resetting of valuations, timescales, winners/losers, capital sources and the relative emphasis of growth rates vs. burn rates. Pragmatic cost cuts are always possible and often productive. Be realistic on valuation.

Burn Rate 150

Burn Rate Cap Table Balance Sheet Valuation 150

David Teten

DECEMBER 3, 2019

Some notable metrics are revenue growth rates, free cashflow, leverage ratios, historical financing amounts, returns on marketing spend, customer acquisition costs, lifetime value of customers, customer churn rates, and team social scores. 645 Ventures released a cap table simulator to help level the playing field.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Berkonomics

JANUARY 20, 2010

Some businesses require very little capital and the founder is able to self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). And even with the significant cost of credit card debt, many entrepreneurs aggressively use existing cards to finance a startup.

Private Equity 69

Private Equity Valuation Cap Table Accredited Investor 69

The Next Web

OCTOBER 7, 2013

Layer on the opportunity cost of choosing not to pursue lucrative alternatives offered elsewhere, and it’s easy to see how, if not under the right terms, the engineer #1 position is less than appealing. Cap tables sound intimidating. As stated earlier, investors will dilute ownership upon nearly every round of financing.

Engineer 129

Engineer Dilution Option Pool Vesting 129

This is going to be BIG.

JUNE 2, 2010

I’m sure you’ll start seeing some rounds that essentially should be B rounds according to what the current cap table looks like, except that there’s a Series A level of progress, and about a million bucks in product overspend that didn’t really lead to a business. Once you have that, keep your focus simple. Try to prove one thing.

Cap Table 106

Cap Table Seed Stage .Net Venture Capital 106

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. The pressures of lofty paper valuations, massive burn rates (and the subsequent need for more cash), and unprecedented low levels of IPOs and M&A, have created a complex and unique circumstance which many Unicorn CEOs and investors are ill-prepared to navigate.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

www.payne.org

SEPTEMBER 22, 2011

The strike price typically goes up as the company raises additional funding (at higher valuations). Lets say youre being offered 2% of a company with a valuation of $10m after funding. Buying your stock would cost $200,000! The other factor is the "cap table" (capitalization table, or summary of who owns what stock).

Equity 56

Equity Employee Vesting Preferred Stock 56

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

venturehacks.com

MARCH 21, 2008

The opportunity cost is probably too high. And that wouldn’t make any sense—our valuation already takes the investor’s value-add into account.&# Or you can just “burn the boats at the shore&# and give the advisory shares to the investor with the agreement that he will invest a minimum amount in the financing.

Advisory Board 44

Advisory Board Cap Table Vesting Equity 44

abovethecrowd.com

JUNE 2, 2021

According to an interview with Elon Musk, this campaign cost Paypal about $60 million , which most Silicon Valley historians would consider money well spent. It would cost a tremendous amount of money to run such a program. With the 7% banker fee that is a 35% AVERAGE cost of capital. Billions of dollars. Wouldn’t that be great?

IPO 82

IPO Customer Matching Silicon Valley 82