Hunter Walker

JANUARY 2, 2017

The total value of these deals might look higher than when a tech company makes an acquihire but the premium tends to go to retention rather than the cap table (especially since (a) the acquirer might not be seen as an ‘attractive’ place to work and (b) there’s assumption of less equity upside post-acquisition).

Technical Review 115

Technical Review Cap Table Acquisition Startup 115

View from Seed

SEPTEMBER 23, 2019

To provide relevant perspective, listing past convertible note(s) and/or equity financing(s) including total round size and valuation (caps) is helpful. Previous venture firms’ specific involvement on the cap table should be noted here, though. First, it’s helpful to enumerate the startup’s funding history to date.

Cap Table 211

Cap Table Seed Stage Valuation Dilution 211

VC Adventure

OCTOBER 8, 2012

This is typically reflected on cap tables in a completely separate tab to the spreadsheet that shows the debt total by investor and then some kind of interest calculation. The problem, of course, is that their convert is already a part of their capitalization – even though it’s not reflected on the cap table.

Cap Table 48

Cap Table Dilution Equity Deal Structure 48

ithacaVC

SEPTEMBER 10, 2012

But here is one that I want to focus on in this post: “Can I ask for undiluted stock (non dilution clause)?” I am not even sure what “undiluted stock” is, but safe to say the person (I will call him Exec X) meant stock that his equity would not be dilutable in terms of ownership.

Dilution 53

Dilution Employee Cap Table Stock 53

keen.io

FEBRUARY 5, 2013

For example: Don’t accept equity compensation (stock shares) without knowing the percentage of the company you’ll own. From there, I began googling things like “first employee startup equity” and “startup offer negotiation.” These were the best resources I found: Equity for Early Employees in Early Stage Startups. Let’s go home.”

Salary 50

Salary Equity Startup San Francisco 50

Up and Running

SEPTEMBER 20, 2021

This is all incorporated into a document called a Cap Table. . A cap table will help you in the strategic management of business decisions. Wondering what a cap table is, its importance, and how you can maintain it to expand your business? What is a cap table? Let’s dive in.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

The Next Web

OCTOBER 21, 2013

In many cases we have observed, the founders have given away too much equity to their first investors — typically angels and family offices, who have little experience with fast-growing startups or the venture capital funding model. Alarm bells. Of course, not all of the fault in these lopsided structures lies with the angel investors.

Cap Table 128

Cap Table Option Pool Angel Investor Entrepreneur 128

Hippoland

APRIL 10, 2016

We are trying to decide how much equity to allocate to each person. I would like to split the equity equally, since it seems only fair. But, Ada wants to split the equity 50% her, 20% Bob and 20% me with a 10% option pool. Non-active advisors are typically granted < 1%.

Cofounder 48

Cofounder Cap Table Equity Vesting 48

Austin Startup

DECEMBER 7, 2017

There are two problems with early stage investing: telling how much a company is worth when truthfully, it is still worthless; and helping early-stage companies protect themselves from over dilution when they are, effectively, worthless. A SAFE note is a Simple Agreement for Future Equity. Two sides of the same intractable coin.

Covenant 48

Covenant Cap Table Early Stage SBA 48

www.payne.org

SEPTEMBER 22, 2011

Startup Equity For Employees. 3 Dilution. 7 Salary vs Equity. The re-heating of the venture funded tech market has pushed a heat up of the hiring market, and Im getting more calls from friends asking for help understanding startup stock (equity) offers. In a startup, dilution happens, and you just need to factor it in.

Equity 56

Equity Employee Vesting Preferred Stock 56

Haystack

AUGUST 18, 2019

You lose influence as larger investors come into the cap table and start throwing their weight around. 4/ Orthogonal Competition – I recently tweeted about a new breed of early-stage technology investor that has its roots in public equities (hedge funds, long/short, etc.) You lose way more than you win.

Seed Stage 108

Seed Stage Cap Table Early Stage Malaysia 108

Board Effect

MAY 10, 2019

Capitalization tables—”cap tables” for those who don’t have time for extra syllables—map the balance of power in a company. If org charts are about people power , cap tables are about money power. In reality, however, cap tables are often far more complex. What is a cap table?

Cap Table 40

Cap Table Liquidation Preference Dilution Liquidity Event 40

venturehacks.com

SEPTEMBER 22, 2011

The Equity Equation. As this nuclear winter of venture hacks continues, I thought you might enjoy our thoughts on Paul Graham’s The Equity Equation. ” Read the rest of The Equity Equation first; it is great. You have to pay market rates regardless of the equity equation. Venture Hacks Good advice for startups.

Equity 40

Equity Cap Table Valuation RSS 40

Rob Go

AUGUST 29, 2016

The main reason for this, I think, is that there has been such a proliferation of convertible notes, SAFE’s, and other instruments that it becomes tough for a new investor to feel confident that they fully understand a company’s cap table prior to an investment. This creates a dis-incentive to raise more than you intended.

Post-Money Valuation 52

Post-Money Valuation Valuation Cap Table Term Sheet 52

David Teten

AUGUST 21, 2019

Most founders who are raising capital look first to traditional equity VCs. Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. Should you raise venture capital from a traditional equity VC or a Revenue-Based Investing VC? Less or no dilution.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

ithacaVC

APRIL 5, 2011

I am a huge fan of simple cap tables. A cap table is a written record (in Excel, for example) of who owns stock in your company. It should also provide a combined summary so that it is easy to see who owns what % of the company on a fully diluted and converted basis. So, we needed a solution.

Common Stock 45

Common Stock Stock Cap Table Preferred Stock 45

The Next Web

OCTOBER 7, 2013

Quite frankly, waiting provides more assurance around employment risk without the commensurate sacrifice in equity comp. Cap tables sound intimidating. Every time a startup raises capital, all common shareholders are diluted. All of the estimates displayed above are figures prior to any dilution.

Engineer 129

Engineer Dilution Option Pool Vesting 129

Hippoland

MAY 16, 2018

Here’s what’s happening in the equity world (from my perspective): 1) Token sales in the crypto-world do affect “equity” raises. (I I put “equity” in quotes because I include convertible notes and convertible securities in this category.) This leads me to point #3.

Seed Stage 48

Seed Stage Valuation Convertible Security Equity 48

Hippoland

MAY 16, 2018

Here’s what’s happening in the equity world (from my perspective): 1) Token sales in the crypto-world do affect “equity” raises. (I I put “equity” in quotes because I include convertible notes and convertible securities in this category.) This leads me to point #3.

Seed Stage 48

Seed Stage Valuation Convertible Security Equity 48

Hunter Walker

JANUARY 20, 2015

Despite being the smallest line on a founder’s cap table, we were often one of the first calls they made when confronted with a problem to solve or opportunity to consider. And relationships are long term equities. Or when an exciting A Round may “dilute” them (no, you own less of something much bigger.

Cap Table 48

Cap Table Warrant Syndicate Syndication 48

David Teten

OCTOBER 1, 2015

Not surprisingly, the list above also is ranked from least to most equity stake in an investment for the investor, relative to the cash they invest. How would one set up such a startup to eventually raise capital from outside VCs, who will be wary of ‘dead equity’ (i.e., equity that belongs to departed cofounders)? The cliffs?

Software Developers 60

Software Developers Software Development Software Review Technical Cofounder 60

blog.simeonov.com

FEBRUARY 22, 2010

It outlines key points of agreement between founders around IP ownership, equity ownership, vesting, etc. The number of separate documents may vary but they fall into two categories: Those related to equity, typically a restricted stock purchase agreement (RSPA) and associated escrow and other agreements.

Founder 44

Founder Vesting Agile Startup 44

venturehacks.com

OCTOBER 21, 2010

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.&# Update : Check out our $9 cap table which calculates the effect of the option pool shuffle on your effective valuation. share to $1.00/share:

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68

Feld Thoughts

JULY 14, 2015

A company raises $1m of seed money from angels in a convertible note with a $6m cap. Assuming equity is raised at or above that cap, the total dilution, before the new money, is 16.6% (equivalent to an equity financing of $1m at a $6m post money valuation. Here’s the scenario.

Recapitalization 70

Recapitalization Pre-Money Valuation Post-Money Valuation Angel Investor 70

venturehacks.com

MARCH 21, 2008

If your company hasn’t raised a Series A, increase the advisor’s equity by roughly 30%-50% to account for dilution from seed investors, Series A investors, option pools, swimming pools, and the like. Finally, there is a beauty to paying in equity rather than an equivalent amount of cash. What are advisory shares?

Advisory Board 44

Advisory Board Cap Table Vesting Equity 44

www.paulgraham.com

APRIL 28, 2010

Whatkind of anti-dilution protection do they want? It costs you a little more equity, but being able to play the two firms off each other (as well as ask one if the other is being out of line) is invaluable. Angels who only invest occasionally may not themselves know whatterms they want. They just want to invest in this startup.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

abovethecrowd.com

APRIL 20, 2016

You can no longer simply look at the cap table and estimate your return. It will also minimize future dilution. I get that you want to grow and I want you to grow, but let’s internally finance that growth by spending gross margin dollars rather than new dilutive dollars of equity. ” Go public.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

NZ Entrepreneur

JULY 12, 2018

Founders can be reluctant to give up equity and control of their idea to bring in a co-founder alongside them to share in the decision making, as well as the highs and lows. What happens if they don’t work out after six months, yet they hang around forever on the cap table, through an equity stake they never really earned?

Cofounder 44

Cofounder Founder Vesting Cap Table 44