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

AUGUST 15, 2018

It was a benefit to employees and a slight value transfer from equity holders to option holders (generally speaking in M&A transactions the value of the aggregate option exercise ends up allocated across the rest of the cap table). Similarly I assumed that later stage companies would also show a smaller gap. I was wrong.

Valuation 48

Valuation Common Stock Cap Table Software Review 48

The Next Web

OCTOBER 7, 2013

They were referring to non-founder engineers, most commonly the first hire for technology businesses. Cap tables sound intimidating. It is typical for employees to vest their options over four years with a one year cliff, which means a new hire must stay on the company for at least one year to see any shares.

Engineer 129

Engineer Dilution Option Pool Vesting 129

Hunter Walker

SEPTEMBER 5, 2021

Startup CEOs Should Test Strength of Cap Table Every ~6 Months To Know Where They Stand. As a venture fund I might have a strategy which says “for every dollar I invest into companies, I will hold one dollar in reserve for additional financings.” Instead my recommendation is to ask every ~6 months or so in-between financings.

Cap Table 95

Cap Table Seed Stage Syndicate Syndication 95

This is going to be BIG.

OCTOBER 22, 2014

You''ll get an entrepreneur who has raised one and only one round of financing in his or her entire life--all from relatively unsophisticated individuals, giving fundraising advice. Others talked as if they were the ones doing the deals--even though they''re just the ones making the cap tables in Excel. You''re smart.

Venture Capital 140

Venture Capital Cap Table Startup Early Stage 140

OnlyOnce

JULY 14, 2022

I wrote a little bit about the experience of being a multi-time founder in this post where I talked about the value of things like a hand-picked team, hand-picked cap table, experience that drives efficient execution, and starting with a clean slate. They have an Easier Time Recruiting team members and investors.

Cap Table 62

Cap Table Founder Portfolio Finance 62

David Teten

AUGUST 19, 2019

Since 2017 we’ve managed $3 million in revenue-based financing, which helps cash-strapped technology companies grow. The mode purpose for funding is (in order of frequency) Sales, Marketing, Market Expansion, Product Development, and Hiring Employees. “ You qualify if you have $5k+ MRR. Bigfoot Capital. Decathlon Capital.

Revenue 60

Revenue Technical Review Software Review Equity 60

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. Team: Hires, fires, departures, responsibility changes, major promotions, and your org chart.

Seed Stage 331

Seed Stage Cap Table Metrics Burn Rate 331

Altgate

JUNE 25, 2012

One who attracted much attention is David Choe, the graffiti artist hired to paint the company’s first headquarters. 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. A Significant – and Growing – Problem.

Equity 44

Equity Vesting Cap Table Technical Review 44

Austin Startup

AUGUST 20, 2017

Hiring is a chapter unto itself, but it deserves to lead off any discussion of context. Compensation decisions obviously affect hiring and retention. You can’t be too careful in determining comp packages for your new hires. Your Cap Table is something that deserves constant care and attention.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

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

OnlyOnce

MAY 26, 2022

Post 4 of 4 in the series on Scaling CFOs – other posts are How to Engage with Your CFO , When it is Time to Hire Your First Chief Financial Officer , and What Does “Great” Look Like in a CFO? ). Do you spend a lot of your time dealing with finance-related issues like fundraising, debt, investors, or cap table questions?

Cap Table 62

Cap Table Forecast Finance Metrics 62

Altgate

AUGUST 25, 2012

One who attracted much attention is David Choe, the graffiti artist hired to paint the company’s first headquarters. 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. A Significant – and Growing – Problem.

Equity 28

Equity Vesting Cap Table Technical Review 28

Startup Lessons Learned

MAY 4, 2021

It'd be great if we could somehow hire people all over the world, that would be great. And of course, I wasn't really interested in the finance side of it to me. And we had just had massive challenges trying to move money to the different contractors we were hiring in different places. I'm curious. ER : I couldn't believe it.

IPO 113

IPO Cofounder Technical Review Government 113

Genuine VC

MAY 20, 2013

Compared to most other areas of finance, venture capital is practiced as more of an art, as opposed to a science. VCs who swear publicly that they’ll never make an investment with less than 20% ownership show up on cap tables in the teens… the 20% pronouncements are just posturing for negotiation.

Venture Capital 244

Venture Capital Cap Table Portfolio Early Stage 244

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

abovethecrowd.com

JUNE 2, 2021

These are the parties on the cap table prior to the transaction. Anytime you hire someone to represent you in a transaction you are subject to principle agent risk , the concern being you never know if the “agent” might be optimizing things for their own behalf, rather than simply working in the best interest of the client.

IPO 82

IPO Customer Matching Silicon Valley 82

www.informationarbitrage.com

FEBRUARY 24, 2010

It is gently laying the foundation for a subsequent financing, helping the CTO set sensible milestones to be achieved that can demonstrate execution skill and release cycle management. But sometimes, too often, the CTO falls back on hiring a friend or someone to whom they were introduced that sells them on their value-added.

CTO Hire 40

CTO Hire Founder Cap Table Vesting 40

BeyondVC

NOVEMBER 17, 2016

West coast founders now fully understand why having a NYC investor on their cap table pays huge dividends and west coast VCs are regularly leading Series A and B rounds in NYC. We continue to have the courage to be first on your cap table and the conviction to move swiftly to close rounds.

Cap Table 60

Cap Table Cofounder Dividend Institutional Investors 60

venturehacks.com

FEBRUARY 24, 2010

Two founders works because unanimity is possible, there are no founder politics, interests can easily align, and founder stakes are high post-financing. Geeks can always be hired. All our products Pitching Hacks , Cap Table , and Co-founder Interview. Date first. Learn more. Our Bookstore See our recommendations.

Cofounder 101

Cofounder Founder Technical Cofounder Technical Review 101

OnlyOnce

FEBRUARY 9, 2022

On the heels of the announcement we made last month about our Series B financing , we are now announcing the launch of a new program called Bolster Prime and a new venture capital fund called Bolster Ventures. Brad’s visceral response in this conversation was a very clear, “you should hire Jenny.” Enter Jenny Lawton.

Silicon Valley 62

Silicon Valley Venture Capital Cap Table Early Stage 62

genylabs.typepad.com

SEPTEMBER 24, 2011

I wont bother going into details on start-up financing terms ( see this post for an overview of typical VC terms) except to say if you dont know and understand: the firms cap table and valuation. Have not met anyone I wanted to hire who was willing to work for equity. Not all start-up stock is created equally. Good point.

Equity 40

Equity Technical Review San Jose Stock 40

This is going to be BIG.

DECEMBER 3, 2020

Depending on the minimum investment size, if you think about what hiring an actual analyst, or someone more senior, might cost you to look at deals you’re serious about, an investment in a fund could may for itself in access. Less than that and you need something else to bring to the table. b) Reputation for adding value.

Portfolio 134

Portfolio Syndicate Syndication Deal Flow 134

Startup Lessons Learned

JULY 11, 2019

So the other thing is how you look out for a firm that’s really only trying to hire a woman to check the box against a list of things that they need to fulfill versus looking for you, with all of your expertise and the things you know, and putting the right resources behind you to make sure you're successful.

Founder 68

Founder Lean Venture Capital Cofounder 68

Eric Friedman

JUNE 27, 2016

This is the classic “hire people smarter than you” which is harder said than done. 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. Think about the things you DON’T know.

Equity 98

Equity Vesting Cap Table Common Stock 98

venturehacks.com

MARCH 21, 2008

Advisor compensation Whether you’re hiring a normal advisor or super advisor: Advisory shares are usually issued as common stock options. They can also get terminated if the company is “reset&# , e.g. You hired a video game expert because you were building a video game but now you’re building a photo sharing site.

Advisory Board 44

Advisory Board Cap Table Vesting Equity 44

Hunter Walker

AUGUST 26, 2022

I tried to get hired at Better Place and failed. When I learned they were hiring a community manager, I threw everything I had at the interview process. The first was in July of 2014, when we made the unusual move of raising and announcing another round of private financing while on file to go public. Enter Box.

IPO 91

IPO Cofounder Early Stage Portfolio 91

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. By the first quarter of 2016, the late-stage financing market had changed materially. Investors were becoming nervous and were no longer willing to underwrite new Unicorn-level financings at the drop of a hat. This is uncharted territory.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Spencer Fry

APRIL 17, 2017

Without raising money, 1 of 2 situations would have fallen upon us: I would have had to dig deeper into my own pockets to continue to pay the contractor as well as hire others. You can also getaway with giving up zero-to-little equity if you finance the business out of your own pocket or through other means, such as consulting.

Bootstrapping 63

Bootstrapping Cap Table Liquidation Preference Cofounder 63

Austin Startup

MAY 17, 2017

The Board of Directors, however, is the most powerful group of people in the Company , with the ability to hire and fire senior executives and approve (or block) key transactions. The important point here is that Advisors have no power/control over the company. They just advise. Big difference. Do not dish out Board observer rights lightly.

Seed Stage 48

Seed Stage Startup Cap Table Angel Investor 48

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.&# Solution: Use a hiring plan to size the option pool.

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68

www.payne.org

SEPTEMBER 22, 2011

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. But this usually happens NOT to compensate for dilution, but to recognize a bigger contribution to the company than what you were originally hired for.

Equity 56

Equity Employee Vesting Preferred Stock 56

blog.simeonov.com

FEBRUARY 22, 2010

However, founder agreements are not set in stone and it is common for them to be tweaked by a little or a lot during the first financing by professional investors. They have voting rights which may entitle them to force or veto certain key decisions, e.g., hiring or firing the CEO, selling the company, raising money, etc.

Founder 44

Founder Vesting Agile Startup 44