YoungUpstarts

JULY 31, 2019

by Anish Sebastian and Juan Pablo Segura, co-founders of Babyscripts. Founders need seed capital to get their operations up and running, and to begin generating revenue. Ten years ago, Ward Cunningham published a Youtube video that introduced the concept of “technical debt” to the world.

Cofounder 115

Cofounder Burn Rate Technical Cofounder Seed Capital 115

David Teten

JANUARY 21, 2021

(co-written with Jamie Finney, Founding Partner at Greater Colorado Venture Fund. This essay is part of a series on alternative VC: I: Revenue-Based Investing: a new option for founders who care about control. III: Why are Revenue-Based VCs investing in so many women and underrepresented founders?

Equity 78

Equity Revenue Cofounder Colorado 78

Startup Professionals Musings

APRIL 23, 2012

One of the first tough decisions that startup founders have to make is how to allocate or split the equity among co-founders. In many cases, one founder has started earlier and brings an important completed piece of work to the table, and that can have great value. Pre-existing intellectual property. Marty Zwilling.

Intellectual Property 252

Intellectual Property Equity Cofounder CTO Hire 252

Startup Professionals Musings

NOVEMBER 8, 2010

One of the first tough decisions that startup founders have to make is how to allocate or split the equity among co-founders. In many cases, one founder has started earlier and brings an important completed piece of work to the table, and that can have great value. Pre-existing intellectual property. Marty Zwilling.

Equity 228

Equity Intellectual Property Cofounder CTO Hire 228

Both Sides of the Table

MAY 9, 2011

I covered what I call “the co-founder mythology.&# Either you’re not technical and you think you need a technical co-founder or vice-versa. Conventional wisdom says that you gain far more in working as a team than you lose by diluted by half before you start. Hire your co-founder.

Cofounder 393

Cofounder Founder Vesting Founder Vesting 393

View from Seed

SEPTEMBER 9, 2014

This is a guest post from Stephano Kim , former co-founder of Web 1.0 Many startup CEOs hire COOs or launch companies with a co-founder carrying the title. When should founders hire one? For most of my career, I’ve served startups and early-stage companies as an operating executive or advisor.

Hiring 336

Hiring Cofounder Startup Technical Cofounder 336

This is going to be BIG.

JANUARY 18, 2024

Some of these folks are founders and CEOs, but not at high-growth tech startups. Governance Moreso than a lot of actual VCs, a lot of high-net-worth folks tend to ask for board representation—even in the super early stages of a company where boards tend to be a little less formal. They might not have even made their own money.

.Net 88

.Net Cap Table Startup Technical Review 88

David Teten

DECEMBER 2, 2019

Now the bad news: some venture capitallists have a bias against startups with an explicit positive social impact, on the grounds that they have a smaller addressable market, and that the founders are not sufficiently focused on creating shareholder wealth. If you think I’ve missed any, please contact me. J.M.Kaplan Innovation Prize. “The

Technical Review 60

Technical Review SBIR Dilution Silicon Valley 60

David Teten

JANUARY 19, 2021

(co-written with Jamie Finney, Founding Partner at Greater Colorado Venture Fund. From RBI, Flexible VCs borrow the ability to reap meaningful returns without demanding founders build for an exit. By tying payments to actual revenues, founders and investors remain aligned around the company’s real-time performance, good or bad.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Both Sides of the Table

SEPTEMBER 17, 2011

I recently wrote a post about why I didn’t think early-stage startups should have COOs. “We’re all equal co-founders and we don’t care about titles.&# I usually encourage people to think about titles like, “Founder & CTO&# or “Founder & VP Marketing.&#.

Operations 292

Operations CTO Hire Startup Early Stage 292

blog.nahurst.com

JULY 19, 2010

The graphic below balances the risks cofounders take with their relative contributions to help answer this question. This covers one of the most common situations I encounter: For a pre-funding web startup whose team includes only a non-technical cofounder, how much equity should an incoming technical cofounder get?

Technical Cofounder 43

Technical Cofounder Cofounder Equity Salary 43

Business Plan Blog

OCTOBER 4, 2013

This is true for early stage funding as well as venture capital funding. If you have a technical background and you are focused on product development, consider a co-founder with a sales and marketing background that can focus on selling your world class product. Don’t make everyone a founder. Early Stage.

Part-Time VPE 79

Part-Time VPE Fractional VPE Cofounder CTO Hire 79

Both Sides of the Table

AUGUST 3, 2010

years ago and told me, “I just got offered the chance to buy this company because the founder doesn’t want to continue. How much dilution should I take for it?&# My friend’s company was pre-revenue. Me: “Zero dilution. Sometimes this involves co-CEO’s. Want to sell early?

Merger 276

Merger Technical Review Early Stage Dilution 276

YoungUpstarts

OCTOBER 24, 2013

One of the challenges for investing in startups has always been the lack of an established way for founders and investors to actually measure and decide on the valuation of the startup concerned.

Pre-Money Valuation 150

Pre-Money Valuation Web Technical Review Angel Investor 150

Both Sides of the Table

NOVEMBER 14, 2017

As an early-stage VC I love this phase. Sam also had a vision as early as 2012 about how MakeSpace would be a large employer of middle-income jobs: The company would hire employees rather than just have contractors and he would lead the effort to ensure they had opportunities for growth and benefits for their families.

Operations 286

Operations New York City Technical Review Startup 286

The Next Web

OCTOBER 3, 2012

Andrew is the co-founder and CTO of Parse.ly , a technology startup that provides big data insights to the web’s best publishers. He wrote: When startups die, the official cause of death is always either running out of money or a critical founder bailing. Editor’s note: This is a guest post by Andrew Montalenti.

Cofounder 155

Cofounder Technical Cofounder Technical Review Software Review 155

YoungUpstarts

MAY 6, 2019

In this article, we will discuss why it is important to understand the whole startup stages concept before you start a business to get the most benefit. Early Stage. This startup stage starts from the day you decide to work on a startup idea. Here is the complete list of points available in early stage startup.

Startup 101

Startup Technical Cofounder Merger Early Stage 101

David Teten

OCTOBER 1, 2015

Should you co-found your company with a software development shop? I’ve talked with a number of software development shops who are eager to get into the business of cofounding companies, i.e., getting product revenue and equity instead of just consulting revenue. What are the terms of their relationship with the founder?

Software Developers 60

Software Developers Software Development Software Review Technical Cofounder 60

Agile VC

JULY 11, 2012

Some disgruntled younger partners left in the mid-90s… two co-founded Benchmark Capital (Bruce Dunlevie & Andy Rachleff). But eventually some disgruntled younger partners left and two started August Capital (Dave Marquardt & John Johnson) and one co-founded Benchmark (Bob Kagle). But it’s not quite that simple.

Silicon Valley 240

Silicon Valley Carried Interest Cofounder Boston 240

View from Seed

APRIL 30, 2015

What is it, and how should founders think about it? note: We’d like to be extra clear that founders should not take on venture debt if they don’t have 100% visibility into repaying the loan, as banks that need to recoup their loan my force the company or you as the guarantor into liquidation or bankruptcy.

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

David Teten

AUGUST 19, 2019

RBI normally requires founders to pay back their investors with a fixed percentage of revenue until they have finished providing the investor with a fixed return on capital, which they agree upon in advance. For background, see Revenue-Based Investing: A New Option for Founders who Care About Control. Capital need of up to $1.5M

Revenue 60

Revenue Technical Review Software Review Equity 60

JANUARY 9, 2014

No clear vision or purpose This should be the starting point for any startup founder, but it’s often overlooked. I recently developed a more human framework for early-stage startups to define their startup DNA and lay some foundations for a sustainable business. By focusing on the ‘why?’

Early Stage 102

Early Stage Startup Cofounder Design 102

Both Sides of the Table

OCTOBER 17, 2009

With open source software (LAMP stack) and cloud computing infrastructure it just wasn’t that expensive to get your company going and founders just wanted to raise less money. Many VCs who do lots of seed stage deals are very supportive and active. They do many early-stage deals. They have a large-ish fund.

Software Review 283

Software Review Term Sheet Due Diligence Southern California 283

Both Sides of the Table

JUNE 5, 2015

In the old days there usually weren’t convertible notes on early-stage deals and there weren’t party rounds with 20 angels or 6 seed funds. So how DOES a VC think about financings at early stages? If you’re a solo founder and haven’t built out your team or engineers I’m likely to want 15+%.

Pre-Money Valuation 150

Pre-Money Valuation Option Pool Post-Money Valuation Dilution 150

Both Sides of the Table

FEBRUARY 25, 2010

But we weren’t optimizing for dilution – we were building a $1 billion+ company and we wanted the runway to succeed. My co-founder and other management team members wanted us to hold off and see whether we could get the deal done at a higher price. We ended up agreeing a term sheet for $16.5 Yes, this was stupid.

Technical Review 301

Technical Review Term Sheet Venture Capital Due Diligence 301

Startup Company Lawyer

MARCH 14, 2010

Founders Institute Plain Preferred Term Sheet (by WSGR – disclaimer, I represent the Founders Institute and was involved in drafting this document). If new investors get better rights in a future equity financings (such as registration rights, price-based anti-dilution, redemption rights, etc.), Anti-dilution protection.

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

Both Sides of the Table

APRIL 27, 2014

Seed investors are aplenty and of course they need downstream money to fuel their early-stage bets. Co-founder discontent. Reference checking is to confirm or disprove a strong, positive intuition you already have about founders that could lead to an investment or a pass. You have to deal with CEOs who resign.

Cofounder 374

Cofounder Syndicate Syndication Early Stage 374

Both Sides of the Table

DECEMBER 1, 2009

I was reading one of my favorite websites for entrepreneurs, VentureHacks, this weekend and noticed that they are running a long piece on how to pick a co-founder. Once it’s set up I recommend bringing in a co-founder and giving them 10-30% of the company depending upon when you bring them in. You’ll be fine.

Hiring 289

Hiring Cofounder Dilution Startup 289

Both Sides of the Table

MAY 30, 2018

I know that some founders feel uncomfortable with this as though they might somehow be sharing something so confidential that it ultimately hurts you. Many VCs will have a distribution curve where they’ll do a small number of early-stage deals (say $1.5–3 Why shouldn’t most founders just name a price? After all?—?we

Valuation 324

Valuation Post-Money Valuation Pre-Money Valuation Cofounder 324

View from Seed

APRIL 16, 2015

An easy way to think about it is that value over time doesn’t go up and to the right in a straight line like this: Instead, it’s more of a stair step like this: So, what are the value inflection points that create the stair steps, and how does one think about it at the earliest stages? These might include: Bring on a technical co-founder.

Seed Stage 120

Seed Stage Cofounder Early Stage Startup 120

View from Seed

JANUARY 26, 2016

With that in mind, let’s look at an illustration of these trends below, which demonstrates what’s been happening to early-stage financing rounds over the last 15 years or so. Series A investors invested quite early, often before product/market fit. FWIW, that is not how we operate.).

Seed Stage 120

Seed Stage Early Stage Cofounder Finance 120

The Next Web

AUGUST 19, 2013

He is the co-­founder and CEO of Quote Roller and PandaDoc. It’s always better to be earn money, not just raise it, as money you earn doesn’t dilute your ownership and reassures your investors. It’s always better to be earn money, not just raise it, as money you earn doesn’t dilute your ownership and reassures your investors.

Belarus 137

Belarus Viral Channel Startup 137

David Teten

AUGUST 21, 2019

Most founders who are raising capital look first to traditional equity VCs. RBI normally requires founders to pay back their investors with a fixed percentage of revenue until they have finished providing the investor with a fixed return on capital, which they agree upon in advance. Less or no dilution. But should they?

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

Hunter Walker

JANUARY 15, 2016

By the end of 2004 I had brought on two co-founders: John Vars – who is now the Chief Product Office at TaskRabbit, and Steven Reading took over Sales and Revenue. How do founders think about whether it’s time to move on or not? Ben Horowitz talks about asking founders what secret they know that no one else does.

Technical Review 48

Technical Review Startup Cofounder Software Review 48

Reid Hoffman

AUGUST 17, 2021

Greylock investor Sridhar Ramaswamy , who co-founded search engine startup Neeva , says it’s more important for startups to think about creating a product that is useful and resonates with people before worrying about whether a large incumbent is doing it. TRANSCRIPT.

Cofounder 69

Cofounder Differentiation Search Advertising 69

Reid Hoffman

AUGUST 17, 2021

Greylock investor Sridhar Ramaswamy , who co-founded search engine startup Neeva , says it’s more important for startups to think about creating a product that is useful and resonates with people before worrying about whether a large incumbent is doing it. TRANSCRIPT.

Differentiation 69

Differentiation Cofounder Search Advertising 69

Both Sides of the Table

APRIL 14, 2012

Let me remind readers as I outlined in this post , there are VERY FEW M&A transactions for early-stage startup companies above $100 million. You just said, “nobody would take 1-2% dilution.” But I owe it to my existing investors and co-founders to listen. They’re worth $11 billion as of today.

Valuation 316

Valuation Balance Sheet Dilution Term Sheet 316