Remove Cofounder Remove Entrepreneur Remove Founder Vesting Remove Valuation
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Finance Fridays: Getting Started – Allocating Equity and Founder’s Investment

Feld Thoughts

Finance Friday’s gets off the ground with today’s post by introducing you to an imaginary startup, the entrepreneurs that we’ll being following throughout the series, and their first challenges: splitting up the founders’ equity and addressing the case where one of the founders provides the initial seed capital for the business.

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Most Common Early Start-up Mistakes

Both Sides of the Table

I often talk with entrepreneurs who are kicking around their next idea. These periods of time can leave a founder very vulnerable in the future. When I hear entrepreneurs say that they’re kicking around ideas with friends I ask, “have you legally registered a company?&# The world is much safer for non-founders.

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First Round Funding Terms and Founder Vesting

Both Sides of the Table

The meme was kicked off by Chris Dixon with this post saying that term sheets need to be simplified and align investor / founder interests. Last to weigh in was Brad Feld whose blog post argues that the only 2 terms that should be negotiated are amount raised & valuation. In my first company there was no vesting in the seed round.

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The Equity Equation

venturehacks.com

Offers from top-tier firms increase your valuation. Entrepreneurs should think about unbundling money and value add. Offers from top-tier firms increase your valuation. But overall, an offer from a top-tier firm increases your valuation. Top-tier firms try to avoid increasing your valuation when they make an offer.

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