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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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Most Common Early Start-up Mistakes

Both Sides of the Table

These periods of time can leave a founder very vulnerable in the future. Assuming normal valuations at fund raising rounds you’ll be down to 6-12% after you’ve created a stock-option pool and raised capital. That’s the difference between a founder and a non-founder. Founder vesting.

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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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The Equity Equation

venturehacks.com

Offers from top-tier firms increase your valuation. Offers from top-tier firms increase your valuation. They don’t even try to get market price for their investment; they limit their holdings to leave the founders enough stock to feel the company is still theirs.” 4 responses so far · Comments RSS. #.

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