Austin Startup

JULY 6, 2018

Ask the Users Startup Accelerators: Bundled and Unbundled Over the past several years, accelerators have emerged as a powerful filtering and signaling mechanism in early-stage startup ecosystems, allowing high-potential young startups to connect with investors, advisors, and other strategic partners far faster and more efficiently than before.

Dilution 48

Dilution Startup Technical Review Equity 48

Gust

JUNE 7, 2014

In many, if not most, seed and early stage funding scenarios, the investments are structured in LIFO order: Last In, First Out. 5) Senior Preferred Stock and warrants. 7) Junior Preferred Stock and warrants. Invested Interests company early stage funding investors startup starup' 2) Secured creditors.

Warrant 157

Warrant Preferred Stock Early Stage Common Stock 157

Both Sides of the Table

SEPTEMBER 18, 2014

It’s like we need a finance 101 course for entrepreneurs. In finance they call it “terminal value” but the truth is the price is as arbitrary at your A round as it is at your seed round. I know how to structure around that to protect the founders from getting screwed on a multiple liquidation preference.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Gust

OCTOBER 12, 2011

Last week , we took the plunge and began dissecting an example term sheet for a convertible debt financing round piece by piece. In Part II, we looked at the mandatory conversion language that is at the heart of any convertible debt financing. In my experience, a term of 12 to 24 months is common, with 12 months being on the short end.

Finance 107

Finance Term Sheet Pre-Money Valuation Early Stage 107

Haystack

JULY 8, 2018

So, that’s why I’m writing this short post specifically for 1) employees of early-stage startups and 2) the earliest investors in these startups, who are often themselves new to the entire sector. You can read more about the types of stock granted in startups here.

Early Stage 95

Early Stage Dilution Private Equity Common Stock 95

Up and Running

AUGUST 17, 2015

Additionally, I had already studied Economics and Finance during undergrad, making the academic part of an MBA seem a little redundant. C Corp versus LLC, non-competes, liquidation preferences, preferred versus common stock, and so on). This can be particularly important for founders with “non-traditional” career backgrounds.

Entrepreneur 60

Entrepreneur Cofounder Angel Investor eCommerce 60

Gust

OCTOBER 21, 2011

To account for scenarios in which the startup is acquired before it has a chance to complete a priced equity financing round, most term sheets and deal documents contain a “ change in control ” provision. In descending order of preference from the founders’ point of view: 1. What happens to the outstanding convertible notes?

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

www.inc.com

SEPTEMBER 24, 2011

Finance | Tuesdays. Financing a Small Business. Financing A Small Business. Personal Finance. Last spring, Dave Graham , founder of software consulting firm Arizona Bay, learned that a major client, Jumpstart Automotive Media, had been acquired for more than $80 million. Start-up | Mondays. Technology | Thursdays.

Arizona 40

Arizona Equity Iowa Venture Capital 40

Gust

SEPTEMBER 17, 2014

It’s like we need a finance 101 course for entrepreneurs. In finance they call it “terminal value” but the truth is the price is as arbitrary at your A round as it is at your seed round. I know how to structure around that to protect the founders from getting screwed on a multiple liquidation preference. There were no metrics.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

keen.io

FEBRUARY 5, 2013

The founders had been dropping hints that they wanted me to join them. To begin answering this question, I started on a quest to understand startup financing. These were the best resources I found: Equity for Early Employees in Early Stage Startups. Startup Equity for Early Employees.

Salary 50

Salary Equity Startup San Francisco 50

Growthink Blog

MAY 10, 2012

The five main stages include the following: 1. Early Stage Investment (Series A & B) 4. Later Stage Investment (Series C, D, and so on) 5. Mezzanine Financing Most companies that raise equity capital and are eventually acquired or go public receive multiple rounds of financing first. Pre-Seed Funding 2.

Equity 88

Equity Mezzanine Later Stage Venture Capital 88

Up and Running

DECEMBER 1, 2015

Typically, employers that offer employees equity compensation will do so in the form of common stock, preferred stock, or stock options. As opposed to stock options where the employee can decide to purchase the stock or not, restricted stock is often “granted” or given to the employee.

Equity 60

Equity Employee Stock Options Vesting 60

Both Sides of the Table

SEPTEMBER 5, 2012

Was Paul Graham right in his “high resolution” financing post? Can you imagine investing in the stock market where your price was determined at a future date and the better that company performed the HIGHER the price you paid for that investment. Convertible debt WITH a cap is stupid for founders.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

Tim Keane

JANUARY 12, 2010

For angel groups, the distinction between groups and VCs on this issue is dwindling, especially as angel groups do bigger rounds of financing.   Note that this applies only to earl stage Series A-type equity financings and assumes no cash dividends are paid to investors.   First , dividends.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

K9 Ventures

MAY 14, 2011

In my view the terminology being used for early stage investors by the press and the media is not as clear as it should be. I’ve talked about this on several occasions when I’ve been at conference and on panels, but I figured it would make sense to do a post explaining my taxonomy of the early-stage investing world.

Preferred Stock 125

Preferred Stock Seed Stage Incubator Early Stage 125

Austin Startup

OCTOBER 18, 2017

Background Reading: Should Non-SV Founders use SAFEs in Seed Rounds? the majority of the content available online for founders to educate themselves comes from Silicon Valley. Purely from the perspective of founders, it is a fantastic deal. Extensions are very common. The problem with chasing whales.

Silicon Valley 48

Silicon Valley Los Angeles Angel Investor Common Stock 48

Growthink Blog

APRIL 7, 2010

million from three individual angel investors and one early-stage venture capital fund. For those of you who don't understand the term "Series A," the Series A round is the name given to your first significant round of venture financing.

Angel Investor 54

Angel Investor Preferred Stock Venture Capital Common Stock 54

The Entrepreneurial Mind

MARCH 10, 2010

JumpStart Foundry will focus on very early-stage concepts. In return for this investment, JumpStart Foundry will receive a collective 10% ownership in the Common Stock of the company. This amount of capital is often much more than an entrepreneur can effectively utilize at the very early-stage of concept development.

Nashville 53

Nashville Tennessee Early Stage Common Stock 53

www.payne.org

SEPTEMBER 22, 2011

2 Stock Classes: Common and Preferred. 5 Stock vs Options. 6 Founders / Restricted Stock. 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. From Payne.org Wiki.

Equity 56

Equity Employee Vesting Preferred Stock 56

The Startup Lawyer

FEBRUARY 4, 2011

But before your startup signs up and cashes that $[XX,000] check, your startup’s co-founders should sit down and evaluate the incubator’s offer. As equity in the company tends to be the currency of early stage startups, the startup should have a good foundation for assigning value in terms of equity. Conclusion.

Incubator 105

Incubator Pre-Money Valuation Option Pool Advisory Board 105

Scott Edward Walker

SEPTEMBER 21, 2011

Not only will this scare-away many sophisticated angel and VC investors, but also the founders will likely find themselves constantly peppered with questions about their company and how things are going; not to mention turning holidays, like Thanksgiving, into stockholders’ meetings. What about issuing shares of common stock?

Preferred Stock 45

Preferred Stock Angel Investor Entrepreneur Common Stock 45

ReadWriteStart

JANUARY 28, 2022

Common stock. The holding of common stock in a company indicates ownership in the corporation. Investors of common stock are eligible for : The choice of the Board of Directors. However, the holder of a warrant holds a leveraged bet on the corporation’s common shares. Preferred shares.

Valuation 108

Valuation Equity Warrant Common Stock 108

Up and Running

SEPTEMBER 20, 2021

Furthermore, there are various forms of equity, such as preferred stock, common stock, and convertible notes, which influence the present and potential future investors. Founders can apply the information to instantly ascertain what percentage of the startup they have to propose a new investor. Total share ownership.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

Professor VC

FEBRUARY 18, 2011

Techcrunch called it one of the " most like-minded and forward-thinking acquisitions I’ve ever seen " I met with the founders of CardMunch several months ago when they were out raising their Series Seed round. I liked the founders (Bowei and Sid) a lot more than the business.

Acquisition 31

Acquisition San Jose Angel Investor IPO 31

Gust

OCTOBER 3, 2011

For a first time entrepreneur trying to figure out the arcane world of startup financing, it can be very confusing to understand the roles that different types of investors play in funding promising companies, as well as the point in a company’s life at which they enter the stage. From +/- $1.5m

Finance 70

Finance Venture Capital Intellectual Property Early Stage 70

Austin Startup

AUGUST 1, 2017

TL;DR: In a market that has historically idolized huge, splashy financings and exits, an increasing number of entrepreneurs are realizing that everyone else’s definition of success — particularly among certain large VCs — isn’t necessarily aligned with their own. And large checks require very large exits to achieve good returns.

Liquidation Preference 48

Liquidation Preference Common Stock Valuation Silicon Valley 48