Remove Common Stock Remove Employee Remove Startup Remove Venture Capital
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Venture Capital Q&A Session

Both Sides of the Table

We received so much positive feedback from our This Week in Venture Capital show walking through valuation calculations & term sheets that we decided to do a Q&A show this week to address topics that entrepreneurs want to learn about. In fact, far better if you haven’t raised venture capital.

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Who Should be on Your Startup Board?

Both Sides of the Table

If you haven’t raised any money or if you raised a small round from angels or friends & family I would suggest you avoid setting up a formal board unless the people who would join your board are deeply experienced at sitting on startup boards. What happens at the A-round of venture capital? But it’s quite rare.

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Cram Down – A Test of Character for VCs and Founders

Steve Blank

At the turn of the century after the dotcom crash, startup valuations plummeted, burn rates were unsustainable, and startups were quickly running out of cash. Except, that is, for the bottom feeders of the Venture Capital business – investors who “ cram down ” their companies. Why do VCs Do This?

Cram Down 413
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Bad Notes on Venture Capital

Both Sides of the Table

On the phone … Me: So, you raised venture capital? Less than you’ll probably grant your most junior employees in stock options? If you want to give them a 50% discount offer them $1 of common-stock warrants (no liquidation preference) for every $1 of stock they buy. Startup Lessons'

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Startup Stock Options – Why A Good Deal Has Gone Bad

Steve Blank

VC’s have just changed the ~50-year old social contract with startup employees. In doing so they may have removed one of the key incentives that made startups different from working in a large company. For most startup employee’s startup stock options are now a bad deal. Here’s why.

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How to Fund Your Startup Without Losing Control

Up and Running

Capital investments are like gasoline on a startup business’s metaphorical fire. If you’re like most startup CEOs, your startup has been your personal fiefdom and baby. Takeaway lesson: A shocking number of technology startups never even get their first product out the door. Those days are long gone.

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What’s a Fair 409A Discount?

VC Adventure

Back in the olden days of venture capital, company boards had wide discretion in pricing company options. It was and is imprecise science but – at least in the case of venture backed startups – there wasn’t much harm in an option being priced low. Quick note: I’m not your lawyer.