Austin Startup

DECEMBER 9, 2019

Another red flag is when a SIC member asks for equity in your company upfront, without any performance vesting standards. For example, “give me 5% equity in your company and I’ll give you advice and allow you to use my face on your slide deck to raise money.” This is a bad deal for you, if you take it.

Vesting 72

Vesting Early Stage Seed Capital Equity 72

View from Seed

DECEMBER 4, 2014

Editor’s note: Understanding how to divide founder equity at a startup can be tricky, even to the point of reaching emotional riffs between founders. Below, Lee Hower offers advice for approaching these equity discussions objectively and properly. Sometimes co-founders put off the equity split question for some time.

Equity 315

Equity Founder Sweat Equity Cofounder 315

Agile VC

DECEMBER 4, 2014

As a result, one of the trickier things co-founders tackle is determining the equity split amongst the founding group of individuals. Across both the startups I’ve personally been involved in (PayPal and LinkedIn) and the startups in which I’ve been an investor, I’ve seen a broad range of co-founder equity splits.

Cofounder 255

Cofounder Equity Founder Sweat Equity 255

Agile VC

DECEMBER 4, 2014

As a result, one of the trickier things co-founders tackle is determining the equity split amongst the founding group of individuals. Across both the startups I’ve personally been involved in (PayPal and LinkedIn) and the startups in which I’ve been an investor, I’ve seen a broad range of co-founder equity splits.

Cofounder 173

Cofounder Equity Founder Sweat Equity 173

K9 Ventures

OCTOBER 27, 2016

One of these norms is how founder vesting and employee vesting works. I won’t get into employee vesting today as that has much more to consider than I have time to cover in this short post today. Here is a good summary post from Cooley GO on Founder Vesting. The first is fairly obvious.

Founder Vesting 48

Founder Vesting Vesting Founder Term Sheet 48

Steve Blank

MAY 19, 2015

While he kept bringing the conversation back to their big valuation I tried to steer the conversation back to how they were going to deal with: training the influx of new hires – in both culture and job specific tasks. retaining their existing hires who were working for intern-like salaries with little equity. the company had.

Technical Review 120

Technical Review Salary Early Stage Software Review 120

Both Sides of the Table

SEPTEMBER 29, 2013

If you track the venture capital industry it would be hard to miss the conversation going on this week over AngelList “Syndicates.” But as with many people who have a vested interest in fast rounds being assembled, they don’t quite get why it is so important that VCs actually take their time. Both are right.

Syndicate 356

Syndicate Syndication Cofounder Early Stage 356

Feld Thoughts

JULY 29, 2011

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.

Equity 137

Equity Finance Pre-Money Valuation Denver 137

David Teten

SEPTEMBER 2, 2017

It’s hard enough to get a job at a venture capital or private equity firm; it’s even more complex to join as a Partner. Also see Preqin’s Key Due Diligence Considerations for Private Equity Investors. . VC and private equity are very illiquid on both the investing and the personnel side. – Share and vesting of Carry.

Private Equity 60

Private Equity Venture Capital Equity Partner 60

Hippoland

APRIL 10, 2016

We are trying to decide how much equity to allocate to each person. I would like to split the equity equally, since it seems only fair. But, Ada wants to split the equity 50% her, 20% Bob and 20% me with a 10% option pool. First off, whatever you decide, you should implement vesting.

Cofounder 48

Cofounder Cap Table Equity Vesting 48

Hunter Walker

JANUARY 10, 2018

Deep breath] There are five conversations about money I’ve had with zero to a handful of people in private that I’ve been wanting to write about. Even though your equity is unlikely to make you rich , there are plenty examples of when it does to extraordinary levels. Another deep breath]. I LOVE THIS!

Silicon Valley 196

Silicon Valley San Francisco Vesting .Net 196

Eric Friedman

JANUARY 23, 2022

The best part is that I have had countless follow up conversations and DMs getting to know founders. Investors, friends, family and similar conversations can be kept in the loop by a simple email list. What equity you give early stage advisors matters. Customer conversations. GBTB – Get Back to Building (seriously).

Early Stage 78

Early Stage Equity .Net Vesting 78

Feld Thoughts

JANUARY 17, 2013

Assume you hire someone and grant them 10,000 options with monthly vesting of four years with a one year cliff. That means that after one year, they get 25% of their options and then start vesting the remaining options monthly at a rate of 1/48 (208.3 options / month, or 2,500 / year.) This makes no sense to me.

Stock Options 134

Stock Options Stock Vesting Retention 134

Both Sides of the Table

SEPTEMBER 18, 2014

These are all real conversations. of the time I have no vested interest in having the debate. What if when you have that conversation you don’t agree? “But lawyers will charge much more for equity.” Try doing THAT with equity. I have them all the time. I’m bored of it. And so forth.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

www.seriesseed.com

DECEMBER 9, 2012

You can follow this conversation by subscribing to the comment feed for this post. We went with equity because ivestors would prefer to get equity for the following reasons: 1. One of the reasons notes have become so popular is that the equity documents were too expensive. Posted by: toby | 03/01/2010 at 09:52 PM.

Finance 40

Finance Term Sheet Vesting LLC 40

Duct Tape Marketing

SEPTEMBER 30, 2022

5:26] Typeform really seems like more of a conversation in comparison to a regular form– how often do you fight the idea that people perceive it as ‘just a form where they only need the data’? [7:55] John Jantsch (01:11): So that's a lot in the CMOs job, particularly diversity, equity, inclusion. Glad to be here, John.

Marketing 75

Marketing Differentiation B2C PR 75

grasshopper.com

SEPTEMBER 24, 2011

Getting Paid in Equity: A What to Do Guide. Equity-based pay is often used by the founders of young start-ups who want to grow their businesses but cannot offer big salaries to qualified professionals. Below are some helpful tips and suggestions to keep in mind when contemplating whether or not to take an equity-based position.

Equity 41

Equity Vesting Sweat Equity Salary 41

Both Sides of the Table

MAY 19, 2018

VCs (and LPs) have a vested interest in having more data, whether they want to invest in your company / firm or not. The buyer is shopping for equity in startups and the seller is looking for cash in exchange for equity and shared governing control of his or her company. They aren’t doing this viciously?—?they

Cap Table 336

Cap Table Due Diligence Forecast Churn Rate 336

Austin Startup

AUGUST 20, 2017

They’re looking to be paid properly in the context of the overall salary structure, including cash, benefits, and equity, and to be paid commensurate with performance. Set any vesting schedules and expiration dates on roughly similar terms, if for no other reason just so you can track all of them correctly.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

The Startup Lawyer

MARCH 17, 2010

7) Founders Equity Split: Depends on the Team, But Quickly and After the Awkward & Difficult Conversations. (8) 8) Vest Founders Shares?: 9) Vesting Schedule for Founders Shares: 4 years with a One Year Cliff. (10) Here’s what I’d do in the beginning: Incorporation. (1) 4) Type of Shares: Common Stock. (5)

Accredited Investor 112

Accredited Investor Delaware NDA Vesting 112

The Startup Lawyer

MARCH 17, 2010

7) Founders Equity Split: Depends on the Team, But Quickly and After the Awkward & Difficult Conversations. (8) 8) Vest Founders Shares?: 9) Vesting Schedule for Founders Shares: 4 years with a One Year Cliff. (10) Here’s what I’d do in the beginning: Incorporation. (1) 4) Type of Shares: Common Stock. (5)

Accredited Investor 112

Accredited Investor Delaware NDA Vesting 112

Gust

NOVEMBER 4, 2011

In brief, a cap acts to place a limit on the conversion price of a convertible note such that investors are guaranteed a minimum number of shares for their bridge loans if the startup does a priced equity round at a high pre-money valuation – “high” meaning above the cap, which is often a heavily negotiated term. (The of MySpace, Inc.

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

Both Sides of the Table

MARCH 21, 2010

I’ve heard the following so many times that it still makes me scratch my head, “if those guys are going to get rich off of our backs then we’re going to look like fools if we don’t have equity.&#. I’ve already made clear that I think raising equity from “strategic money&# is an oxymoron.

Warrant 298

Warrant Dilution Startup Stock Options 298

Austin Startup

SEPTEMBER 19, 2017

in company equity is normal at this stage, with the higher end of the range reserved for leaders of industry who bring more to the table than connections. This amount should vest over some period of time — 2 years is typical — and should be subject to the completion of concrete goals and commitments.

Advisory Board 48

Advisory Board Sweat Equity Marketing Vertical 48

Hunter Walker

AUGUST 24, 2014

The vast majority of my future savings was (a) not vested yet and (b) tied to hope for future stock grants I’d earn. The opportunity cost of a startup in forfeited salary and in-the-money equity at larger tech companies can be considerable. Did I work any less hard the next day because of my liquidity event?

Founder 109

Founder San Francisco Liquidity Event LP 109

Steve Blank

SEPTEMBER 2, 2015

At the same time, as these conversations were going on with the city, as I understand it, Stanford got cold feet and decided they really didn’t want to extend out 3500 miles. What we couldn’t (agree to) was how to split founder equity. Lesson 3: Have the hard conversations up front. Two were half time.

Entrepreneur 120

Entrepreneur New York Cofounder Equity 120

Up and Running

JUNE 2, 2011

This element includes all business resources such as fixed assets, retained earnings, and owner’s equity (cash)—basically all collateral (less debt against said collateral) plus liquid holdings and earnings. If you are not vested, how can you expect a perfect stranger (lender) to be? Business and personal cash are very important.

Vesting 82

Vesting CPA SBA Bankruptcy 82

David Teten

OCTOBER 1, 2015

Not surprisingly, the list above also is ranked from least to most equity stake in an investment for the investor, relative to the cash they invest. How would one set up such a startup to eventually raise capital from outside VCs, who will be wary of ‘dead equity’ (i.e., equity that belongs to departed cofounders)? The cliffs?

Software Developers 60

Software Developers Software Development Software Review Technical Cofounder 60

David Teten

DECEMBER 3, 2019

Private equity and venture capital investors are copying our sisters in the hedge fund world: we’re trying to automate more of our job. . In the private equity universe, most Partners have primary training as deal-makers, not as managers. (To see the video above, please click the image, and then click on the Play button.).

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

ithacaVC

DECEMBER 13, 2013

If no additional equity is ever granted to Founder X and Founder Y, then Founder Y will ALWAYS own 1.63 times more equity than Founder X. QUESTION #4: What if the founders want to grant equity so some advisors that have been working with the company? That is fine, and should be in the form of option grants vesting over time.

Cap Table 67

Cap Table Pre-Money Valuation Option Pool Liquidation Preference 67

Tim Keane

JANUARY 12, 2010

The investors and the entrepreneurs are – or should be – aware that the price of the company’s equity is set by the market – in simplest terms, what an informed buyer is willing to pay.   Note that this applies only to earl stage Series A-type equity financings and assumes no cash dividends are paid to investors.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Gust

SEPTEMBER 17, 2014

These are all real conversations. of the time I have no vested interest in having the debate. What if when you have that conversation you don’t agree? But lawyers will charge much more for equity.” Try doing THAT with equity. I have them all the time. I’m bored of it. And so forth. Not in my experience. Employment.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

ConversionXL

NOVEMBER 6, 2019

Vested Technology spent $17k on their MVP. Vested Technology is a recruiting-automation platform that works alongside teams to identify, engage, and hire passive candidates. Prior to his role at Vested Technology, co-founder and CEO Akash Srivastava worked on Wall Street. He spent $17k to launch Vested Technology’s MVP.

Sweat Equity 78

Sweat Equity Software Review Vesting Cofounder 78

www.quora.com

SEPTEMBER 22, 2011

Type to Add and Search Questions; Search Topics and People Startups Startup Compensation Entrepreneurship Compensation Stock Options Major Internet Companies Silicon Valley Why is there such a large founder to early employee equity drop-off? This ties into this Paul Graham article: [link] /equity. Login if you already have an account.

Equity 40

Equity Employee Founder Cofounder 40

ConversionXL

NOVEMBER 6, 2019

Vested Technology spent $17k on their MVP. Vested Technology is a recruiting-automation platform that works alongside teams to identify, engage, and hire passive candidates. Prior to his role at Vested Technology, co-founder and CEO Akash Srivastava worked on Wall Street. He spent $17k to launch Vested Technology’s MVP.

Sweat Equity 50

Sweat Equity Software Review Vesting Cofounder 50

Startup Lessons Learned

JULY 26, 2011

There are many founder-friendly terms you can push for, from automatic acceleration to reduced vesting - but each risks reducing the alignment of interests between founders and investors. Everything in a term sheet is negotiable - if and only if you already have sufficient leverage. (Do Do you know the sources of leverage in a VC deal?

Antidilution 148

Antidilution Term Sheet Silicon Valley Widget 148

Pascal's View

DECEMBER 30, 2012

Wasserman concludes, backed up by a data set of 10,000 companies compiled over 9 years, that the entrepreneur’s most common choices are the wrong ones, particularly co-founding with friends and splitting equity equally among co-founders at the outset of the new venture.

Cofounder 34

Cofounder Liquidation Preference Vesting Equity 34