Steve Blank

APRIL 10, 2019

VC’s have just changed the ~50-year old social contract with startup employees. For most startup employee’s startup stock options are now a bad deal. In tech startups stock options were here almost from the beginning, first offered to the founders in 1957 at Fairchild Semiconductor , the first chip startup in Silicon Valley.

Stock Options 333

Stock Options Stock Vesting Common Stock 333

Agile VC

DECEMBER 4, 2014

I like to say that “there are only co-founders” — it’s extraordinarily rare for a successful business to have just a sole founder. But not all co-founders are equal in terms of title, ownership, responsibilities, and so forth. Sometimes co-founders put off the equity split question for some time.

Cofounder 173

Cofounder Equity Founder Sweat Equity 173

Altgate

JUNE 25, 2012

—————– Dead equity — equity held by employees and founders no longer working at the company — is a large and growing problem. Imagine how much tougher a dead-equity dilemma becomes when co-founders, who tend to hold large equity stakes, are involved. Noam Wasserman on Inc.

Equity 44

Equity Vesting Cap Table Technical Review 44

Gust

DECEMBER 1, 2011

Notice what is missing from this list of priorities: The company itself – that is, a business entity, most often a corporation , that will own the entire business (however defined), issue equity to founders, take investment capital , enter into contracts, make sales, pay employees and contractors, and so forth.

IP 114

IP Intellectual Property Equity Liquidity Event 114

Reid Hoffman

DECEMBER 10, 2020

These are really good founders and I think this is an interesting space.” Further, when additional people kept mentioning Airbnb to me and praising the founders, I should have asked myself how a smart, capable person would refine the idea.). Those two minutes showed me that Airbnb’s founders wanted to play in the big leagues.

Hosting 69

Hosting Hockey Stick IPO Silicon Valley 69

Steve Blank

OCTOBER 24, 2017

Why do these founders get to stay around? Because the balance of power has dramatically shifted from investors to founders. VCs competing for unicorn investments have given founders control of the board. A pre-IPO board usually had two founders, two VCs and one “independent” member. Technology Cycles Measured in Years.

Founder 245

Founder Technical Review CTO Hire IPO 245

Gust

APRIL 9, 2014

The Founder of a company starts by owning all the shares representing ownership of the company. Over time, other people receive pieces of equity in exchange for work (employee stock options), money (seed, angel and venture investors), services (attorneys, directors, etc.). original post can be found on Quora @ [link] *.

Dilution 150

Dilution Equity Vesting Stock Options 150

The Startup Magazine

JULY 19, 2020

Many law firms simply use the last name of their founder, or combine multiple names together. Of course, all employees should be loyal, skilled, and trustworthy. Ideally, senior staff will have experience in the niche of DUI law or a vested interest in practicing it. The benefits they provide should justify any cost.

Vesting 150

Vesting Reputation Hiring Community 150

Altgate

AUGUST 25, 2012

—————– Dead equity — equity held by employees and founders no longer working at the company — is a large and growing problem. Imagine how much tougher a dead-equity dilemma becomes when co-founders, who tend to hold large equity stakes, are involved. Noam Wasserman on Inc.

Equity 28

Equity Vesting Cap Table Technical Review 28

Hunter Walker

AUGUST 24, 2014

When Google went public in August of 2004 one of the first things I did with my employee grants was sell enough to pay off my student loans. The vast majority of my future savings was (a) not vested yet and (b) tied to hope for future stock grants I’d earn. Did I work any less hard the next day because of my liquidity event?

Founder 108

Founder San Francisco Liquidity Event LP 108

Startup Professionals Musings

AUGUST 7, 2013

Here are five of the most common examples: Failure to document a Founder agreement at the beginning. This oversight can lead to the so-called “forgotten Founder” problem. Trouble with the IRS over Founders stock value. Entrepreneurs often put off the hassle and the cost of filing a patent until first funding.

Non-Compete 235

Non-Compete Accredited Investor Startup Cofounder 235

The Next Web

AUGUST 26, 2013

Editor’s note: This is a guest post by Christian Reber, CEO and co-founder of Berlin-based 6Wunderkinder. 10-20% for employees. Be generous with shares to your employees, they are your capital and most important resource. But never give away shares without vesting. 60-70% for founders.

Management 120

Management Cofounder Startup Bootstrapping 120

Startup Professionals Musings

JULY 10, 2012

Here are five of the most common examples: Failure to document a Founder agreement at the beginning. This oversight can lead to the so-called “forgotten founder” problem. Trouble with the IRS over Founders stock value. Entrepreneurs often put off the hassle and the cost of filing a patent until first funding.

Non-Compete 249

Non-Compete Accredited Investor Cofounder Startup 249

Austin Startup

AUGUST 20, 2017

Startups often hand out shares, options, and warrants for employees and for contractors rendering needed services. 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. Kalanick, former investor BFF turned highly disappointed by founder behavior.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

www.seriesseed.com

DECEMBER 9, 2012

It would be helpful to get a California standard employee manual, employee contract/agreements, IP ownership release to company, and confidentiality. All of those cost us as much if not more in legal time than the seed round. it is acquired) and (b) the employee is terminated without cause (or sometimes resigns for good reason).

Finance 40

Finance Term Sheet Vesting LLC 40

Startup Professionals Musings

MAY 2, 2011

Here are five of the most common examples: Failure to document a founder agreement at the beginning. This oversight can lead to the so-called “forgotten founder” problem. Early co-founders often drop out of the picture due to disagreements, and you forget about them, but they don’t forget about the verbal promises you made.

Non-Compete 246

Non-Compete Accredited Investor Entrepreneur Cofounder 246

www.thedailymuse.com

SEPTEMBER 18, 2012

It’s essential to make sure you take reasonable steps to control risk in your interactions with customers, suppliers, users, employees, and the general public. When multiple people form a company together, it’s best to establish the rights and expectations of the founders upfront in case there are disagreements down the line.

Hiring 56

Hiring LLC Intellectual Property Private Equity 56

www.payne.org

SEPTEMBER 22, 2011

Startup Equity For Employees. 4 Vesting. 6 Founders / Restricted Stock. UPDATE: If youre a founder or near-founder, your equity terms are likely defined by the funding terms negotiated with the investors. Vesting is usually linear: 25% vested after 1 year, 50% after two, 75% after three, etc.

Equity 56

Equity Employee Vesting Preferred Stock 56

www.inc.com

SEPTEMBER 24, 2011

Employee Benefits. Back in 1997, Randy Parker was staring at a blank whiteboard, wondering where hed find the money to hire the employees and consultants he needed to build his new product. "We a 50-employee provider of e-marketing solutions to small and midsize businesses, based in Needham, Mass. "We Business Taxes.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

blog.aparttimecto.com

OCTOBER 23, 2010

Unless you’re fortunate to have one or more technical founders, you’ll quickly be faced with this simple question: Do we hack out a prototype somehow, find a developer or outsource the development? Create the prototype yourself Pros: Cheap - this only takes up the time of your and your founders.

CTO Hire 40

CTO Hire Fractional CTO Equity Vesting 40

Both Sides of the Table

SEPTEMBER 18, 2014

Less than you’ll probably grant your most junior employees in stock options? I know how to structure around that to protect the founders from getting screwed on a multiple liquidation preference. But most VCs don’t bother so many convertible note founders get screwed and never know it until they sell their companies.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Gust

DECEMBER 8, 2011

Likewise, founders can benefit from understanding basic characteristics of the overall legal structure, formation and governance documents, rights and responsibilities of team members, etc. Determine who will serve on the Board of Directors and in executive officer positions (usually founders). Offer letters for employees.

Intellectual Property 139

Intellectual Property Non-disclosure Agreement Delaware Stock 139

Startup Professionals Musings

APRIL 19, 2010

Here are some examples: Failure to document a founder agreement at the beginning. This shortcut can lead to the so-called “forgotten founder” problem. Early co-founders often drop out of the picture due to disagreements, and you forget about them, but they don’t forget about the verbal promises you made. Marty Zwilling.

Non-Compete 125

Non-Compete Accredited Investor Startup Cofounder 125

Duct Tape Marketing

SEPTEMBER 30, 2022

And it was really the founder, our founder David, and he, it was really about, there has to be this better way, right? So we're starting up some PR motions that are doing really well and executive communications, things that are usually a little bit make people nervous because you can't get straight to the cost of acquisition, the ltv.

Marketing 75

Marketing Differentiation B2C PR 75

Transformify

DECEMBER 22, 2019

I’ve seen lots of startup founders making the same mistake – spending all the funding they have on headcount and expensive and inefficient marketing campaigns. Even more, some founders are not interested in the churn rate at all early on. Let’s go back to the example with Transformify. About the author.

Affiliate 91

Affiliate Revenue Churn Rate Programming 91

The Next Web

OCTOBER 7, 2013

They were referring to non-founder engineers, most commonly the first hire for technology businesses. is frequently granted ownership significantly less than that of the founders. However, at the very early stage, they are taking as much risk with their future as the founders. Engineer #1?

Engineer 129

Engineer Dilution Option Pool Vesting 129

ConversionXL

NOVEMBER 6, 2019

Mike Arsenault and his two co-founders—all with technical backgrounds—built their MVP while working full time for other SaaS companies. “We We also got lucky and qualified for some startup benefits with companies like Rackspace, who covered our infrastructure costs for the first year,” continues Arsenault. “We

Sweat Equity 78

Sweat Equity Software Review Vesting Cofounder 78

ithacaVC

JUNE 20, 2011

Cost is the overriding issue for startups when it comes to properly engaging a lawyer. My general retort on this point is this: expect to incur real lawyer costs and get over it. Setting up a legal entity that will have multiple owners from inception (like 2 or more founders) requires good lawyer input.

Stock Options 58

Stock Options Vesting Subscription Agreement Founder Vesting 58

Tim Keane

JANUARY 12, 2010

  It is very expensive if you’re the entrepreneur since it doubles the cost to the company of paying dividends to the entrepreneur. These include: ·       Vesting of Founder Stock.   I’ve never seen it in practice. Second a liquidation preference and a participation.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Hippoland

DECEMBER 18, 2016

Dear elizy : What’s reasonable for a founder salary? But hopefully you were able to recoup the cost of it prior to starting this company. The cost of living will influence your salary a lot. Your cost to get a startup up and running in the Bay Area will probably be about 2-5x higher than say in Las Vegas.

Las Vegas 48

Las Vegas Salary Burn Rate San Francisco 48

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? Visibility at a Series D-funded company is much different than that at a seed-funded one.

Equity 40

Equity Employee Founder Cofounder 40

Altgate

APRIL 28, 2012

Since 2000, I’ve been collecting information about startups, including how much founders, their lieutenants, and their employees get paid. The big difference is in equity: Startup CEOs who are not founders get 6.2 Founders make more than everyone else. I call this the “founder discount.” Myth number 2.

Silicon Valley 50

Silicon Valley Vesting New York City Equity 50

Diego Basch

JUNE 21, 2012

The purpose of this post is to analyze the folowing problem: Joe Founder comes to Silicon Valley with a laptop full of dreams, but no money. Because they will keep 20% equity each at the time of the acquisition, that means $6M each before taxes and vesting. A struggle between founders and VCs ensues. What should Joe do?

Silicon Valley 78

Silicon Valley Las Vegas San Francisco Vesting 78

Both Sides of the Table

AUGUST 17, 2009

These periods of time can leave a founder very vulnerable in the future. These same people will join you and your one other co-founder (maximum) 6 months later when you’ve established the company, done your Powerpoint deck, built a prototype or product and started fund raising discussions. Founder vesting.

Founder Vesting 365

Founder Vesting Intellectual Property Stock Options IP 365

www.noamwasserman.com

MARCH 26, 2012

Since 2000, I’ve been collecting information about startups, including how much founders, their lieutenants, and their employees get paid. The big difference is in equity: Startup CEOs who are not founders get 6.2 Founders make more than everyone else. I call this the “founder discount.” Myth number 2.

Silicon Valley 40

Silicon Valley Vesting New York City Equity 40

Gust

SEPTEMBER 17, 2014

Less than you’ll probably grant your most junior employees in stock options? I know how to structure around that to protect the founders from getting screwed on a multiple liquidation preference. But most VCs don’t bother so many convertible note founders get screwed and never know it until they sell their companies. Me: I know.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

ConversionXL

NOVEMBER 6, 2019

Mike Arsenault and his two co-founders—all with technical backgrounds—built their MVP while working full time for other SaaS companies. “We We also got lucky and qualified for some startup benefits with companies like Rackspace, who covered our infrastructure costs for the first year,” continues Arsenault. “We

Sweat Equity 50

Sweat Equity Software Review Vesting Cofounder 50