Up and Running

DECEMBER 1, 2015

If however you are giving a “normal employee” an incentive stock option plan (more on that later), that’s entirely different. Make sure you understand all of your options before making any decisions. When business owners decide to go down the route of equity compensation, there are two primary options to choose between.

Equity 60

Equity Employee Stock Options Vesting 60

Startup Professionals Musings

SEPTEMBER 9, 2015

Even non-profits need revenue to cover their costs, and continue to provide services. Trying to save money by recruiting family members, or hiring only interns, is a bad risk. Providing everything free, and growing users to the max for years, like Twitter and Facebook, is a high risk approach requiring deep pockets.

Forecast 120

Forecast Startup Stock Options Technical Review 120

www.thedailymuse.com

SEPTEMBER 18, 2012

We’re Hiring. What Start-ups Should Know About Hiring a Lawyer. Hiring and working with a lawyer is often confusing and daunting, especially if you’ve never done it before. What should new entrepreneurs look for when hiring a lawyer? Hiring employees. What’s the typical hourly cost? Job Search.

Hiring 56

Hiring LLC Intellectual Property Private Equity 56

Both Sides of the Table

JUNE 17, 2017

It was a stock option incentive related “expense” but I bet you didn’t know that because in an era where we only read the headlines — they must be a train wreck losing billions. If you don’t have a strong balance sheet and can’t hire more people that’s fine — but understand this may lead to slower growth. Two-f **g-billion!

Stock Options 227

Stock Options Startup Dilution Venture Capital 227

Transformify

SEPTEMBER 5, 2023

Consider cloud-based options for anytime access. Outsource payroll Hiring an external payroll provider can reduce the administrative burden, especially for complex global payroll needs. It can also generate your employees' pay stubs, direct deposits, and tax forms. What are some common payroll errors to watch out for?

Small Business 52

Small Business Software Review Stock Options Software 52

Up and Running

MARCH 7, 2018

Aside from the time-consuming tasks of screening potential employees, interviewing, and re-hiring , losing and replacing employees is expensive. On average, it costs nearly three times an employee’s salary to replace them. This cost includes recruitment, lost productivity, and lost opportunity. Hire the right people.

Employee 91

Employee Startup Salary Hiring 91

Both Sides of the Table

JANUARY 21, 2010

Forget to get around to setting up that Employee Stock Option Plan and want to be able to give the early guys their options at a low strike price? I know he’s smart but you wouldn’t hire a Javascript developer to do your database design – would you? Shame about that pesky FAS 157 ruling.

Southern California 318

Southern California Silicon Valley IP Stock Options 318

Both Sides of the Table

MAY 2, 2015

It’s such a tricky balance between being cost-focused & scrappy versus being impractical with how you spend your time. For a well-funded seed company I have controversially recommended hiring a great office manager that doubles as an administrative assistant. But alas I must scale with businesses and make money.

Operations 150

Operations Metrics Early Stage Non-Compete 150

VC Adventure

AUGUST 15, 2018

At the time, the cost of each of these valuations ran between $10,000 and $15,000 annually for each company. These costs have come down a lot since then, and the rules have been tweaked a bit but the overall 409A framework still is as it was when originally adopted – companies must hire a 3rd party to value their stock each year.

Valuation 48

Valuation Common Stock Cap Table Software Review 48

The Startup Magazine

JUNE 1, 2023

Be honest with yourself VCs are now going to be looking closer at margins, cost structures and true sales, and product market fit. If the best client success person is in Oklahoma instead of LA, we’re going to hire her, (in fact, we did). Hire versatile players and lean into your team The SVB collapse reminded us that staffing matters.

Early Stage 113

Early Stage Los Angeles Silicon Valley Cofounder 113

YoungUpstarts

OCTOBER 24, 2017

There will be additional filing and operation costs for these entities, due to tax, accounting and legal issues. Converting will come at a higher cost. If you plan to hire employees, make sure that you have the appropriate documentation. Stock Option documentation. Hammer Out the Details Between Partners.

LLC 168

LLC Startup Stock Options Cofounder 168

Up and Running

JULY 2, 2014

We had personally invested $70,000 of our own money at this point, and we were hoping to raise at least another $250,000 to help us hire a team, launch our company, and begin to build our product. So we hired another firm to help us facilitate the removal of this clause. Our attorney should have known.

Technical Review 118

Technical Review Angel Investor Due Diligence Dilution 118

www.joelonsoftware.com

MARCH 24, 2010

When we decide to hire someone, the interviewers who were involved in the "hire" decision will sit down with the candidates resume and salary history and figure out what level they will start at. However, we will have: Cost of living adjustments for different markets. Once a year well grant people more stock options.

Software Review 48

Software Review Stock Options Salary Technical Review 48

View from Seed

AUGUST 6, 2015

When someone goes to work for an early startup, the compensation package general includes an annual salary, health insurance, and, instead of fixed-cost performance upside, a percentage of unvested options to purchase equity in the company. It falls on the hiring company to thoroughly explain equity options to their new employees.

Equity 120

Equity Employee Cap Table Stock Options 120

Hearpreneur

DECEMBER 31, 2017

Along with the capital costs of this investment, there was also a steep learning curve that resulted in rookie mistakes. In 2018 I fully expect to move past the initial cost and mistakes and reap from these investments. For example, this year we invested in some expensive software. I like to keep tabs on everything.

Entrepreneur 65

Entrepreneur Stock Options Programming Washington 65

View from Seed

AUGUST 6, 2015

When someone goes to work for an early startup, the compensation package general includes an annual salary, health insurance, and, instead of fixed-cost performance upside, a percentage of unvested options to purchase equity in the company. It falls on the hiring company to thoroughly explain equity options to their new employees.

Equity 120

Equity Employee Cap Table Stock Options 120

Gust

APRIL 9, 2014

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.). The Founder of a company starts by owning all the shares representing ownership of the company.

Dilution 150

Dilution Equity Vesting Stock Options 150

Reid Hoffman

DECEMBER 10, 2020

However, this course of action would have cost the company something even more important–the trust of its guests and hosts. To honor the Alliance it had made with those former employees, Airbnb waived the usual vesting cliff so that they could exercise their stock options, and provided generous severance packages.

Hosting 69

Hosting Hockey Stick IPO Silicon Valley 69

Scalable Startup

AUGUST 9, 2018

They need the money to rent offices, hire staff, and establish their initial presence (website, incorporation, marketing). So far we have no office, minimal travel and other cost cutting, but we are slowly getting stronger and our outside funding needs are getting more strategic. Without funding most tech startups will die.

Technical Cofounder 20

Technical Cofounder Silicon Valley Early Stage Cofounder 20

Up and Running

OCTOBER 13, 2022

Before hiring an advisor, be sure to look into their years of service, legal fees, and track record in successfully establishing growth-oriented ESOPs. For example, plan to set aside 10-15% of the total ownership into an ESOP pool, and allocate the options over a 3 to 4-year vesting period. Setting up an ESOP is expensive.

Vesting 88

Vesting Stock Valuation Stock Options 88

Both Sides of the Table

MAY 19, 2018

A detailed financial model that shows your anticipated revenue, costs and profits (Income Statement) as well as your balance sheet and cashflow statements. I hired a sales coach named Kai Krickle who helped me figure out how to close more deals.

Cap Table 336

Cap Table Due Diligence Forecast Churn Rate 336

www.inc.com

SEPTEMBER 24, 2011

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 Before Roving Software could receive its first round of financing from professional investors, in early 1999, he had to put all the stock arrangements in writing.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

Eric Friedman

JUNE 11, 2019

Whether a fundraising event, hiring, or sales/partnership opportunity- these can be especially useful to make all parties move faster. Candidate Forcing Functions – are hard because you want to hire the best people, hire them fast, and keep your OpEx low. In the end, time will kill all deals.

Term Sheet 68

Term Sheet Stock Options Early Stage Agile 68

The Next Web

MARCH 2, 2014

This process included several rounds of financial forecasting to understand the cost of achieving where we wanted the business and brand to be, and whether we could pay for that cost ourselves. This is the ultimate question to consider when weighing funding options. Take your time.

Liquidity Event 139

Liquidity Event Equity Finance Stock Options 139

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. Lawyer time required: 5 to 10 hours dependent on how fast you are hiring. Lawyer time required: 3 to 6 hours.

Stock Options 58

Stock Options Vesting Subscription Agreement Founder Vesting 58

Both Sides of the Table

AUGUST 18, 2009

What if you have to make really tough calls on cutting costs, biz dev deals, fund raising and you violently disagree on direction? What if the person performs OK, but not great and you need to hire above him? . - What if one guy needs to pay bills and takes a full time job somewhere. Should he/she keep 50%? Who prevails?

Founder 251

Founder Cofounder Equity Stock Options 251

Both Sides of the Table

JULY 19, 2011

When they rep you, the marginal cost of them trying to get you a slightly better deal is high for them relative to settling and moving on. On balance I usually prefer to recruit people from my network both in terms of saving costs as well as hiring people I know & trust. They hold out. They wait for a better offer.

Term Sheet 319

Term Sheet PR Liquidation Preference Stock Options 319

Both Sides of the Table

APRIL 27, 2010

My original post was directed at hiring managers. It said that I didn’t believe it was a good idea to hire job hoppers. My view still stands – for many hiring managers a large factor in looking through resumes of somebody who is 30+ and has never worked somewhere for more than 18 months will be the job hopping element.

Venture Capital 285

Venture Capital Hiring Software Review Stock Options 285

Venture Chronicles

OCTOBER 31, 2010

– If private investors have already bid up the valuation, will there be an IPO jump in the stock price? This breaks the conventional wisdom about pre-IPO stock options. Companies are required to price their employee stock options close to the “market valuation&#.

Valuation 42

Valuation Stock Options Lock-up Period IPO 42

infochachkie.com

SEPTEMBER 24, 2011

For instance, many a BDC CEO has initiated a consultant to study cost cutting issues before announcing a significant layoff. Unlike employee training costs, which can typically be spread over years of service, the relative return from training a consultant is modest and pricey. Pyramid Power.

Equity 40

Equity Silicon Valley Cofounder Technical Review 40

Berkonomics

JULY 10, 2010

There is no rule as to uniformity of pay, as some advisors may be willing to serve at no cost while others are industry consultants used to receiving fair payment for services rendered. I sit on a board of a company with potentially valuable patents that it is exploiting aggressively.

Advisory Board 63

Advisory Board Stock Options Stock Common Stock 63

Berkonomics

AUGUST 27, 2015

They financed their companies, to the extent possible, in a manner minimizing the cost of capital, planning for organic growth in the number of customers served and in associated revenues. Flippers financed by venture capitalists are more likely to hire executives having high level profiles and previous exit experience.

Intellectual Property 48

Intellectual Property Balance Sheet Stock Options Valuation 48

chrischandler.name

NOVEMBER 1, 2010

Investing time in your goals, when they could be developing their own, comes across as a high opportunity cost with an extremely unlikely payoff. Equity to a developer works the same way, except it’s often approached as hiring an employee instead of bringing on an investor. Proof of execution is what matters today, not ideas.

Equity 40

Equity Developer Entrepreneur Syndicate 40

Startup Company Lawyer

JULY 20, 2009

Once again, please keep in mind that the documents from typical online incorporation services do not contain IP assignment provisions in connection with the purchase of founders stock or separate IP assignment documents. Hiring employees or third party contractors. Issuing stock options.

IP 67

IP Stock Options Preferred Stock Capital Gains 67

ithacaVC

JUNE 12, 2011

Examples: (i) hiring, (ii) firing, (iii) workplace harassment, (iv) raising investment capital, (v) borrowing money from a bank, (vi) entering into an agreement with another company, and (vii) creating a stock option plan. We love $1000/hour phone calls; really some have cost that much because there were 2 lawyers on the phone.

Stock Options 45

Stock Options Boston Stock Portfolio 45

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. 3 Dilution. 4 Vesting.

Equity 56

Equity Employee Vesting Preferred Stock 56

The Next Web

SEPTEMBER 6, 2013

While Asia has long been known for its cheap engineering resources and the off-shoring tech phenomenon that took place over a decade ago, the cost gap has narrowed — and even more significantly, so has the quality gap. On average, the cost of relocation for us has been less than $4,000 and we recruit from all over the world.

Silicon Valley 121

Silicon Valley Asia Engineer Stock Options 121