Startup Professionals Musings

DECEMBER 8, 2019

A reverse merger is the acquisition of an already public company (usually a dormant shell) to avoid the Initial Public Offering (IPO) process and cost, to quickly get your startup on a public exchange for fund raising through visibility and selling stock. It takes real money to get into the game.

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Merger OTC IPO Due Diligence 303

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. The most obvious way to explain this is with sales people. COGS” represents the amount that each sale costs you. Two-f **g-billion!

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Stock Options Startup Dilution Venture Capital 227

Women Entrepreneurs Can

DECEMBER 30, 2020

It may not be the most cost-effective strategy or even the most convenient, but you can rest knowing that your company is doing its part when it matters most. Look into a printer’s various print methods, paper stock options, and energy usage. Less travel equals less gas consumption, which equals less waste.

Green 52

Green Marketing Stock Options PPC 52

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? Consider it a sales & marketing expense for them. They usually ask for warrants (basically like a stock option) in exchange for taking a deferred fee.

Southern California 318

Southern California Silicon Valley IP Stock Options 318

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

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. It freed up Ophir to grow out our sales organization, to work more closely with agencies, to innovate on product and to raise capital. Stock option top-ups after a few years are vital retention mechanisms.

Operations 150

Operations Metrics Early Stage Non-Compete 150

YoungUpstarts

JULY 17, 2020

The first step in any economic crisis is to evaluate your spending channels, and determine where you can cut costs. If possible, offering stock options in lieu of raises or to counteract pay cuts is another way to build security. As startups pivot to meet the changing landscape, here are four things to consider: 1.

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Startup Wisconsin Stock Options Dividend 287

Startup Professionals Musings

JANUARY 13, 2018

A reverse merger is the acquisition of an already public company (usually a dormant shell) to avoid the Initial Public Offering (IPO) process and cost, to quickly get your startup on a public exchange for fund raising through visibility and selling stock. It takes real money to get into the game.

Merger 198

Merger OTC IPO Due Diligence 198

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 you hire a person in HR or sales, are they willing to dabble in other departments or take on roles that they haven’t done previously? Can you produce venture returns in this new economic reality?

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. How the sale of the company is decided. Stock Option documentation. But these entities will provide you protections from liability and tax savings. IRS Form W-4.

LLC 168

LLC Startup Stock Options Cofounder 168

Startup Professionals Musings

AUGUST 26, 2018

There are real ongoing costs of maintaining a public company. million in annual recurring costs as a result of being public. Public ownerships usually lends prestige and credibility to your sales, marketing, and acquisition efforts, but it may work counter to your vision of saving the world. Exposure to increased liability risk.

Exit Strategy 128

Exit Strategy IPO Initial Public Offering SEC 128

Startup Professionals Musings

MAY 3, 2014

A reverse merger is the acquisition of an already public company (usually a dormant shell) to avoid the Initial Public Offering (IPO) process and cost, to quickly get your startup on a public exchange for fund raising through visibility and selling stock. It takes real money to get into the game.

Merger 246

Merger OTC IPO Stock 246

Startup Professionals Musings

JUNE 6, 2014

There are real ongoing costs of maintaining a public company. million in annual recurring costs as a result of being public. Public ownerships usually lends prestige and credibility to your sales, marketing, and acquisition efforts, but it may work counter to your vision of saving the world. Exposure to increased liability risk.

IPO 236

IPO Initial Public Offering Startup Small Business Administration 236

Up and Running

JUNE 21, 2011

Key managers who are not the sole shareholders of the business can create a huge conflict of interest during a sale and hold shareholders hostage during sale negotiations. Make sure to put in place incentives (like a sale bonus or stock options program) today to avoid eleventh-hour power plays.

Sales 86

Sales Investment Bankers CPA Stock Options 86

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

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. For starters you have to realize that fund-raising is a sales process. A brochure is an easy out for you in the sales process without being rude. It felt like heresy.

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Cap Table Due Diligence Forecast Churn Rate 336

Startup Professionals Musings

AUGUST 7, 2016

There are real ongoing costs of maintaining a public company. million in annual recurring costs as a result of being public. Public ownerships usually lends prestige and credibility to your sales, marketing, and acquisition efforts, but it may work counter to your vision of saving the world. Exposure to increased liability risk.

IPO 120

IPO Initial Public Offering SEC 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.

Entrepreneur 65

Entrepreneur Stock Options Programming Washington 65

Berkonomics

APRIL 4, 2019

Others worry that we will latch onto individual line items within financial data and engage in inquisitions regarding telephone bills, marketing costs and other tactical line items in detailed financial statements. That is one of the many costs of becoming a public entity as many CEO’s have found and dealt with over the years.

Stock Options 48

Stock Options Balance Sheet Stock Common Stock 48

Startup Professionals Musings

JUNE 15, 2015

A reverse merger is the acquisition of an already public company (usually a dormant shell) to avoid the Initial Public Offering (IPO) process and cost, to quickly get your startup on a public exchange for fund raising through visibility and selling stock. It takes real money to get into the game.

Merger 120

Merger OTC IPO Due Diligence 120

Gust

JULY 23, 2012

Donations of private company stock may be an effective and tax-efficient method of giving with significant benefits to the donor. These assets often have a relatively low cost basis (e.g. At a simple level, you can deduct up to 30% of your annual adjusted gross income for the value of a stock donation. The Tax Benefit.

Stock 114

Stock Capital Gains Warrant Stock Options 114

Agile VC

JUNE 5, 2011

The latter typically excludes taxes and non-cash expenses like taxes, depreciation, stock option compensation, etc… Groupon’s Adjusted CSOI is exactly the same but also excludes customer acquisition costs (though these are reported elsewhere). In Q1 2011 Groupon was acquiring new subscribers for $5.53

North America 100

North America Chicago Boston Silicon Valley 100

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. What’s the strike price ($ value per) of the options I’m being granted?

Equity 120

Equity Employee Cap Table Stock Options 120

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. What’s the strike price ($ value per) of the options I’m being granted?

Equity 120

Equity Employee Cap Table Stock Options 120

Both Sides of the Table

FEBRUARY 27, 2019

The law firm has done its job of preparing the stock option requests, board meeting minutes, 409a valuations. This can include: Fund raising, product development choices, sales, marketing effectiveness, competition, business development, M&A … whatever. We travel by airplane to sit around considering 0.02% stock grants?

Stock Options 226

Stock Options Metrics Stock Valuation 226

Startup Professionals Musings

JANUARY 16, 2011

If you have been giving stock options, employees will want you to be a public company, to exercise their rights to buy the stock and sell it at a profit. These can add millions to the cost of doing business. Liquidity can help attract new employees and keep current ones happy. Do you need this for your image?

IPO 223

IPO Social Media Media Exit Strategy 223

www.inc.com

SEPTEMBER 24, 2011

Sales & Marketing | Wednesdays. SALES & MARKETING. 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. The Goods: Your Business Toolbox | Thursdays. Finance | Tuesdays. Innovation | Fridays. Email address: Home.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

Berkonomics

APRIL 14, 2012

Others worry that investors will latch onto individual line items within financial data and engage in inquisitions regarding telephone bills, marketing costs and other tactical line items in detailed financial statements. That is one of the many costs of becoming a public entity as many CEO’s have found and dealt with over the years.

Stock Options 81

Stock Options Balance Sheet Stock Common Stock 81

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. Having worked on many deals that seem to go dark with the other party (think endless sales calls or follow ups) getting back in front of someone in the right way is key.

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. How much control are you willing to sacrifice?

Liquidity Event 139

Liquidity Event Equity Finance Stock Options 139

Gust

DECEMBER 8, 2011

For those of us who do it every day or every week, there is also a “ well-worn path ” involving reams of very familiar-looking documents that will take relatively little time (and therefore cost relatively little in legal fees) to prepare for a new startup. Sales contracts accounting for significant revenue. Caveat entrepreneur !

Intellectual Property 139

Intellectual Property Non-disclosure Agreement Delaware Stock 139

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. We’re both principals in a sale. They hold out.

Term Sheet 319

Term Sheet PR Liquidation Preference Stock Options 319

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. If a consultant claims they can enhance your marketing efforts, pay them based on their direct impact on your incremental sales. Passion Cannot be Outsourced. Pyramid Power.

Equity 40

Equity Silicon Valley Cofounder Technical Review 40

YoungUpstarts

MAY 7, 2015

For example, in most third-party sales with a business broker or investment banking firm, a commission or “success fee” will be charged as a percentage of the sales price. The company just needs to be large enough to generate a profit to substantiate the annual costs of maintaining the ESOP.

Stock 100

Stock Employee Private Equity Valuation 100

Both Sides of the Table

MAY 23, 2010

If no financing happened then this “note&# may not be converted and thus would be senior to the equity of the company in the case of a bankruptcy or asset sale. It’s legitimate to ask for cost cutting if you think the bridge won’t last long enough at the current burn rate. It starts as a debt instrument (e.g.

Startup 290

Startup Burn Rate Warrant Bankruptcy 290

ReadWriteStart

JULY 14, 2011

These are people with whom you can share some type of value, but not tangible value like stock options or payment. Is your head of sales an asshole but growing your company 2X a year? It doesn't cost a lot to write a thank you note, to put two cigars in an envelope and put them in the mail. Your advisory board?

Advisory Board 135

Advisory Board Balance Sheet Silicon Valley Cofounder 135

Tim Keane

JANUARY 12, 2010

It also assumes the entire value of the investment is captured for investors at a sale of the company in the time specified in the term-sheet. This results in a range of sale prices; in this example from $118.6MM to $21MM. Let’s start at the end.   So, let’s assume here we have an 8% non-cumulative dividend.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68