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8 Keys To Maximizing Your New Venture Stock Net Worth

Startup Professionals Musings

Make sure the government waits for a stock sale to collect taxes. This is called stock dilution control. Investors typically demand preferred stock to give them more control and first payouts, but these advantages can be at least partially offset (up to 20 percent) if you plan ahead. In the U.S.,

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How To Prevent Your Founder’s Shares From Vaporizing

Startup Professionals Musings

Make sure the government waits for a stock sale to collect taxes. This is called stock dilution control. Investors typically demand preferred stock to give them more control and first payouts, but these advantages can be at least partially offset (up to 20 percent) if you plan ahead. In the U.S.,

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A Different Path To Startup Success: How To Avoid Taking Money And Losing Control

YoungUpstarts

Also, determine the market demand to make sure what you’re doing is sustainable. Investing more money in stage one won’t really help, as spending twice as much on sales won’t produce twice the sales. If truth be told, it’s easier to raise funds when you don’t really need it, like just after a big sale.

Cofounder 102
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7 Investor Term Sheet Demands Startups Need Not Fear

Startup Professionals Musings

What they worry about is a whole different set of issues, including how much control they will have over how their money is spent, what will happen when future investors jump in to dilute their position and how they will get some money back if things don’t go according to plan. Terms to prevent equity dilution relative to others.

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10 Startup Founder Decisions That Have No Good Answer

Startup Professionals Musings

Don’t wait for the harsh reality of the demanding business world to start thinking about these tradeoffs. The downside is loss of control and financial dilution. If you take investor money, expect a push for hockey-stick growth and a liquidity event, like going public (IPO) or sale (M&A), to get the payback.

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Want to Know How VC’s Calculate Valuation Differently from Founders?

Both Sides of the Table

So taking the same fund raising round and assuming that the VC wants the options including before he or she funds (and before is totally standard) then the math works like this: Assuming a 15% option pool post funding then you need a 20% option pool pre funding (because the pool gets diluted by 25% also when the VC invests their money).

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Containing Growth Chaos: Five Things To Do When Your Company Is On The Upswing

YoungUpstarts

As your business thrives, the providers who support you with banking, marketing and other services should change as your demands change. Growth places new demands on business, and with this comes an opportunity to reevaluate core functions and operations. Re-set the vendor and partner paradigm. Know when to say “no.”.

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