Both Sides of the Table

SEPTEMBER 28, 2014

Plus, most early-stage M&A fails so this isn’t likely a good use of capital for a young company). We want a strong balance sheet (um, ok. but that’s our firm’s money on your balance sheet. if you have a good use for it and we’re excited about your company – fine.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

Both Sides of the Table

JUNE 5, 2015

In the old days there usually weren’t convertible notes on early-stage deals and there weren’t party rounds with 20 angels or 6 seed funds. So how DOES a VC think about financings at early stages? If you’re a solo founder and haven’t built out your team or engineers I’m likely to want 15+%.

Pre-Money Valuation 150

Pre-Money Valuation Option Pool Post-Money Valuation Dilution 150

ReadWriteStart

SEPTEMBER 10, 2010

You can get cash without diluting your ownership in the company. As far as customer acquisition is concerned, we discussed, again the power of organic search engine optimization. She has a master's degree in electrical engineering and computer science from the Massachusetts Institute of Technology.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

The Next Web

OCTOBER 7, 2013

“It kinda sucks to be engineer #1.”. That’s what a couple of my friends – engineers at Google and Bloomberg who have been following the rise of startup culture with intrigue – told me recently. They were referring to non-founder engineers, most commonly the first hire for technology businesses. Engineer #1?

Engineer 129

Engineer Dilution Option Pool Vesting 129

Berkonomics

MARCH 21, 2019

It is also a factor that early stage investors don’t want a controlling interest in your company. Engineer” your needs if possible so that you give 20-35% to investors on the first professional investor round. Completing this exercise often leads you to lower your expectations about the amount of money to be raised.

Hockey Stick 63

Hockey Stick Liquidity Event Valuation Balance Sheet 63

A Smart Bear: Startups and Marketing for Geeks

JUNE 12, 2012

(from his blog post ) …some civil engineers think the world of project management in their field is ripe for revolution, but do I know enough of them? I talked to 30 people before I realized that a certain idea of mine was a crappy idea, and about 40 people before starting WP Engine. How many should I talk to?

Customer 252

Customer Customer Development Dilution Engineer 252

View from Seed

APRIL 16, 2015

An easy way to think about it is that value over time doesn’t go up and to the right in a straight line like this: Instead, it’s more of a stair step like this: So, what are the value inflection points that create the stair steps, and how does one think about it at the earliest stages? These might include: Bring on a technical co-founder.

Seed Stage 120

Seed Stage Cofounder Early Stage Startup 120

www.instigatorblog.com

OCTOBER 23, 2010

.&# But having thought about this for some time, I’m not sure the numbers provided as guidelines above really do incent early employees to have an emotional ownership of the product and company. This is especially true when you think of a tech startup, where the first few hires are typically engineers/programmers.

Equity 41

Equity Employee Startup Vesting 41

Hunter Walker

JANUARY 15, 2016

So I was thrilled to find CleverPet , an AI game for dogs made by animal behavioral scientists and electrical engineers. Social benefit companies also have access to impact investors which can provide 6 & 7 figure zero-dilution grants, which are an early stage secret weapon. It just took another 1st place at CES.

Technical Review 48

Technical Review Startup Cofounder SMS 48

David Teten

NOVEMBER 17, 2011

In particular, this model is designed to help all team members understand the impact of dilution on their options. Enter Raul: This capital table startup options valuation model was created with the purpose of valuing options for an illiquid, early-stage start-up. I couldn’t find one online, so I built it.

Employee 155

Employee IRR Startup Mexico 155

rapidrollout.wordpress.com

JANUARY 15, 2011

By deciding to use a consulting CTO on a temporary basis, you avoid getting stalled in the earliest stages. And finally, you may be able to avoid diluting your equity. Preserve your equity by using a consulting CTO to ramp up your company before securing early-stage financing and hiring a permanent technology partner.

Fractional CTO 40

Fractional CTO CTO CTO Hire Fractional VPE 40

David Teten

JANUARY 21, 2021

VI: Revenue-based financing: The next step for private equity and early-stage investment. Jonathan Bragdon , CEO, describes Capacity as “a team of founders-turned-funders making non-dilutive, founder-aligned investments of $50-$300k in post-startup, post-revenue businesses planning to 2X revenues in 12-24 months.

Equity 78

Equity Revenue Cofounder Colorado 78

keen.io

FEBRUARY 5, 2013

Engineer, arranger, communicator, amateur photographer. These were the best resources I found: Equity for Early Employees in Early Stage Startups. Startup Equity for Early Employees. Assumption: The pre-dilution amount prior to Series A should be approximately double the amount in this post-Series-A chart.

Salary 50

Salary Equity Startup San Francisco 50

This is going to be BIG.

DECEMBER 28, 2013

The classes got too big and quality was diluted because, by PG''s own admission, YC " grew too fast.". You could argue that the recent companies are too early, so I''ll take that challenge and compare it with my own portfolio. Of the 20 teams, only half count an engineer as a founder or co-founder. That''s less than 10%.

Venture Capital 152

Venture Capital Cofounder IRR Dilution 152

David Teten

DECEMBER 2, 2019

I’m now researching non-dilutive funding for Action Tank , a startup I’m gestating to “Make America Functional Again”. I worked with outsourced research firm Wonder * to identify all of the institutions we could who support tech impact startups with cash and community, and in many cases without dilution. Summit Fellows.

Technical Review 60

Technical Review SBIR Dilution Silicon Valley 60

www.payne.org

SEPTEMBER 22, 2011

3 Dilution. The total preference is less of an issue in early stage companies (e.g. However, it can be a significant issue in later stage companies that have raised a lot of money. Those new shares are created out of thin air by the company, and will dilute all of the current stockholders. diluted) terms.

Equity 56

Equity Employee Vesting Preferred Stock 56

View from Seed

SEPTEMBER 9, 2014

For most of my career, I’ve served startups and early-stage companies as an operating executive or advisor. So when founders lose focus, they dilute their power and effectiveness, which diffuses the force of their impact. When should founders hire one? Based on what criteria? Assessing Opportunities & Challenges.

Hiring 336

Hiring Cofounder Startup Technical Cofounder 336

Business Plan Blog

OCTOBER 4, 2013

This is true for early stage funding as well as venture capital funding. Rather, give titles such as VP of Engineering, Product/Technology, Sales, Marketing, Finance, etc. Having too many co-founders will only lead to your eventual dilution. Early Stage. Hiring the right people at the right time is key.

Part-Time VPE 79

Part-Time VPE Fractional VPE Cofounder CTO Hire 79

www.startupnorth.ca

OCTOBER 23, 2010

But for every founder, there is an early employee that takes near equal risks in joining an early-stage company. This should force companies to think about building value with each early hire, and not just filling a position. Lead Engineer 0.5 – 1 5+ years experience Engineer 0.33 – 0.66

Employee 41

Employee Founder Salary Equity 41

The Next Web

JANUARY 24, 2014

We have three universities in the top 100 of the Shanghai ranking for engineering and technology. Think of Werner Vogels (CTO of Amazon), Guido van Rossem (founder of Python programming language and senior engineer at Dropbox) or the more senior Gerard Kleisterlee (chairman of Vodafone). The Dutch are an entrepreneurial bunch.

Netherlands 143

Netherlands Technical Review Stock Silicon Valley 143

David Teten

OCTOBER 1, 2015

At the same time, a direct equity investment (one where the dev shop acquires a share in the company immediately) puts the founders in a potentially uneasy position of having to dilute their company before a product is built. HappyFunCorp employs 80 engineers and product architects. Rock Health).

Software Developers 60

Software Developers Software Development Software Review Technical Cofounder 60

The Next Web

OCTOBER 3, 2012

There is no doubt about it — startups offer some amazing opportunities to exercise Computer Science and Systems Engineering knowledge. Engineering friends of mine regularly marvel at the amount of data companies like Google, Amazon, and Netflix (who were once startups, alas no longer) have to process, analyze, and serve.

Cofounder 155

Cofounder Technical Cofounder Technical Review Software Review 155

Austin Startup

MARCH 7, 2021

In 2019 and 2020, we saw hundreds of millions of dollars in non-dilutive funding go to Texas startups, most of which had never worked with the government before. With science and engineering breakthroughs ingrained in the fabric of Houston’s economy, the region has become a thriving hub of digital technology talent.

Texas 90

Texas San Antonio Houston Dallas 90

Seeing Both Sides

OCTOBER 24, 2015

The problem is that many early-stage companies have no idea what their average, long-term churn rate really is because they are simply too young. Thus, the cost of capital for a start-up (and the dilution a founder faces in exchange for that capital) is very high. But you are not mature.

Churn Rate 20

Churn Rate Early Stage Revenue Metrics 20

Pascal's View

JANUARY 28, 2010

Startups, the engine of American innovation and an important source of job growth nationally, took a severe beating in 2009 because so few were funded by the venture community. And the issue of equity dilution, always high on the CEO’s agenda, often clashes with the agenda of all venture backers.

Management 53

Management Silicon Valley Virginia Seattle 53

The Next Web

AUGUST 19, 2013

Mikita Mikado is a software engineer and entrepreneur from Belarus, now based in San Francisco. It’s always better to be earn money, not just raise it, as money you earn doesn’t dilute your ownership and reassures your investors. I’m a geek and software engineer from the former ­Soviet state of Belarus.

Belarus 137

Belarus Viral Channel Startup 137

Reid Hoffman

AUGUST 17, 2021

Greylock investor Sridhar Ramaswamy , who co-founded search engine startup Neeva , says it’s more important for startups to think about creating a product that is useful and resonates with people before worrying about whether a large incumbent is doing it. Costco, it turns out, is the ultimate subscription engine. How did HBO innovate?”

Cofounder 69

Cofounder Differentiation Search Advertising 69

Reid Hoffman

AUGUST 17, 2021

Greylock investor Sridhar Ramaswamy , who co-founded search engine startup Neeva , says it’s more important for startups to think about creating a product that is useful and resonates with people before worrying about whether a large incumbent is doing it. Costco, it turns out, is the ultimate subscription engine. How did HBO innovate?”

Cofounder 69

Cofounder Differentiation Search Advertising 69

www.paulgraham.com

APRIL 28, 2010

Sometimes angels deal terms are as fearsome as VCs.Other angels, particularly in the earliest stages, will invest basedon a two-page agreement. Whatkind of anti-dilution protection do they want? Angels and even VC firms occasionally do this, but they alsoinvest at later stages. The problems are different in the early stages.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

blog.nahurst.com

JULY 19, 2010

I assume both cofounders will be diluted equally as more employees and investors get involved. 6c] Non-technical cofounder has MBA -0%: (this is my opinion) In the early days of a startup, an MBA doesnt help much. Check out Hirelite.com if youre interested in participating as a company or software engineer.

Technical Cofounder 43

Technical Cofounder Cofounder Equity Salary 43

www.paulgraham.com

OCTOBER 23, 2010

You make elaborate plans for a product, hire a team of engineers to develop it (people who do this tend to use the term "engineer" for hackers), and then find after a year that youve spent two milliondollars to develop something no one wants. They get the same kind of stock and get diluted the same amount in futurerounds.

Startup 105

Startup Cofounder Software Stock 105

maplebutter.com

JANUARY 8, 2013

If you’re looking for a designer, engineer, or biz marketing guy – go to meetups / conferences that those people would go to. With that live, you’ll be able to show other smart engineers and advisors that you’re willing to take some risk and build something. When it comes to early stage investing – it’s all gut.

Technical Review 44

Technical Review Startup Cofounder Software Review 44

SVPG

OCTOBER 22, 2015

Part of what causes confusion is a dilution of what is really meant when we call something a “product” or “product-quality” or “productized” or “live in production." It’s where most of the time goes when our engineers are building. As such, we try very hard not to waste this effort.

Engineer 60

Engineer Dilution Software Early Stage 60

Reid Hoffman

NOVEMBER 14, 2018

For example, one blitzscaling tactic that Uber has employed to speed up engineering hiring is to ask each new hire for the contact information of his or her three smartest engineering friends. But it is also clearly faster, and has allowed Uber to grow its engineering team (which is typically a major challenge) at higher rate.

Engineer 28

Engineer Burn Rate Hiring Dilution 28

Up and Running

JULY 14, 2015

Peter: Techstars is probably the most famous accelerator but the idea of the accelerator versus the incubator because there is living field, because there’s this very early stage fields for them both. The cool thing is with the device like, that with the science like that, there’s a lot of early stage proving ground needed.

Incubator 60

Incubator Email Startup Oregon 60

www.paulgraham.com

APRIL 28, 2010

Dilution is normal. They cant dilute you without diluting themselves justas much. And they wont dilute themselves unless they end up net ahead. So its your choicewhether you get diluted. [ Theres no real answer.There is no rational way to value an early stage startup. How much does an angel invest?

Angel Investor 63

Angel Investor Syndicate Syndication Dilution 63

Life Beyond Code

SEPTEMBER 27, 2011

And today, we have a group of early adopter premium members who are making good use of the program. Premium member Ajit Narayen, Engineer and Founder at Invention Labs in Chennai, India, was named one of the world’s top 35 innovators by MIT Tech Review for 2011 and was named Innovator of the Year India several months back.

Programming 116

Programming Silicon Valley Bootstrapping Technical Review 116