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Equity for Early Employees in Early Stage Startups

SoCal CTO

I was asked by a reader how much equity he should give out to early employees and to service providers in a very early stage startup. Founders vs. Early Employees To help with this discussion, let me start with a definition of "early employee." If the company's valuation is $2 million, $90k is 4.5%.

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What Does the Post Crash VC Market Look Like?

Both Sides of the Table

We drew this conclusion after a meeting we had with Morgan Stanley where they showed us historical 15 & 20 year valuation trends and we all discussed what we thought this meant. But rest assured valuations get reset. First in late-stage tech companies and then it will filter back to Growth and then A and ultimately Seed Rounds.

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5 Equity Distribution Parameters For Key Contributors

Startup Professionals Musings

Investors may not be called cofounders, but they always get equity, commensurate with their share of the total costs anticipated, or share of the current valuation. Of course, all cofounders need to remember that allocated percentages will be diluted as angel and VC investors are brought in. Amount of venture funding provided.

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5 Keys To Negotiating Your Fair Share Of Any Startup

Startup Professionals Musings

Investors may not be called co-founders, but they always get equity, commensurate with their share of the total costs anticipated, or share of the current valuation. Of course, all co-founders need to remember that allocated percentages will be diluted as angel and VC investors are brought in. Amount of venture funding provided.

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

Both Sides of the Table

Other founders, “as a privately held company we don’t disclose our valuation.&# Me, “dude, I’m not a journalist. I just want to figure out what a fair valuation is.&# I figured all the VC’s talked so we should. This starts with understanding how VCs and entrepreneurs often see valuation differently.

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5 Criteria For Splitting Equity In Your New Venture

Startup Professionals Musings

Investors may not be called co-founders, but they always get equity, commensurate with their share of the total costs anticipated, or share of the current valuation. Of course, all co-founders need to remember that allocated percentages will be diluted as angel and VC investors are brought in. Amount of venture funding provided.

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How Much Should You Raise in Your VC Round? And What is a VC Looking at in Your Model?

Both Sides of the Table

There’s a quick litmus-test conversation any early-stage VC will have with the founder and it’s one that you should be as prepared for as your elevator pitch. It’s true that some later-stage private equity firms like to fund “roll ups” (a company that acquires many related companies in it sector), but this is seldom the domain of VCs.

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