Up and Running

JULY 1, 2020

While it’s called a business plan, it can be written and utilized to successfully enter a new market, launch a product, or weigh the potential of adding an employee. Executive summary: This short summary quickly informs your employees, lenders, and investors about the nature and benefits of the expansion. Mission, vision, and values.

Business Plan 152

Business Plan Forecast Operations Dilution 152

Both Sides of the Table

JANUARY 4, 2014

The lack of team cohesion and respect for individuals has probably been one of the biggest weaknesses of Zynga – at least from nearly EVERY employee I’ve ever talked to who worked there. She started it with a partner, 50-50. Equity for the future? We were roughly the same age as their kids and hung out a bit.

Founder 340

Founder Sacramento Cofounder Technical Review 340

www.mattbartus.com

SEPTEMBER 24, 2011

Equity for Consultants – Keep it Simple! posted Feb 3 in Equity , People issues. I can’t tell you how often a client calls me up and says something like this: “Matt, we have this great new consultant who is going to make introductions to us to [pick type of business partner]. link] mattbartus. Categories.

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

David Teten

SEPTEMBER 2, 2017

It’s hard enough to get a job at a venture capital or private equity firm; it’s even more complex to join as a Partner. Also see Preqin’s Key Due Diligence Considerations for Private Equity Investors. . VC and private equity are very illiquid on both the investing and the personnel side. So assessing fit is critical.

Private Equity 60

Private Equity Venture Capital Equity Partner 60

Startup Professionals Musings

AUGUST 10, 2019

The downside is loss of control and financial dilution. Old co-workers or new friends with complementary skills usually make the best partners. You have very little money, and you don’t want to give away your equity. Giving equity is realistic, but base it on contribution and role, with vesting after time and milestones.

Hockey Stick 243

Hockey Stick Cofounder Liquidity Event Startup 243

David Teten

NOVEMBER 17, 2011

In particular, this model is designed to help all team members understand the impact of dilution on their options. Such a model is particularly helpful for those founders looking for a co-founder or key employee. I couldn’t find one online, so I built it. Download the Startup Options Valuation model here.

Employee 155

Employee IRR Startup Mexico 155

Both Sides of the Table

MARCH 21, 2010

I’ve heard the following so many times that it still makes me scratch my head, “if those guys are going to get rich off of our backs then we’re going to look like fools if we don’t have equity.&#. I’ve already made clear that I think raising equity from “strategic money&# is an oxymoron.

Warrant 298

Warrant Dilution Startup Stock Options 298

Startup Professionals Musings

DECEMBER 14, 2014

The downside is loss of control and financial dilution. Old co-workers or new friends with complementary skills usually make the best partners. You have very little money, and you don’t want to give away your equity. Giving equity is realistic, but base it on contribution and role, with vesting after time and milestones.

Hockey Stick 268

Hockey Stick Cofounder Entrepreneur Liquidity Event 268

Startup Professionals Musings

AUGUST 19, 2017

The downside is loss of control and financial dilution. Old co-workers or new friends with complementary skills usually make the best partners. You have very little money, and you don’t want to give away your equity. Giving equity is realistic, but base it on contribution and role, with vesting after time and milestones.

Hockey Stick 144

Hockey Stick Cofounder Entrepreneur Liquidity Event 144

Startup Professionals Musings

JULY 19, 2013

The downside is loss of control and financial dilution. Old co-workers or new friends with complementary skills usually make the best partners. You have very little money, and you don’t want to give away your equity. Giving equity is realistic, but base it on contribution and role, with vesting after time and milestones.

Founder 245

Founder Hockey Stick Cofounder Liquidity Event 245

Both Sides of the Table

MAY 9, 2011

Conventional wisdom says that you gain far more in working as a team than you lose by diluted by half before you start. You often have very limited perspective on whether this person will continue to be a great partner 2 years down the line, 4 years down the line, 8 years down the line. Give them a large sum of equity.

Cofounder 393

Cofounder Founder Vesting Founder Vesting 393

The Next Web

OCTOBER 21, 2013

Neil Rimer is a Partner and co-founder of Index Ventures. In many cases we have observed, the founders have given away too much equity to their first investors — typically angels and family offices, who have little experience with fast-growing startups or the venture capital funding model.

Cap Table 128

Cap Table Option Pool Angel Investor Entrepreneur 128

thinkspace.com

SEPTEMBER 7, 2012

How to Divide Equity to Startup Founders, Advisors, and Employees. The part that I’d like to zero in on is when you’ve got a high growth company what are some of the best practices out there to distribute equity to the founders, advisors, and employees? Equity for Founders. Equity for Employees.

Equity 62

Equity Employee Founder CTO Hire 62

Austin Startup

NOVEMBER 25, 2018

It was there that I met Eric Simone (one of the first investors in Bazaarvoice) as well as Josh Baer (one of the first investors in Bazaarvoice through his team building our first solution and getting paid primarily in equity versus cash). I failed to do that with Coremetrics and I paid dearly for it with dilution.

Bootstrapping 48

Bootstrapping Austin Equity Cofounder 48

Austin Startup

OCTOBER 4, 2017

Dilution, overvaluation, free money, TNSTAAFL, and how to deal with VCs like a pro. First time founders are typically the most likely to object to dilution when fundraising. They do this to avoid dilution, which on the surface seems like a good idea, but can prove deadly to your start up when you get to the A round.

Dilution 59

Dilution Valuation Equity Balance Sheet 59

venturehacks.com

SEPTEMBER 22, 2011

The Equity Equation. As this nuclear winter of venture hacks continues, I thought you might enjoy our thoughts on Paul Graham’s The Equity Equation. ” Read the rest of The Equity Equation first; it is great. You have to pay market rates regardless of the equity equation. by Nivi on July 19th, 2007. Summary: 1.

Equity 40

Equity Cap Table Valuation RSS 40

VC Cafe

FEBRUARY 27, 2024

In smaller funds, ticket sizes tend to be lower, so pre-seed is the only stage where micro funds are able to secure their minimum equity targets. Sam Altman recently said that we’re not far from the day that we’ll see a billion dollar company with one or few employees.

Valuation 186

Valuation Software Review Generative AI Technical Review 186

Austin Startup

MARCH 7, 2021

These are all potential customers and strategic partners for startups. 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. More than 50 Fortune 500 companies are headquartered in Texas and six of the Fortune 50.

Texas 90

Texas San Antonio Houston Dallas 90

Berkonomics

NOVEMBER 23, 2023

Here is the warning: The execution of equity allocations and of a good incentive program using equity is often mismanaged, damaging the corporate capitalization structure and even affecting the outcome of subsequent investment into the company. … Equity is divided between the founders and the business begun.

Equity 62

Equity Stock Options Vesting Early Stage 62

The Next Web

OCTOBER 7, 2013

Quite frankly, waiting provides more assurance around employment risk without the commensurate sacrifice in equity comp. From the perspective of my outside friends, why are employees that so clearly impact the growth trajectory of a company look like they’re getting screwed? Facebook’s engineer #100 isn’t doing poorly.

Engineer 129

Engineer Dilution Option Pool Vesting 129

Both Sides of the Table

APRIL 25, 2011

The founders could reinvest this in growth (0% tax, focus on future equity growth) or take the profits of $12 million and divide amongst the founding partners. You don’t necessarily want to take on the extra employees and risks. Higher risk, higher reward than joining as a junior employee somewhere else.

Silicon Valley 332

Silicon Valley IP Dividend Finance 332

VC Cafe

SEPTEMBER 26, 2010

I’ve written a post about the need to “Always be closing&# whether it is fundraising, employee/partner recruitment and new customer sales. That said, the more you raise, the more equity you have to give, but a good investor will offer you a fair deal where incentives are aligned.

Elevator Pitch 102

Elevator Pitch Incubator Technical Review Startup 102

discuss.joelonsoftware.com

NOVEMBER 1, 2010

where I can learn about how to build a sweat equity team? Right now, my business is just myself and a part-time employee who does support, testing, and product usability design. Rather, it is a proposal for sweat-equity investors. Make sure you treat people as partners, not as paid help. The gist: 1. Go to user groups.

Sweat Equity 40

Sweat Equity Equity Angel Investor Affiliate 40

Startup Company Lawyer

MAY 4, 2009

If a founder’s company raises more than $50,000 in debt or equity financing, excluding funds from the founder, within 18 months of formation, then the founder must pay a tuition fee of $4,500, which is used to cover the Institute’s expenses in providing the program. Exit Strategies. July 28th, 2009: Build a value generation plan.

Founder 28

Founder Warrant San Francisco Intellectual Property 28

David Teten

OCTOBER 1, 2015

intrapreneurs, e.g., the employee of GE who is tasked with launching a new business. Not surprisingly, the list above also is ranked from least to most equity stake in an investment for the investor, relative to the cash they invest. equity that belongs to departed cofounders)? mentor VCs, e.g., most VCs. What are the timelines?

Software Developers 60

Software Developers Software Development Software Review Technical Cofounder 60

www.mattbartus.com

DECEMBER 9, 2012

If you are a company that is fundraising, keep in mind that there are a few different levers you can pull to change the amount of dilution that the founders will experience. Let’s say you receive a term sheet for a $1 million investment at a $3 million fully diluted pre-money valuation, and you’re kind of disappointed.

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40

blog.nahurst.com

JULY 19, 2010

This covers one of the most common situations I encounter: For a pre-funding web startup whose team includes only a non-technical cofounder, how much equity should an incoming technical cofounder get? This is an area that varies widely and can significantly impact how much equity a technical cofounder receives (if they take more salary).

Technical Cofounder 43

Technical Cofounder Cofounder Equity Salary 43

Berkonomics

SEPTEMBER 28, 2017

For those negotiating equity allocations it covers some of the most complex issues to address in the process. Here’s an example: First, a brand-new enterprise is often formed from the efforts of several “partners”, each with an expertise valued by the others. Equity is divided between the founders and the business begun.

Early Stage 102

Early Stage Equity Stock Options Vesting 102

Small Business Force

AUGUST 11, 2009

In the early growth stages of your company, don't be overly concerned with the percentage of equity you retain. The name of the game is how much the equity is worth, not how much you have. With each dilution, should come more value. If possible, make all employees eligible to be "owners" through the option plan.

Vesting 32

Vesting Equity Valuation Dilution 32

blog.simeonov.com

FEBRUARY 22, 2010

Most partners, be they lawyers or VCs, tend to tweak the standard with their own language. This can be a convenient shortcut to separate someone’s status (founder) from their role (employee or contractor or advisor, etc.) It outlines key points of agreement between founders around IP ownership, equity ownership, vesting, etc.

Founder 44

Founder Vesting Agile Startup 44

The Next Web

OCTOBER 3, 2012

In order to justify adding another employee to your team, you have to feel confident not only that you have an appropriate core role for that employee to fill, but also that this employee is worth the added weight he or she will add to your company. Note: I’m not talking about equity.

Cofounder 155

Cofounder Technical Cofounder Technical Review Software Review 155

Seeing Both Sides

JANUARY 4, 2012

After three or four years of jamming on your start-up, you've finally crossed a few million in revenue, gotten north of 10-20 employees, and it's all starting to click. Your employees start doing what I call "phantom equity math" (if this company were worth a billion dollars, I'd become a multimillionare!),

Lean 53

Lean Dilution Revenue Hiring 53

Professor VC

JANUARY 17, 2008

A partner from the law firm (sponsor, covers the drinks and food) tosses out some softball questions to the panelists, the audience chimes in with Q&A and finally, culminates with the meet and greet where the panelists are flooded with business cards and pitches on the next great thing, which is often very similar to the last great thing.

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

Professor VC

JULY 25, 2013

I''m a strong believer in fairness (although my daughters may not agree) and investors and entrepreneurs working together as a team to create something valuable to all stakeholders (customers, employees, founders, investors). They did get the partners on board on the condition that the term sheet is renegotiated at a lower valuation.

Term Sheet 46

Term Sheet Silicon Valley Syndicate Syndication 46

Board Effect

MAY 10, 2019

Such metrics can include an investor’s liquidation preference, option exercise windows and expiry dates, and shareholders’ fully diluted ownership percentages. It’s important to note that the structure and contents of a cap table are unique to how a company has chosen to divide its equity. Why do cap tables matter?

Cap Table 40

Cap Table Liquidation Preference Dilution Liquidity Event 40

www.paulgraham.com

APRIL 28, 2010

The reason is that employees are investors too—oftheir time—and they want just as much to be able to cash out. Ifyour competitors offer employees stock options that might make themrich, while you make it clear you plan to stay private, yourcompetitors will get the best people. They just want to invest in this startup.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

ConversionXL

SEPTEMBER 17, 2021

To generate long-term brand equity and trust, and maintain competitive advantage, every brand campaign should be influenced by a strategy that’s built on four principles: 1. Your brand promise talks to your employees, investors, partners, and customers. Purpose is your reason for existing. It lets people know what to expect.

Campaign 109

Campaign Social Media Audience Channel 109