David Teten

JANUARY 21, 2021

V: Should you raise venture capital from a traditional equity VC or a Revenue-Based Investing VC? VI: Revenue-based financing: The next step for private equity and early-stage investment. VIII: The Leading Flexible VCs, With Structures Between Equity and Revenue-Based Investing.

Equity 78

Equity Revenue Cofounder Colorado 78

Startup Professionals Musings

AUGUST 4, 2014

You need to find the skills or experience you don’t have in business, technology or money. The first question I usually get is what percent of the company or equity is that person worth? Just because it was your idea doesn’t mean you “deserve” 90 percent of the equity. Experience and connections in your business area.

Cofounder 261

Cofounder Stock Founder Technical Cofounder 261

Startup Professionals Musings

APRIL 23, 2012

One of the first tough decisions that startup founders have to make is how to allocate or split the equity among co-founders. Another common “failure to start” situation I see is one where the “idea person” insists that the idea is 90% of the value (and 90% of the equity). Domain expertise and connections.

Intellectual Property 252

Intellectual Property Equity Cofounder CTO Hire 252

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. Bookkeeper.

Equity 62

Equity Employee Founder CTO Hire 62

Gust

APRIL 11, 2014

Let’s get right down to business: Dilution of founders’ and other early shareholders’ equity in startups is frequently a subject of intense interest and debate. That’s the concept of what some call mathematical dilution. That is not economic dilution, but rather its opposite ( accretion ).

Dilution 162

Dilution Equity Pre-Money Valuation Prospectus 162

Startup Professionals Musings

SEPTEMBER 25, 2019

It never hurts to ask in a job interview what stock options are available, and don’t fall for the offer which promises to “work out the equity terms later.” Any offers of equity compensation before the first round of institutional capital should be considered purely speculative. Advisory Board Member, 1% Senior Engineer,3 -.7%

Equity 237

Equity Stock Options Advisory Board Stock 237

YoungUpstarts

SEPTEMBER 23, 2017

Deciding whether to increase money or trade equity in the business for much needed assistance, could be a tough call. I raised money and traded equity, but with my venture, I had to make one of the toughest decisions, to build it with some assistance of co-founders. Both the choices tend to take away a few options. Plan, Plan and Plan.

Cofounder 124

Cofounder Sweat Equity Equity Dilution 124

View from Seed

DECEMBER 4, 2014

Editor’s note: Understanding how to divide founder equity at a startup can be tricky, even to the point of reaching emotional riffs between founders. Below, Lee Hower offers advice for approaching these equity discussions objectively and properly. Sometimes co-founders put off the equity split question for some time.

Equity 315

Equity Founder Sweat Equity Cofounder 315

David Teten

DECEMBER 2, 2019

And of course, effectively all venture capitalists are going to require some equity for their investment. I’m now researching non-dilutive funding for Action Tank , a startup I’m gestating to “Make America Functional Again”. I emphasize my focus here is organizations which are backing for-profit companies and do not take equity.

Technical Review 60

Technical Review SBIR Dilution Silicon Valley 60

ReadWriteStart

JUNE 1, 2020

Forms of funding. ? Equity investment. Equity investment is the most popular and most talked-about avenue for startup funding. These investments are made instead of shares or equity in your startup. Equity investors. The third source of funding is from equity investors. Stages of Equity-based funding. ?

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

Both Sides of the Table

AUGUST 14, 2017

The image of boards and of investors vs. founder conflicts has been so at odds with my experiences on dozens of boards over the past 20 years that I thought it was worth sharing what I actually see.

Cofounder 217

Cofounder Stock Options Equity Technical Review 217

Agile VC

DECEMBER 4, 2014

As a result, one of the trickier things co-founders tackle is determining the equity split amongst the founding group of individuals. Across both the startups I’ve personally been involved in (PayPal and LinkedIn) and the startups in which I’ve been an investor, I’ve seen a broad range of co-founder equity splits.

Cofounder 255

Cofounder Equity Founder Sweat Equity 255

VC Adventure

AUGUST 16, 2020

Yet others try to use cash to minimize dilution for early employees and try to rapidly reduce their reliance on options. Both of those things are not good for your business, so while it’s ok to offer some level of cash/equity trade-off, it shouldn’t be over-done. But better to have a view on this that is deliberate.

Programming 149

Programming Vesting Equity Software Review 149

This is going to be BIG.

JANUARY 18, 2024

On the other hand, they could be the opposite—much more focused on near-term cash distributions than long-term equity appreciation. If your early customers aren’t blown away by the experience, you’re never going to become a huge company.

.Net 88

.Net Cap Table Startup Technical Review 88

Startup Professionals Musings

JULY 1, 2022

It never hurts to ask in a job interview what stock options are available, and don’t fall for the offer which promises to “work out the equity terms later.” Any offers of equity compensation before the first round of institutional capital should be considered purely speculative. Advisory Board Member, 1% Senior Engineer,3 -.7%

Stock Options 343

Stock Options Advisory Board Stock Startup 343

Both Sides of the Table

MAY 28, 2018

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. They don’t want you experimenting for many years on their capital?—?they’d Every VC knows that the amount you raise is often a proxy for your valuation.

Burn Rate 247

Burn Rate Valuation Pre-Money Valuation Dilution 247

David Teten

JANUARY 19, 2021

From traditional equity VC, Flexible VC borrows the option to pursue and reap the rewards of an outsized exit. Flexible VC 101: Equity Meets Revenue Share. Equity Ownership. Yes, typically preferred equity. On average, founders own just 43% of equity by Series B , declining thereafter. Flexible VC 102: Variations.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Startup Professionals Musings

MAY 8, 2022

While it’s unlikely that all three of these will ever be true at the same time, most experts don’t recommend jumping at the first opportunity, but first gaining some skill, financial, and business experience first. The downside is loss of control and financial dilution. The founding team size dilemma.

Founder 325

Founder Hockey Stick Cofounder Liquidity Event 325

www.inc.com

SEPTEMBER 24, 2011

Should You Share Equity with Consultants? To grow his cash-strapped start-up, Parker ended up sharing equity -- not only with employees, but also with consultants and vendors. Parker found that equity as compensation helped build loyalty to his company -- even among consultants. But sharing equity can have pitfalls, too.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

Startup Professionals Musings

FEBRUARY 27, 2023

Every startup needs to start their funding search looking for grants, with no equity dilution, as well as contests and foundations. If looking for help, you can find interns willing to work for the experience, and real insights into new customer segments. Get help with grant funding and incubator resources.

Arizona 276

Arizona Intellectual Property Accredited Investor Entrepreneur 276

David Teten

AUGUST 19, 2019

This structure offers some of the benefits of traditional equity VC, without some of the negatives of equity VC. I’ve been a traditional equity VC for 8 years, and I’m now researching new business models in venture capital. Benefits: Non-dilutive, flexible credit offerings that fit SMB or enterprise SaaS.

Revenue 60

Revenue Technical Review Software Review Equity 60

Agile VC

DECEMBER 4, 2014

As a result, one of the trickier things co-founders tackle is determining the equity split amongst the founding group of individuals. Across both the startups I’ve personally been involved in (PayPal and LinkedIn) and the startups in which I’ve been an investor, I’ve seen a broad range of co-founder equity splits.

Cofounder 173

Cofounder Equity Founder Sweat Equity 173

YoungUpstarts

OCTOBER 10, 2014

Loan financing and equity investment are two common methods of funding a new business start-up, assuming you do not have the capital on your own. However, if you would rather share the risk, mitigate debt obligations and bring in top-level experts, invite equity investors. With equity investment, you do not have to repay the money.

Equity 176

Equity Limited Liability Company Vietnam Finance 176

discuss.joelonsoftware.com

NOVEMBER 1, 2010

where I can learn about how to build a sweat equity team? Rather, it is a proposal for sweat-equity investors. Mark Walsen Mark Walsen Thursday, October 09, 2008 Deleting … Approving … I think you would be better off hiring people, rather than trying to convince them to work for free in exchange for equity.

Sweat Equity 40

Sweat Equity Equity Angel Investor Affiliate 40

Startup Professionals Musings

NOVEMBER 6, 2020

It seems that most of you entrepreneurs I meet in my role as business advisor are convinced that starting a new business requires equity investors, exponential growth, and a plan to go public via IPO. Personal income is related to operations versus equity. With major investors, your equity and return is diluted and delayed.

Small Business 311

Small Business Small Business Administration SBA Equity 311

Both Sides of the Table

OCTOBER 11, 2009

In my experience most advisory boards under deliver relative to expectations. They are usually offered around 0.25% of the companies equity in exchange for their role and I’ve seen many companies hand out a total of 2% to advisers. My main advice to you if you’re considering it is don’t waste much equity on it.

Advisory Board 306

Advisory Board Startup Equity Valuation 306

Startup Professionals Musings

APRIL 12, 2021

In my experience as a business advisor and occasional investor, many of you won’t make it that far, succumbing to the high costs of getting those first customers, funding an initial inventory, and building an operational support process. Negotiate a line-of-credit with a financial institution.

Dilution 404

Dilution Incubator Bootstrapping Government 404

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

Startup Professionals Musings

JULY 24, 2011

It never hurts to ask in a job interview what stock options are available, and don’t accept an offer which promises to “work out the equity terms later.” Any offers of equity compensation before the first round of institutional capital should be considered purely speculative. Advisory Board Member, 1% Senior Engineer,3 -.7%

Equity 234

Equity Advisory Board Stock Options Stock 234

www.mattbartus.com

SEPTEMBER 24, 2011

Equity for Consultants – Keep it Simple! posted Feb 3 in Equity , People issues. We will grant him/her X% fully diluted shares up front, and every time he/she makes an introduction, he/she will vest in 100 shares.” Should interns be paid in the voluntary sector, or is experience its own reward? Categories.

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

Austin Startup

FEBRUARY 4, 2019

A finalist in the Social and Culture category , which will pitch at 11 am Saturday, March 9, EnrichHER Funding , based in Atlanta, is fueling the growth of women-led businesses by enabling women founders to secure capital in an affordable and non-dilutive way. Investors of EnrichHER get no equity. This experience was priceless.

Startup 50

Startup Cofounder Technical Review Equity 50

Andrew Payne

SEPTEMBER 9, 2017

I’ve probably had a thousand or more discussions about startup equity: figuring out how much to offer, negotiating, or advising others. In practice, most equity grants within a company are driven by broad calibrations with existing employees. For example, if four co-founders agree to equal equity, they each own 25% at the very outset.

Equity 71

Equity Founder Vesting Dilution 71

Startup Professionals Musings

MAY 30, 2020

Every startup needs to start their funding search looking for grants, with no equity dilution, as well as contests and foundations. If looking for help, you can find interns willing to work for the experience, and real insights into new customer segments. Get help with grant funding and incubator resources.

Arizona 310

Arizona Intellectual Property Accredited Investor Dividend 310

Business Plan Blog

OCTOBER 4, 2013

Never confuse the number of years worked with experience. Credibility is based on accomplishments and relevant experience. Try to build a team with startup experience as these individuals will be far more likely to understand the importance of flexibility, perseverance, collective success and team playing.

Part-Time VPE 79

Part-Time VPE Fractional VPE Cofounder CTO Hire 79

www.quora.com

SEPTEMBER 22, 2011

Type to Add and Search Questions; Search Topics and People Startups Startup Compensation Entrepreneurship Compensation Stock Options Major Internet Companies Silicon Valley Why is there such a large founder to early employee equity drop-off? This ties into this Paul Graham article: [link] /equity. This answer. This answer.

Equity 40

Equity Employee Founder Cofounder 40

Startup Professionals Musings

AUGUST 10, 2019

While it’s unlikely that all three of these will ever be true at the same time, most experts don’t recommend jumping at the first opportunity, but first gaining some skill, financial, and business experience first. The downside is loss of control and financial dilution. The founding team size dilemma.

Hockey Stick 243

Hockey Stick Cofounder Liquidity Event Startup 243

The Startup Magazine

JULY 1, 2022

The most common types of financing are debt financing, equity financing, and venture capital. Equity financing is when you sell a part of your company for cash. Equity financing can give you a lot of cash upfront, but it can also dilute your ownership stake in your company. Financing Your Startup. Final Thoughts.

Technology 139

Technology Venture Capital Finance Startup 139