www.inc.com

SEPTEMBER 24, 2011

Should You Share Equity with Consultants? Back in 1997, Randy Parker was staring at a blank whiteboard, wondering where hed find the money to hire the employees and consultants he needed to build his new product. "We Parker found that equity as compensation helped build loyalty to his company -- even among consultants.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

Both Sides of the Table

AUGUST 3, 2010

I can save tons of development time and I think I can buy it for all equity. How much dilution should I take for it?&# My friend’s company was pre-revenue. Me: “Zero dilution. I’m not saying there are never reasons to buy another company for cash and/or equity. They often involve big hugs on stage.

Merger 276

Merger Technical Review Early Stage Dilution 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

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

SEPTEMBER 17, 2011

One great solution I see is to hire an outstanding CFO who runs both. Dilute your cash, equity or both. I think people understand this title to mean more somebody who handles operational issues rather than somebody who is more like a “chief of staff&# as a COO often is. But they aren’t the COO. What will it do?

Operations 292

Operations CTO Hire Startup Early Stage 292

View from Seed

APRIL 30, 2015

Glen Mello: Venture debt is a good complement to equity. It’s generally got a lower cost compared to equity capital and can help support growth. So it makes it a lot more challenging when you have debt on the books that isn’t as longer term as equity. What are some pros and cons?

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

Austin Startup

MAY 8, 2018

Background reading: Founder Compensation: Cash, Equity, Liquidity Fatal Errors in Early Startup Hiring Early Hires: Options or Stock Given how deeply involved we are with early-stage startups hiring their first key employees, I figured it would be helpful to outline a few key principles to help entrepreneurs navigate the topic.

Employee 48

Employee Seed Stage Startup Equity 48

Both Sides of the Table

OCTOBER 11, 2009

Many startup companies hire advisory boards. 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. It’s very tempting.

Advisory Board 306

Advisory Board Startup Equity Valuation 306

www.instigatorblog.com

OCTOBER 23, 2010

Changing Equity Structures for Early Startup Employees Tweet Recently someone asked me for advice on how much equity they should give to their early employees. I gave him similar numbers to what I had been given when I was hiring the first few employees for Standout Jobs. 1% is just not a lot.

Equity 41

Equity Employee Startup Vesting 41

Hunter Walker

AUGUST 7, 2017

Employee options pools, typically created at the point of financings, shouldn’t be treated as haggling over dilution, but rather a strategic resource that will help founders build the best team and, by extension, a more valuable company.

Equity 94

Equity Pre-Money Valuation Option Pool Founder 94

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

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.” Do the implications of hiring independent contractors differ state to state? link] mattbartus.

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

Up and Running

JULY 1, 2020

Lenders and equity investors are less emotionally involved in the plan as people within the company. I needed to determine whether we could profitably hire an additional advisor to properly manage this emerging marker to allow the current advisor more time to manage their own.

Business Plan 152

Business Plan Forecast Operations Dilution 152

This is going to be BIG.

FEBRUARY 27, 2011

Despite advances in cloud infrastructure, many businesses still have fleshy parts—soft underbellies where a human hand is required to keep quality control, stuff something into a box, order inventory, hire enough engineers to keep the site going or manage cash. Scale brings complexity. If you’re lucky, you realize it in time.

Dilution 104

Dilution Equity Hiring Partner 104

Both Sides of the Table

DECEMBER 1, 2009

I advocate treating them like a co-founder in every way except when they join and how much equity they get. You agonize over whether it is better to take a “A investor&# for 30% dilution or a “nice to have&# investor for 25% and on better terms. Resist the temptation to hire clones of you. Take your inventory.

Hiring 289

Hiring Cofounder Dilution Startup 289

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.

Technology 142

Technology Venture Capital Finance Startup 142

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

View from Seed

SEPTEMBER 23, 2019

To provide relevant perspective, listing past convertible note(s) and/or equity financing(s) including total round size and valuation (caps) is helpful. Plus, any other non-standard items here should be called out, too, like non-dilutive grants, as applicable. First, it’s helpful to enumerate the startup’s funding history to date.

Cap Table 211

Cap Table Seed Stage Valuation Dilution 211

ReadWriteStart

OCTOBER 28, 2010

More excerpts from "Do More Faster" Title chapter: " Do More Faster " by David Cohen How should we split the equity? Common areas to address are decisions around capitalization, executive hiring and firing, share issuance (dilution), and acquisitions. Or worse, one that claims equity that you don't believe is due.

Cofounder 128

Cofounder Founder Equity Dilution 128

Up and Running

JULY 14, 2015

Now, if you only needed $2 million of new funding, the investor would receive 50 percent equity. If the new funding increases to $3 million, however, they would have a 60 percent equity stake on the same valuation. You hire more staff than you need, become inefficient with operations, or move to bigger offices.

Technical Review 60

Technical Review Valuation Due Diligence Finder 60

Austin Startup

FEBRUARY 13, 2019

Either way, if you know you’re going to fail, it’s much better to do so with your own money on the line than money that also costs you in dilution, perpetuity or more. Consider convertible debt Before diving into a seed round, you may want to consider convertible debt over equity financing. I speak from experience.

Strategic Investors 49

Strategic Investors Austin Angel Investor Bootstrapping 49

keen.io

FEBRUARY 5, 2013

For example: Don’t accept equity compensation (stock shares) without knowing the percentage of the company you’ll own. From there, I began googling things like “first employee startup equity” and “startup offer negotiation.” These were the best resources I found: Equity for Early Employees in Early Stage Startups.

Salary 50

Salary Equity Startup San Francisco 50

Both Sides of the Table

SEPTEMBER 10, 2021

A-Rounds used to be $3–7 million with the best companies able to skip this smaller amount and raise $10 million on a $40 million pre-money valuation (20% dilution). In fact, we just announced that we hired a new head of our Growth Platform, (follow him on Twitter here ? So in a way it’s self selecting. Seksom Suriyapa ?—?he

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

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

Austin Startup

JUNE 30, 2017

TL;DR : Elite accelerators have cemented themselves as the universities of the entrepreneurial world; offering a bundle of resources in exchange for a price (tuition in form of equity). in exchange for a price: usually 6–9% of equity, with (sometimes) heavy anti-dilution rights, and pro-rata rights.

Curation 48

Curation Startup Cofounder Equity 48

K9 Ventures

JUNE 12, 2012

You get a situation whether investors are incentivized to put in more money into a company, not only to buy more equity, but also to fund the quick growth. Founders typically get their equity in a company once — at the time of founding and then get diluted with each subsequent round of financing.

Venture Capital 117

Venture Capital Silicon Valley Founder Seed Stage 117

Both Sides of the Table

JUNE 5, 2015

” Today I want to talk about how a VC thinks about equity pricing on your round and particularly if you’re coming off of a convertible note. Well, if you have an option pool of only 6% and have many more execs to hire to build out your team you’re going to ask for more options to be created in the future. No problem.

Pre-Money Valuation 150

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

Hunter Walker

DECEMBER 18, 2015

In no particular order: Startup Equity Is Unlikely to Make You Fabulously Wealthy After Four Years Unless One or More of the Following Apply… You were a founder. Even in successful companies, most initial equity grants will be worth a few hundred thousand dollars to perhaps $1-2m, when fully vested. Assume you get.25%

Equity 48

Equity Employee IPO Vesting 48

K9 Ventures

JUNE 12, 2012

You get a situation whether investors are incentivized to put in more money into a company, not only to buy more equity, but also to fund the quick growth. Founders typically get their equity in a company once — at the time of founding and then get diluted with each subsequent round of financing.

Venture Capital 105

Venture Capital Silicon Valley Founder Seed Stage 105

www.payne.org

SEPTEMBER 22, 2011

Startup Equity For Employees. 3 Dilution. 7 Salary vs Equity. The re-heating of the venture funded tech market has pushed a heat up of the hiring market, and Im getting more calls from friends asking for help understanding startup stock (equity) offers. diluted) terms. From Payne.org Wiki. 4 Vesting.

Equity 56

Equity Employee Vesting Preferred Stock 56

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. Hire your co-founder. Give them a large sum of equity. Involve them in fund raising, hiring, strategy, etc. Either you’re not technical and you think you need a technical co-founder or vice-versa.

Cofounder 393

Cofounder Founder Vesting Founder Vesting 393

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. If no, she is a no hire.

Equity 40

Equity Cap Table Valuation RSS 40

Berkonomics

DECEMBER 20, 2018

Since I am a proponent of using equity as a tool and he is so much opposed, this week it is his turn to make the case. Would I hire a broker? Do I understand the royalty replaces the need for equity investors ? What are the advantages of using royalties instead of raising investor funds, other than no dilution of equity?

IP 54

IP Intellectual Property Investment Bankers Product 54

Berkonomics

DECEMBER 20, 2018

Since I am a proponent of using equity as a tool and he is so much opposed, this week it is his turn to make the case. Would I hire a broker? Do I understand the royalty replaces the need for equity investors ? What are the advantages of using royalties instead of raising investor funds, other than no dilution of equity?

IP 48

IP Intellectual Property Investment Bankers Product 48

Both Sides of the Table

SEPTEMBER 5, 2012

This time by the efforts of Adeo Ressi to introduce a new kind of structure called “ convertible equity.” My initial reaction to Adeo when we spoke was that while it may have solved some issues (debt versus equity) it didn’t solve the ones that I’ve been warning entrepreneurs about most loudly.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

99u.com

DECEMBER 22, 2012

Every business needs a dream team, but you cant hire for every expertise youll need. Sure, you may need developers and designers, but how about experts on your industry or people with relationships with certain prospects that you cant afford to hire? Select advisors based on areas of expertise. State expectations up front. Achievement.

Turkey 40

Turkey Dilution Portfolio Exit Strategy 40

rapidrollout.wordpress.com

JANUARY 15, 2011

He or she might call himself a “consulting CTO,&# “freelance CTO,&# “on-demand CTO,&# “CTO on call,&# “CTO for hire,&# or just a “technology strategy advisor.&# And finally, you may be able to avoid diluting your equity. And why would you hire a technology guy who launched a failed startup?

Fractional CTO 40

Fractional CTO CTO CTO Hire Fractional VPE 40