The Startup Magazine

MARCH 14, 2022

Profitably managing and owning businesses with all the inherent risks have always defined the Indian entrepreneurial spirit. 5) Managing the operations. The equity dilution at this nascent stage is on desirable terms; such investing can lead to profitable returns. And this has been the way of life here in India.

Technical Review 150

Technical Review Due Diligence India Startup 150

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

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

www.avc.com

SEPTEMBER 22, 2011

Employee Equity: How Much? The most common comment in this long and complicated MBA Mondays series on Employee Equity is the question of how much equity should you grant when you make a hire. And the amount of equity you need to grant to accomplish these hires is also an art and most certainly not a science.

Equity 64

Equity Employee CTO Hire Fractional CTO 64

Startup Professionals Musings

SEPTEMBER 27, 2023

This is called stock dilution control. While new equity owners always have to get it from someone, actual re-allocation of existing shares should be based on a formula to maximize the value of your remaining founder shares. Limit board seats and manage member selection criteria. Marty Zwilling

Stock 240

Stock .Net Vesting Founder Vesting 240

David Teten

JANUARY 19, 2021

From traditional equity VC, Flexible VC borrows the option to pursue and reap the rewards of an outsized exit. As two fund managers employing Flexible VC, we think it is a healthy addition to the ecosystem and will yield more predictable and stable healthy returns for investors. Flexible VC 101: Equity Meets Revenue Share.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Startup Professionals Musings

SEPTEMBER 25, 2019

7% Product Manager,2 -.3% 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.

Equity 237

Equity Stock Options Advisory Board Stock 237

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

Both Sides of the Table

FEBRUARY 6, 2013

it’s the most expensive dilution you’ll ever face. But not anal if one founder who shares equity graciously with early employees who are treated as “co-founders” My idea startup team is heaving on tech personnel but also has strong product management. Have them manage their area.

Cofounder 388

Cofounder Early Stage Startup Silicon Valley 388

Startup Professionals Musings

NOVEMBER 8, 2021

This usually means not taking money from equity investors, since investors want fast growth, high profits, and an exit event, to allow investments to be recouped. Growth entrepreneurs find that this fun world quickly changes to managing personnel problems, tuning organizational structures, and dealing with testy investors.

Entrepreneur 371

Entrepreneur Equity Dilution LLC 371

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

Startup Professionals Musings

JANUARY 15, 2021

This is called stock dilution control. While new equity owners always have to get it from someone, actual re-allocation of existing shares should be based on a formula to maximize the value of your remaining founder shares. Limit board seats and manage member selection criteria. Marty Zwilling.

Vesting 298

Vesting Dilution Stock Founder Vesting 298

VC Adventure

AUGUST 16, 2020

The data change over time and, frankly, I’m less interested in debating what % grant your Director of Product Management should receive given your stage of company and capital raised, and more interested in the structure of your program. I’m also not going to give option bands for various positions.

Programming 149

Programming Vesting Equity Software Review 149

Startup Professionals Musings

JULY 1, 2022

7% Product Manager,2 -.3% 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.

Stock Options 343

Stock Options Advisory Board Stock Startup 343

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. It meant that the management teams hadn’t figured out a product / market fit for their own businesses. You’re in control.

Merger 276

Merger Technical Review Early Stage Dilution 276

www.inc.com

SEPTEMBER 24, 2011

Leadership & Managing | Tuesdays. LEADERSHIP & MANAGING. Managing Creativity. 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. But sharing equity can have pitfalls, too. Leadership.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

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

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. They may have just exited a business or maybe they’ve just been managing their own money, which isn’t a full-time job for most people.

.Net 88

.Net Cap Table Startup Technical Review 88

Both Sides of the Table

JANUARY 4, 2014

I think as a tech industry we have bred a culture that places more emphasis on product excellence than managing human behavior. Of course it makes no sense to have great people management and a crappy product. Equity for the future? What should the financial settlement be for the founder leaves be? We sat down the three of us.

Founder 340

Founder Sacramento Cofounder Technical Review 340

View from Seed

APRIL 30, 2015

Below, we talk to Glen Mello , Managing Director of Silicon Valley Bank’s accelerator team in Boston. 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. What are some pros and cons?

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

Startup Professionals Musings

MAY 8, 2022

The downside is loss of control and financial dilution. 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. Later you need specialists and managers. The co-founder relationship dilemma.

Founder 325

Founder Hockey Stick Cofounder Liquidity Event 325

Both Sides of the Table

SEPTEMBER 25, 2010

When I first read Paul Graham’s blog post on “High Resolution&# Financing I read it as a treatise arguing that convertible notes are better than equity. He’s fine with equity provided it’s cheap to paper it legally. Photo credit: D. Blanchard/O’Reilly Media.

Finance 286

Finance Term Sheet Technical Review Warrant 286

Austin Startup

JULY 6, 2018

The below outlines how I would approach the decision: Cash and Equity. Very simply, what are you giving and what are you getting in return in terms of cash and equity for joining the program? Anti-Dilution. See: Startup Accelerator Anti-Dilution Provisions; The Fine Print.

Dilution 48

Dilution Startup Technical Review Equity 48

ithacaVC

OCTOBER 10, 2017

Here is the big problem with investors – they dilute the founders’ ownership in the company. Let’s cover some basics: It is impossible to issue stock to investors without existing shareholders (founders, employees and prior investors) being diluted. Is this actually a big problem? Are the founders happy?

Dilution 53

Dilution Stock Options Stock Valuation 53

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

The Next Web

OCTOBER 10, 2013

Impossible to manage.”. Too dilutive.”. Dilution – bringing on a co-founder likely means you’re splitting your share in half. Your company needs to be worth three times more for your equity to be worth the same. You know what is definitely the wrong number of cofounders? Too many.”. Five is definitely the wrong answer.

Cofounder 143

Cofounder Technical Cofounder Kenya Dilution 143

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

Up and Running

JULY 1, 2020

Business owners and managers make optimistic assumptions about a project’s success when they are emotionally committed to an idea. Lenders and equity investors are less emotionally involved in the plan as people within the company. Will marketing for the expansion dilute marketing of your brand or other products?

Business Plan 152

Business Plan Forecast Operations Dilution 152

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. 1% but they’re not going to be overwhelmed by it, or insanely incentivized by that equity alone. I do believe that early employees should trade salary for equity.

Equity 41

Equity Employee Startup Vesting 41

Startup Professionals Musings

JULY 24, 2011

7% Product Manager,2 -.3% 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.

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.” Is it atypical for founders to vest more than 25% of their equity after one year? Categories.

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

Business Plan Blog

OCTOBER 4, 2013

The single most important factor to raising capital for any tech startup is the management team. Be sure to leave plenty of equity for investors. Having too many co-founders will only lead to your eventual dilution. Aligning the Startup Team Strategy with the Capitalization Strategy. Don’t make everyone a founder.

Part-Time VPE 79

Part-Time VPE Fractional VPE Cofounder CTO Hire 79

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

Agile VC

OCTOBER 23, 2012

And even if they wanted the index return, there is essentially no way to buy (or sell) a broad-based basket of VC funds in the way you can trade the S&P 500 or Russell 2000 or other public equity index. What about fund of funds (FoF), you ask? Aren’t they a form of bundled investment into the VC asset class?

LP 176

LP Accredited Investor Carried Interest Portfolio 176

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. But employee option pool is important enough that I wanted to briefly expand upon my comment above.

Equity 94

Equity Pre-Money Valuation Option Pool Founder 94

Agile VC

JULY 11, 2012

in equity & loans which was ultimately worth >170x ($355M) when DEC went public about a decade later. Should there be a notion of “founder equity” for those individuals who put in the hard work to start a firm and build the brand? Big success was Digital Equipment Corporation (DEC), in which ARD invested about $2.1M

Silicon Valley 240

Silicon Valley Carried Interest Cofounder Boston 240

ithacaVC

SEPTEMBER 10, 2012

But here is one that I want to focus on in this post: “Can I ask for undiluted stock (non dilution clause)?” I am not even sure what “undiluted stock” is, but safe to say the person (I will call him Exec X) meant stock that his equity would not be dilutable in terms of ownership.

Dilution 53

Dilution Employee Cap Table Stock 53