Hunter Walker

AUGUST 7, 2017

But employee option pool is important enough that I wanted to briefly expand upon my comment above. While you should expect these sorts of hires to take below market cash comp versus what Google is paying them, this tradeoff needs to be replaced with equity upside.

Equity 94

Equity Pre-Money Valuation Option Pool Founder 94

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

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. How much is in the option pool? If you have 8 senior managers in place and I don’t think you’ll need as many people I might accept an option pool of 8% unallocated.

Pre-Money Valuation 150

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

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

The Next Web

OCTOBER 21, 2013

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. Alarm bells.

Cap Table 128

Cap Table Option Pool Angel Investor Entrepreneur 128

Hippoland

APRIL 10, 2016

We are trying to decide how much equity to allocate to each person. I would like to split the equity equally, since it seems only fair. But, Ada wants to split the equity 50% her, 20% Bob and 20% me with a 10% option pool. Non-active advisors are typically granted < 1%.

Cofounder 48

Cofounder Cap Table Equity Vesting 48

www.payne.org

SEPTEMBER 22, 2011

Startup Equity For Employees. 3 Dilution. 5 Stock vs Options. 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. 4 Vesting.

Equity 56

Equity Employee Vesting Preferred Stock 56

ithacaVC

DECEMBER 13, 2013

They are typically pretty simple: (i) shares owned by founders and (ii) shares authorized for issuance in a stock option pool, some of which may be issued to employees already and some of which will be available for future issuance. If no additional equity is ever granted to Founder X and Founder Y, then Founder Y will ALWAYS own 1.63

Cap Table 67

Cap Table Pre-Money Valuation Option Pool Liquidation Preference 67

Business Plan Blog

SEPTEMBER 18, 2012

Reserve 10-20% Of Your Company’s Outstanding Equity For A Stock Option Plan. Equity incentives are a major form of compensation for most emerging growth and technology companies. It is critical for a start-up to consider this reality and reserve 10-20% of its outstanding equity for a stock option plan.

Stock Options 61

Stock Options Stock Option Pool Dilution 61

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. Venture Hacks Good advice for startups.

Equity 40

Equity Cap Table Valuation RSS 40

The Next Web

OCTOBER 7, 2013

Quite frankly, waiting provides more assurance around employment risk without the commensurate sacrifice in equity comp. Startup employees are granted common shares out of something called an option pool. Every time a startup raises capital, all common shareholders are diluted. Facebook’s engineer #100 isn’t doing poorly.

Engineer 129

Engineer Dilution Option Pool Vesting 129

The Next Web

JUNE 15, 2012

From Silicon Valley to Peoria, Illinois, cash-strapped startups look for inventive way to finance their business – often handing out equity to employees, consultants, vendors, and other service providers. Pitfalls in sharing equity. While equity can be a great tool for compensating early on, the drawbacks are significant.

Equity 116

Equity Stock Options Vesting Stock 116

Genuine VC

FEBRUARY 28, 2011

This post doesn’t going into general tactical approaches of job offer negotiation, but rather focuses on the fact that with startups a significant part of compensation is related to equity or options. So optimizing a startup offer involves not just one key figure – salary – but also the option package.

Startup 121

Startup Equity Vesting Salary 121

Rob Go

AUGUST 29, 2016

Founders also had to do a little math on the new option pool to really understand what their ownership would be post investment, since it was typically taken out of the company pre-money. In the old world, this additional dilution would end up being shared, since the pre-money was fixed.

Post-Money Valuation 52

Post-Money Valuation Valuation Cap Table Term Sheet 52

The Startup Lawyer

FEBRUARY 4, 2011

If an incubator offers your startup $25,000 in exchange for 6% equity, the pre-money valuation is a whopping $391,667. Rather than assign a monetary value to the intangibles, a startup should instead assign an equity percentage value to intangibles like mentorship. Other incubators may want to set up an option pool.

Incubator 105

Incubator Pre-Money Valuation Option Pool Advisory Board 105

Tim Keane

JANUARY 12, 2010

The investors and the entrepreneurs are – or should be – aware that the price of the company’s equity is set by the market – in simplest terms, what an informed buyer is willing to pay.   Note that this applies only to earl stage Series A-type equity financings and assumes no cash dividends are paid to investors.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

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

venturehacks.com

OCTOBER 21, 2010

SUPPORTED BY Products Archives @venturehacks Books AngelList About RSS The Option Pool Shuffle by Nivi on April 10th, 2007 “Follow the money card!&# – The Inside Man, Three-Card Shuffle Summary: Don’t let your investors determine the size of the option pool for you. Don’t lose this game. share to $1.00/share:

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68

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

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

Up and Running

SEPTEMBER 20, 2021

The use of a cap table for a company comes into play when it has to track the total amount of shares, the value of shares, and the equity ownership of all the shareholders. The data of the company, such as debt and the company’s equity ownership, is laid out with the help of a cap table. Convertible notes. Example of a cap table.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

Professor VC

JANUARY 17, 2008

There needs to be enough equity to go around for founders, early investors, later investors, and employees. At a $1 million, pre-money, with an investment of $500K, that would leave 67% of the company for the founders and initial option pool. Im sure I lost all of you, but I feel better now having completed the analysis.

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

www.startupnorth.ca

OCTOBER 23, 2010

The Adventure of a Lifetime 17 Pithy Insights for Startup Founders 17 Pithy Insights for Startup Employees Venture Hacks > Hiring Venture Hacks > Employees Venture Hacks > The Option Pool Shuffle Paul Graham > The Equity Equation [link] boris It's important to note that those options grants are AFTER a Series A funding.

Employee 41

Employee Founder Salary Equity 41

Berkonomics

SEPTEMBER 28, 2017

For those negotiating equity allocations it covers some of the most complex issues to address in the process. Equity is divided between the founders and the business begun. An option plan should carve out an addition of about 15% of the “fully diluted” shares. This post is longer than usual.

Early Stage 102

Early Stage Equity Stock Options Vesting 102

www.paulgraham.com

APRIL 28, 2010

Whatkind of anti-dilution protection do they want? It costs you a little more equity, but being able to play the two firms off each other (as well as ask one if the other is being out of line) is invaluable. So after this the option pool is down to 13.7%). [ They just want to invest in this startup. Hell if they know.In

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Berkonomics

MAY 12, 2010

Equity is divided between the founders and the business begun. An option plan should carve out an addition of about 15% of the “fully diluted” shares. Inducing a new CEO to come aboard usually means creation of a stock option package of 5-8%. That size of grant would take much or most of the option pool.

Early Stage 85

Early Stage Equity Stock Options Vesting 85

venturehacks.com

MARCH 21, 2008

If your company hasn’t raised a Series A, increase the advisor’s equity by roughly 30%-50% to account for dilution from seed investors, Series A investors, option pools, swimming pools, and the like. Finally, there is a beauty to paying in equity rather than an equivalent amount of cash.

Advisory Board 44

Advisory Board Cap Table Vesting Equity 44

www.paulgraham.com

OCTOBER 23, 2010

Founders never really likedgiving up as much equity as VCs wanted. 5 ] But the advantage of these medium-sized rounds is not just thatthey cause less dilution. They dont take boardseats, so they dont need a big percentage of your company. It was a lot of the companyto give up in one shot. You also lose less control.

Valuation 92

Valuation Stock Partner Founder 92