ReadWriteStart

JUNE 1, 2020

You must have a prototype or a minimum viable product (MVP). To fund the sudden spike in production, funds will be required for additional inventory and wages. It is going to cost a lot of money just to get the initial batch of products to test the market and would definitely require external funding. Sources of Funding.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

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

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. For the wrong reasons.

Cofounder 388

Cofounder Early Stage Startup Silicon Valley 388

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

Both Sides of the Table

AUGUST 14, 2017

Boards are not appointed to be founder-friendly lapdogs for the 1–3 founders who start companies and usually own the largest equity positions in the company. To be clear — most founders I’ve ever worked with have been super ethical, very conscientious, not overly greedy and take their personal responsibilities very seriously.

Cofounder 217

Cofounder Stock Options Equity Technical Review 217

Feld Thoughts

SEPTEMBER 2, 2011

Equity is split 55% and 45%, but where is that officially recorded? The benefit of hiring Praveena is they think they could keep more equity and control of the company. But, Praveena hails from the land of big paychecks and is not ready to leave that without considerable equity. Time to update the cap table.

Cap Table 133

Cap Table CTO Hire Technical Cofounder Cofounder 133

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. If you are living your passion, you want to interact with customers, and “touch and feel” the product every day. Insist on being engaged at the transaction level.

Entrepreneur 371

Entrepreneur Equity Dilution LLC 371

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

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

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. We have a special program if you are pre-seed and need product development. Alternative Capital. “

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. Plus, we agree that we should have this type of meeting and try to make it productive for all parties.

.Net 89

.Net Cap Table Startup Technical Review 89

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

Berkonomics

DECEMBER 31, 2020

The company was funded entirely by grants from the National Institute of Health, amounting to millions of non-dilutive dollars in all. No dilution to shareholders or the founders. The post Financing with grants, not equity or debt first appeared on BERKONOMICS. How refreshing! How grants are considered. Other sources of grants.

Equity 62

Equity Finance Dilution Founder 62

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

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? These are value-creation milestones.

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. No one wants to put in money until you have a product, and you need money to build the product.

Founder 325

Founder Hockey Stick Cofounder Liquidity Event 325

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

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. One who wants to commercialize his product and start charging while the other prefers to not charge.

Founder 340

Founder Sacramento Cofounder Technical Review 340

Startup Professionals Musings

OCTOBER 17, 2022

Like big corporations with a heavy investment in existing product lines, it’s hard to stop linear investing to look for innovative new opportunities. This can cause early investor dilution, lower ultimate returns or leave the startup stranded. The investment model is changing from hard selection to “spray and pray.”

Angel Investor 342

Angel Investor Venture Capital Silicon Valley Portfolio 342

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

Startup Professionals Musings

APRIL 12, 2021

Of course, it helps to pick a business model that minimizes these costs, such as e-commerce to minimize initial staff and facilities, or professional services, where you are the initial product. Don’t underestimate the advantages of providing your products and services in exchange for access to facilities and equipment you need to grow.

Dilution 404

Dilution Incubator Bootstrapping Government 404

Both Sides of the Table

SEPTEMBER 17, 2011

Still, I’ll bet that functionally you divide areas of competence like sales & marketing, product, engineering, biz dev, etc. Dilute your cash, equity or both. . “We’re all equal co-founders and we don’t care about titles.&# Functional roles provide more clarity around roles and responsibilities.

Operations 292

Operations CTO Hire Startup Early Stage 292

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. When I’m in, I’m in.

Finance 286

Finance Term Sheet Technical Review Warrant 286

Up and Running

JULY 1, 2020

Businesses start when their founders see a need for a product or service that they can provide. 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. This typically occurred with new products.

Business Plan 152

Business Plan Forecast Operations Dilution 152

Both Sides of the Table

AUGUST 30, 2010

Convertible debt is an investment that “converts&# into equity in the future usually at a discount to your next funding round price and sometimes has a “cap&# (maximum price). prefer equity to convertible debt): If you’re an early stage investor (e.g. 20-25% dilution). In my mind the deal is priced.

Equity 319

Equity Early Stage Angel Investor Valuation 319

Both Sides of the Table

OCTOBER 11, 2009

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. Time to start thinking about how to make it more productive. Have 8 of them!

Advisory Board 306

Advisory Board Startup Equity Valuation 306

Startup Professionals Musings

FEBRUARY 13, 2013

A grant is not an equity investment, so the entrepreneur doesn’t have to give up a stake in the company either. Typically they can be used to fund product development and commercialization that would otherwise require outside investors. To the investors, it means less dilution and lower overall risk. Extend your networking.

Government 230

Government Equity Cost SBIR 230

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

Both Sides of the Table

SEPTEMBER 28, 2014

We’re going to start aggressively spend money on marketing our product. Gross margin (GM) is the amount of profit you make per sale of your product or service taking into account your total costs of selling that product or service. So money spent should add equity value or create IP that eventually will.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

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

Both Sides of the Table

OCTOBER 1, 2009

We spent our future since the equity was artificial. If you’re raising $2 million and can close on $3 million – don’t optimize to minimize short-term dilution, optimize for contingencies in case the market gets worse. Consumer spending is where I’m dubious. So why the ’09 bounce? See point 2 below. million – take it.

Technical Review 269

Technical Review Stock Hawaii Early Stage 269

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

The Startup Magazine

JULY 1, 2022

The three main components of a company are production or service, marketing and sales, and finance. Production or service is the business’s core activity, which generates revenue. If you are selling a physical product, you will need to decide whether to market online or through brick-and-mortar stores.

Technology 148

Technology Venture Capital Finance Startup 148

Startup Professionals Musings

JANUARY 19, 2020

Like big corporations with a heavy investment in existing product lines, it’s hard to stop linear investing to look for innovative new opportunities. This can cause early investor dilution, lower ultimate returns or leave the startup stranded. The investment model is changing from hard selection to “spray and pray.”

Angel Investor 314

Angel Investor Venture Capital Silicon Valley Startup 314

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.

Startup 50

Startup Cofounder Technical Review Equity 50

Startup Professionals Musings

AUGUST 10, 2019

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. No one wants to put in money until you have a product, and you need money to build the product.

Hockey Stick 243

Hockey Stick Cofounder Liquidity Event Startup 243