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

JANUARY 19, 2020

Examples of some leaders in this space include Ron Conway in Silicon Valley and Jeff Bezos , CEO of Amazon, who each may have over 500 startups in their portfolio. This can cause early investor dilution, lower ultimate returns or leave the startup stranded.

Angel Investor 314

Angel Investor Venture Capital Silicon Valley Startup 314

www.mattbartus.com

SEPTEMBER 24, 2011

Perspectives on issues affecting founders, startups and investors from a veteran startup lawyer in Silicon Valley. Equity for Consultants – Keep it Simple! posted Feb 3 in Equity , People issues. for every hour works, consultant accrues [hourly wage]in debt that will convert to equity in the next round).

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

Both Sides of the Table

SEPTEMBER 10, 2021

The legends of Silicon Valley?—?two 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). Today you have funders focused exclusively on “Day 0” startups or ones that aren’t even created yet. two founders in a garage?—?(HP

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

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.

Equity 40

Equity Employee Founder Cofounder 40

Startup Professionals Musings

DECEMBER 27, 2014

Examples of some leaders in this space include Ron Conway in Silicon Valley and Brian Cohen , chairman of the New York Angels, who each may have over 500 startups in their portfolio. This can cause early investor dilution, lower ultimate returns or leave the startup stranded.

Angel Investor 260

Angel Investor Silicon Valley Startup Portfolio 260

Pascal's View

OCTOBER 11, 2013

But I am coming to the Museum to talk about the leading of edge of startup financing in the digital age and about real time investment risk management in the new Wild West– crowd-funded Silicon Valley post the lifting of the ban on General Solicitation.

New York 31

New York Technical Review Angel Investor Finance 31

ReadWriteStart

SEPTEMBER 10, 2010

Whether it is credit or equity, funding is very, very tight. You can get cash without diluting your ownership in the company. Because customer financing equals revenue, not equity. Sramana Mitra is a technology entrepreneur and strategy consultant in Silicon Valley. This is important, so please listen up.

Cloud 115

Cloud Silicon Valley Incubator Finance 115

ReadWriteStart

JANUARY 27, 2011

And, oh by the way, we also really like the idea of the 1M/1M entrepreneurs building valuation and negotiating leverage through these business development efforts, instead of signing off large chunks of their company in form of equity early on.

Dilution 114

Dilution Revenue Finance Entrepreneur 114

K9 Ventures

JUNE 12, 2012

Some days in Silicon Valley it feels like there are more investors than there are entrepreneurs. 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. And there absolutely are more investors than there are good deals.

Venture Capital 117

Venture Capital Silicon Valley Founder Seed Stage 117

Agile VC

MAY 9, 2014

Such an approach is common in Silicon Valley… Google, Facebook, LinkedIn, and others have dual-class equity structures which give the holders of one class of shares (typically founders) disproportionate voting rights relative to their fully-diluted ownership stake in the company.

Government 153

Government Silicon Valley China Cofounder 153

K9 Ventures

JUNE 12, 2012

Some days in Silicon Valley it feels like there are more investors than there are entrepreneurs. 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. And there absolutely are more investors than there are good deals.

Venture Capital 105

Venture Capital Silicon Valley Founder Seed Stage 105

Both Sides of the Table

MAY 9, 2011

So embedded is this conventional wisdom in Silicon Valley that it feels like heresy to even question it. Conventional wisdom says that you gain far more in working as a team than you lose by diluted by half before you start. Give them a large sum of equity. It’s only 3 minutes, 44 seconds. Hire your co-founder.

Cofounder 393

Cofounder Founder Vesting Founder Vesting 393

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. First off, whatever you decide, you should implement vesting.

Cofounder 48

Cofounder Cap Table Equity Vesting 48

Both Sides of the Table

APRIL 25, 2011

There’s a line of thinking in Silicon Valley that you should build product businesses rather than services businesses. The founders could reinvest this in growth (0% tax, focus on future equity growth) or take the profits of $12 million and divide amongst the founding partners. This post originally appeared on TechCrunch.

Silicon Valley 332

Silicon Valley IP Dividend Finance 332

The Equity Kicker

NOVEMBER 9, 2016

I just read a New York Times article that led with the sentence “Deep inside a Silicon Valley unicorn lurks a time bomb”. That trade gives them less dilution and therefore more cash in upside scenarios but less cash (and potentially nothing) in extreme downside scenarios.

Liquidation Preference 122

Liquidation Preference Silicon Valley Participating Preferred Common Stock 122

Austin Startup

MARCH 7, 2021

In 2019 and 2020, we saw hundreds of millions of dollars in non-dilutive funding go to Texas startups, most of which had never worked with the government before. The second wave of companies were mainly concentrated in Silicon Valley, and coincided with the rise of platforms (Google, Facebook, etc.)

Texas 90

Texas San Antonio Houston Dallas 90

Reid Hoffman

JUNE 8, 2021

I came to Silicon Valley when I was 25, turning 26. And I think one of the things that we’ve learned is, when I came to Silicon Valley in 2007, we were starting Airbnb in 2008, it was a marketplace. But there’s something else that I think I learned, and that was that a lot of focus on Silicon Valley is about growth.

Silicon Valley 69

Silicon Valley Hosting Rhode Island Design 69

Both Sides of the Table

MARCH 11, 2010

I’ve even heard people repeat this bullsh*t Silicon Valley mantra about “failing fast&# which is horse puckey. Let’s assume that the $2 million buys 25% of your company, which is the norm in an equity financing. Should you take it? 24 months for most tech startups is usually too much money. - add a buffer.

Venture Capital 319

Venture Capital Startup Silicon Valley Warrant 319

Venture Chronicles

MAY 26, 2010

Back in March, Ben Horowitz of Andreessen Horowitz wrote a post called The Case For The Fat Startup, where he outlined some of the reasons why a fledging company might want to consider taking a large amount of funding — a strategy that contrasts with the ‘lean startup’ model that has become common in Silicon Valley.

Lean 40

Lean Early Stage Valuation Startup 40

Austin Startup

SEPTEMBER 10, 2017

SAFEs and Notes are optimized for speed and simplicity, with a cost of future uncertainty and dilution. Normally this is accepted as given, much like how when you close an equity round, the price you got is the price you got. They have their downsides, which are discussed in some of the above links.

Valuation 48

Valuation Dilution Silicon Valley Seed Stage 48

Lightspeed Venture Partners

NOVEMBER 19, 2012

Season 4 of week 10 of Shark Tank was interesting because two of the pitches were for internet businesses that I could imagine seeing in my day job as a Silicon Valley Venture Capitalis t. I cover one of them, for Nearly Newlyweds, over at Entrepreneur.com. The other one was for a company that describes itself as Netflix for neckties.

Pre-Money Valuation 166

Pre-Money Valuation Alabama Valuation Churn Rate 166

Reid Hoffman

JUNE 8, 2021

I came to Silicon Valley when I was 25, turning 26. And I think one of the things that we’ve learned is, when I came to Silicon Valley in 2007, we were starting Airbnb in 2008, it was a marketplace. But there’s something else that I think I learned, and that was that a lot of focus on Silicon Valley is about growth.

Silicon Valley 36

Silicon Valley Hosting Rhode Island Design 36

Diego Basch

MAY 1, 2013

This raises an obvious question: why did Joe take a shitty salary, a comparatively small equity stake, and then proceed to work as hard as a founder? They’d be burning their savings quickly while learning the Silicon Valley game. Bob (and maybe Pedro) could move to Silicon Valley for free, and make a reasonable salary.

Silicon Valley 59

Silicon Valley Employee Cofounder Salary 59

Startup Lessons Learned

JULY 26, 2011

When I came to Silicon Valley, I was inducted into a body of accumulated wisdom about how to handle them. I hope all of you who are reading this - no matter where you live, no matter what kind of company you have - will one day get to make the pilgrimage to Sand Hill Road in Silicon Valley, or another famous startup hub.

Antidilution 148

Antidilution Term Sheet Silicon Valley Widget 148

maplebutter.com

JANUARY 8, 2013

Ideally you can pay them based + equity so that you’ll get their attention and focus on the project. I have 2 options: set up a new startup or share my idea with google (or maybe another big silicon valley’s company). Co-founders are the highest form of dilution to a business. How does that usually work?

Technical Review 44

Technical Review Startup Cofounder Software Review 44

venturehacks.com

OCTOBER 21, 2010

Reading on, the term sheet states, “The $8 million pre-money valuation includes an option pool equal to 20% of the post-financing fully diluted capitalization.&# First, the option pool only dilutes the common stockholders. It states that the share price is $1.00… this must be a mistake!

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68

The Equity Kicker

MARCH 17, 2015

Big picture this increased capital efficiency is great for entrepreneurs because they suffer less dilution, but it does mean they have to do things they aren’t skilled at. Over the last fifteen years that has become accepted best practice. The opportunity for investors is to help fill the gaps.

Early Stage 60

Early Stage Venture Capital San Francisco Silicon Valley 60

Professor VC

DECEMBER 8, 2015

Musk was the early winner taking the CEO role (for a brief period) in the merged company and the largest equity stake as well. Not surprisingly, the merger was highly dilutive, particularly to Confinity/PayPal shareholders. I was a Limited Partner in Angel Investors II (Ron Conway's angel fund) that was an investor in Confinity.

Merger 28

Merger LP IPO Redemption 28

www.mattbartus.com

DECEMBER 9, 2012

Perspectives on issues affecting founders, startups and investors from a veteran startup lawyer in Silicon Valley. 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. Equity for Consultants - Keep.

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40

Professor VC

JULY 25, 2013

It is the story of the founding of the venture capital industry in Silicon Valley and features many of the iconic companies created including Apple, Intel, Genentech and Cisco. Another closely related area is that of variable pricing on convertible debt or equity deals where different investors have different caps.

Term Sheet 46

Term Sheet Silicon Valley Syndicate Syndication 46

Professor VC

JANUARY 17, 2008

The last blogger in Silicon Valley. I was on a panel earlier this week with several other investors from Angel Groups in the Valley. The panel was a typical Silicon Valley shmoozefest hosted at a law firm with about 75+ attendees. ProfessorVC. Thursday, January 17, 2008. Touched by an Angel.

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

www.startupnorth.ca

OCTOBER 23, 2010

Table 1: Options Grants in Silicon Valley for Series A from VentureHacks The numbers from VentureHacks are guidelines. and then further dilute for advisors (0.5% – 1% – 2%) and early employees (5 – 15% *if* they are foregoing major chunks of salary). More equity? Manager or Junior Engineer 0.2 – 0.33

Employee 41

Employee Founder Salary Equity 41

Up and Running

DECEMBER 9, 2014

We’re building a True SaaS company in Boise, Idaho, not in Silicon Valley or not in New York. Jared could you quickly tell us what are the pros and cons of a bank loan versus an investment for equity? The pro is that it’s cheap capital and it’s not diluted. Are you going for private equity?

Small Business 95

Small Business Finance Forecast Metrics 95

Pascal's View

JANUARY 28, 2010

The most important startup centers are Silicon Valley, metropolitan Boston, Seattle and Austin and, increasingly, northern Virginia. And the issue of equity dilution, always high on the CEO’s agenda, often clashes with the agenda of all venture backers.

Management 53

Management Silicon Valley Virginia Seattle 53

Small Business Force

OCTOBER 22, 2017

equity, debt, some combination) or how you intend to raise it (e.g., angel/professional investors, private equity, crowdfunding) the process will always take more time and resources than you can ever imagine. Less dilution! With geography, there’s the Silicon Valley and then, everywhere else.

Entrepreneur 25

Entrepreneur Angel Investor Valuation Investment Bankers 25

www.paulgraham.com

APRIL 28, 2010

Dilution is normal. They cant dilute you without diluting themselves justas much. And they wont dilute themselves unless they end up net ahead. So its your choicewhether you get diluted. [ Plus you get equity. How much does an angel invest? Angels are the limiting reagentin startup formation.

Angel Investor 63

Angel Investor Syndicate Syndication Dilution 63