Startup Professionals Musings

JULY 1, 2022

Offers near the high end of a range will likely come with a lower cash salary, maybe even 50% of the going rate. You should also assume that your percentage will go down through dilution as the company raises additional rounds, and offer sizes will go down as the company grows.

Stock Options 343

Stock Options Advisory Board Stock Startup 343

The Next Web

NOVEMBER 20, 2013

So, a fair split, would be closer to 60/40 in favor of the funding founder, when diluted for the cash. The calculation comes as follows: original 50/50 diluted down 20 percent to 40/40 for the financing, and then the one funding founder gets that 20 percent. Is this person taking a salary or not?

Cofounder 136

Cofounder Equity Founder Seed Stage 136

SoCal CTO

MAY 10, 2011

A long-time friend and colleague, Steve Wexler, who is great at visualization took my Startup CTO Salary and Equity Data and produced a really need interactive visualization via Tableau. Of course, as you would suspect, equity percentages dilute based on years in business. Most non-founders have less than 2%.

Salary 198

Salary Equity San Francisco Dilution 198

Feld Thoughts

SEPTEMBER 2, 2011

With the funds Jane and Dick have, a big salary is not possible. If the full pool were to be given out, the dilution is fairly significant to the founders. They would own from 55% and 45% down to 36% and 29%, but until options are exercised they are not diluted. Praveena wants to invest $20,000 and get 20% equity.

Cap Table 133

Cap Table CTO Hire Technical Cofounder Cofounder 133

SoCal CTO

MAY 10, 2011

A long-time friend and colleague, Steve Wexler, who is great at visualization took my Startup CTO Salary and Equity Data and produced a really need interactive visualization via Tableau. Of course, as you would suspect, equity percentages dilute based on years in business. Most non-founders have less than 2%.

Salary 175

Salary Equity San Francisco Dilution 175

Startup Professionals Musings

OCTOBER 7, 2022

Ancillary objectives, like retiring existing debt, buying a building or paying salaries to people with equity ownership will not get traction. Most professional investors will expect preferred stock, a board seat, rights to later rounds and perhaps anti-dilution protection. How much equity ownership are you willing to offer?

Preferred Stock 304

Preferred Stock Exit Strategy Equity Angel Investor 304

David Teten

JANUARY 19, 2021

Flexible VCs have created structures based on other company performance metrics than revenues, such as profits or founder salaries. Similarly, when Flexible VC structures are based off of the founder’s own compensation (often via salary or dividends), investors are specifically tying their returns to the financial success of the founder.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Berkonomics

DECEMBER 7, 2023

Here’s an example we’ve heard before: Cohen sets up an example where a senior position job candidate is stuck on a salary twice as high as the CEO is willing to pay, leading to a standoff between the two. Then again, there are those seductive unicorn opportunities. The post Stock options or more cash? first appeared on BERKONOMICS.

Stock Options 62

Stock Options Stock Salary Dilution 62

Startup Professionals Musings

JANUARY 4, 2020

Ancillary objectives, like retiring existing debt, buying a building or paying salaries to people with equity ownership will not get traction. Most professional investors will expect preferred stock, a board seat, rights to later rounds and perhaps anti-dilution protection. How much equity ownership are you willing to offer?

Startup 337

Startup Preferred Stock Exit Strategy Equity 337

The Startup Lawyer

JUNE 9, 2010

A startup’s Series A financing shouldn’t be a large liquidity event or salary payday for the startup’s founders. The term sheet was pretty much a done deal, when the startup’s CEO demanded a salary of $25,000. The Importance of Startup CEO Salary. The CEO’s salary sets a cap for everyone else.

Salary 99

Salary Term Sheet Liquidation Preference Liquidity Event 99

Startup Professionals Musings

SEPTEMBER 25, 2019

Offers near the high end of a range will likely come with a lower cash salary, maybe even 50% of the going rate. You should also assume that your percentage will go down through dilution as the company raises additional rounds, and offer sizes will go down as the company grows.

Equity 237

Equity Stock Options Advisory Board Stock 237

Both Sides of the Table

JANUARY 4, 2014

It either needed to get more aggressive in pricing, pivot to a new business or business model or raise more capital (and take the dilution) in order to have more time to figure things out. The company hadn’t performed well financially and need to make changes. We sat down the three of us.

Founder 340

Founder Sacramento Cofounder Technical Review 340

David Teten

AUGUST 19, 2019

Benefits: Non-dilutive, flexible credit offerings that fit SMB or enterprise SaaS. Founder Earnings = Net Income + any amount of founders’ salaries over a certain threshold. If you want to eat ramen, pay yourselves a small salary, and reinvest every dollar into growth, we don’t get a penny and that’s okay. over next 12 months.

Revenue 60

Revenue Technical Review Software Review Equity 60

VC Adventure

AUGUST 16, 2020

Yet others try to use cash to minimize dilution for early employees and try to rapidly reduce their reliance on options. I’ve sometimes seen companies make offers with a range of salary and options – making explicit the trade-off they are offering between cash compensation and options.

Programming 149

Programming Vesting Equity Software Review 149

This is going to be BIG.

NOVEMBER 28, 2021

I mean, think about it—if you have to pay a recruiter to hire someone, you’re paying, on average, 25% of their first year salary anyway. Take a little more dilution, raise a little more money, and spend on the most ignored personal goal in the market. Plus, you can allow people to vest into the program.

Hiring 179

Hiring Early Stage Marketing Term Sheet 179

keen.io

FEBRUARY 5, 2013

And if the CEO says, “Salaries will be adjusted to market value soon,” that’s probably a best-case scenario. And they gave me a choice whether I’d want more stock or a higher salary.” It’s so weird to be negotiating my salary with our friends. It seems like I should take the highest salary and the lowest equity.

Salary 50

Salary Equity Startup San Francisco 50

Both Sides of the Table

NOVEMBER 14, 2017

Whereas New York City has very high real estate costs and very high salaries, launching in Chicago and D.C. Raise too soon and likely take on more dilution, wait and get valuation up (as our metrics continue to rise) but then run to a point where you have a lower cash balance and place more risks on the business. were more distributed.

Operations 286

Operations New York City Technical Review Startup 286

This is going to be BIG.

FEBRUARY 27, 2011

You get dilution sensitive and you start optimizing on price of a financing deal, versus finding the right partners or raising enough money to grow. I’ve never heard of a team that did this, and then regretted the decision to take a little more money (and dilution) in a round to get the best people around a table. Healthcare?

Dilution 104

Dilution Equity Hiring Partner 104

www.avc.com

SEPTEMBER 22, 2011

The other important data point is the number of fully diluted shares. Then you multiply the employee's base salary by the multiplier to get to a dollar value of equity. You get that by dividing the best value of your company ($25mm) by the fully diluted shares outstanding (10mm). Let's say the number is $25mm.

Equity 64

Equity Employee CTO Hire Fractional CTO 64

Startup Professionals Musings

OCTOBER 21, 2017

Offers near the high end of a range will likely come with a lower cash salary, maybe even 50% of the going rate. You should also assume that your percentage will go down through dilution as the company raises additional rounds, and offer sizes will go down as the company grows.

Stock 140

Stock Stock Options Advisory Board Startup 140

ReadWriteStart

OCTOBER 28, 2010

Common areas to address are decisions around capitalization, executive hiring and firing, share issuance (dilution), and acquisitions. Under what circumstances will someone decide that they just can't commit to the business full time anymore; for example, if the founders have to go without a salary for six months.

Cofounder 128

Cofounder Founder Equity Dilution 128

View from Seed

DECEMBER 4, 2014

It’s also worth keeping in mind that regardless of how the founders’ common stock is divided, there will be future issuance of stock that will dilute the founders over the lifecycle of the company. Next, those that were forgoing some or all salary prior to Series A got an additional chunk for that.

Equity 315

Equity Founder Sweat Equity Cofounder 315

Berkonomics

OCTOBER 12, 2017

Cohen sets up an example where a senior position job candidate is stuck on a salary twice as high as the CEO is willing to pay, leading to a standoff between the two. In a previous insight, we explored the common percentage of a company’s fully diluted stock that is often granted in the form of options for new employees. (See

Employee 97

Employee Stock Options Dilution Salary 97

Startup Professionals Musings

OCTOBER 17, 2013

Offers near the high end of a range will come with a lower cash salary, maybe even 50% of the going rate. You should also assume that your percentage will go down through dilution as the company raises additional rounds, and offer sizes will go down as the company grows.

Stock Options 224

Stock Options Stock Advisory Board Startup 224

Both Sides of the Table

JUNE 17, 2017

If you hire 6 senior sales reps in January at $120,000 / year salary then you’ve taken on an extra $60,000 per month in costs yet these sales people might not close new business 6 months. Stock option grants dilute your ownership in the company. The most obvious way to explain this is with sales people.

Stock Options 227

Stock Options Startup Dilution Venture Capital 227

Agile VC

DECEMBER 4, 2014

It’s also worth keeping in mind that regardless of how the founders’ common stock is divided, there will be future issuance of stock that will dilute the founders over the lifecycle of the company. Next, those that were forgoing some or all salary prior to Series A got an additional chunk for that.

Cofounder 255

Cofounder Equity Founder Sweat Equity 255

Startup Professionals Musings

SEPTEMBER 22, 2012

Offers near the high end of a range will come with a lower cash salary, maybe even 50% of the going rate. You should also assume that your percentage will go down through dilution as the company raises additional rounds, and offer sizes will go down as the company grows.

Stock Options 230

Stock Options Stock Advisory Board Startup 230

Both Sides of the Table

SEPTEMBER 29, 2009

The other investors around the table didn’t agree nor did the “independent” board members who were willing to turn a blind eye to capital inefficiency since they didn’t have any economic interests that would be diluted by continued fund raising to support a capitally inefficient management team.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

Startup Professionals Musings

JULY 24, 2011

Offers near the high end of a range will come with a lower cash salary, maybe even 50% of the going rate. You should also assume that your percentage will go down through dilution as the company raises additional rounds, and offer sizes will go down as the company grows. Your compensation is the total package, stock plus salary.

Equity 234

Equity Advisory Board Stock Options Stock 234

Startup Professionals Musings

MARCH 29, 2015

Offers near the high end of a range will likely come with a lower cash salary, maybe even 50% of the going rate. You should also assume that your percentage will go down through dilution as the company raises additional rounds, and offer sizes will go down as the company grows.

Stock Options 120

Stock Options Stock Advisory Board Startup 120

Both Sides of the Table

SEPTEMBER 28, 2013

You scraped together enough for an angel round but not enough to pay yourself a real salary. Dilution / valuation. I hate when companies publish too much information about the total stock option allocations, the company valuations, the dilution faced in every round, etc. I wasn’t expecting this much dilution this quickly.”

Startup 417

Startup Dilution San Diego Stock Options 417

Up and Running

AUGUST 7, 2013

Don’t take a note for the next salary review. Every day you wait dilutes the impact. . A quick bonus has more impact than a future salary increase. A $100 gift certificate given instantly can have more impact than a $25-per-month salary increase. Do not wait. Do it right now. I’ve seen that many times.

Salary 120

Salary Dilution Leadership Employee 120

Andrew Payne

SEPTEMBER 9, 2017

Then, there’s some case-by-case tweaking for competitive situations, salary trade-offs, the company’s need for that particular skill, or other circumstances, but this is a typical starting spot. First, founders can agree on ownership ratios among themselves, completely isolating unknown, future dilution.

Equity 71

Equity Founder Vesting Dilution 71

Agile VC

DECEMBER 4, 2014

It’s also worth keeping in mind that regardless of how the founders’ common stock is divided, there will be future issuance of stock that will dilute the founders over the lifecycle of the company. Next, those that were forgoing some or all salary prior to Series A got an additional chunk for that.

Cofounder 173

Cofounder Equity Founder Sweat Equity 173

Startup Professionals Musings

SEPTEMBER 5, 2016

Don’t let early funding increase risk and dilute your potential. You can use it best to entice outstanding team members and partners, building a level of commitment you don’t get with salaries alone. Spread your equity internally to build the team. Bootstrapping doesn’t mean that you don’t share equity.

Bootstrapping 120

Bootstrapping Entrepreneur Startup Exit Strategy 120

Austin Startup

MAY 8, 2018

The further you move away from the founder team, the greater the dilution of a person’s commitment to the “mission” of the startup; and that means more cash to keep them committed. In the very early days, employees are often paid more than founders / senior executives.

Employee 48

Employee Seed Stage Startup Equity 48

Up and Running

JANUARY 23, 2013

If the value of the education does not exceed the value of the salary you’re getting, you’re doing something wrong, or you’re in the wrong company.6. Learn the basics of things like shares, options, vesting schedules, dilution and taxes. I’ll let the link here take you to his full list. Learn to balance risk.

Vesting 113

Vesting Dilution Startup Salary 113