Remove Early Stage Remove Hiring Remove Option Pool Remove Pre-Money Valuation
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Equity for Early Employees in Early Stage Startups

SoCal CTO

I was asked by a reader how much equity he should give out to early employees and to service providers in a very early stage startup. Founders vs. Early Employees To help with this discussion, let me start with a definition of "early employee." I'll get to service providers in a later post.

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Want to Know How VC’s Calculate Valuation Differently from Founders?

Both Sides of the Table

I’m not sure I really even need to write this at length because Nivi absolutely nailed the topic in his article “ The Option Pool Shuffle.&#. When I went to raise money in 2006 I thought I knew every term in a term sheet but somehow I still got a bit duped by the option pool shuffle. No gotchas.

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Cap Table Explained — What is it and How to Maintain it for Investors

Up and Running

For instance, the cap table will help you with various possibilities while running business activities like available options and pre-money valuations faster. This can be helpful when you are hiring a COO for the company, and the candidate asks to get percentage ownership in the company. Example of a cap table.

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What is it Like to Negotiate a VC Round?

Both Sides of the Table

In the old days VCs funded off of a “pre-moneyvaluation. If you add the pre-money valuation (let’s say $8 million) to the amount of money you’re raising (let’s say $2 million) you get the post-money valuation. How much is in the option pool?

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How to Fund a Startup

www.paulgraham.com

4 ] Seed Funding Firms Seed firms are like angels in that they invest relatively smallamounts at early stages, but like VCs in that theyre companiesthat do it as a business, rather than individuals making occasionalinvestments on the side. Angels and even VC firms occasionally do this, but they alsoinvest at later stages.