SoCal CTO

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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." If the company's valuation is $2 million, $90k is 4.5%.

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How Investors Think About Valuation of Pre-Revenue Startups

SoCal CTO

A lot of my time is spent helping early-stage companies get to proof points so that they can raise capital. They might have some seed money and are thinking or raising a Series A based on success of an early release (MVP). Bill Payne is an expert on how early-stage investors should look at valuation.

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Angel Investment Criteria

SoCal CTO

By way of background for the question, there’s a great post by Bob Aholt, a Pasadena Angel: An Angel Investor’s Thoughts on Valuation. The largest number of exit transactions today are in the under $30-million valuation range. I guess I’m wondering why early stage investment isn’t aiming at these kinds of investments?

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Entreprenuer Questions

SoCal CTO

and how much is enough to build solid traction to drive the right valuation to go for large money? how much product development is enough to get in the market and start getting feedback and what should I focus on in the early stages of the product? how much 'traction' is enough for investors? Who should I get involved?