Both Sides of the Table

MAY 13, 2013

And a few teams of super talented, educated and bright entrepreneurs make a few mill. If the money comes from professional investors it usually has a “liquidation preference” meaning that their money comes out before the founders or common stock. (If I know many rank-and-file employees. in their 20′s.

Liquidation Preference 357

Liquidation Preference Early Stage Retention Lock-up Period 357

Both Sides of the Table

FEBRUARY 23, 2015

For some aspiring to be tech entrepreneurs, I often suggest a two-step process, as I argued in this post that “ The First Startup Founder You Need to Invest in Is You.” Of course I’m not suggesting people shouldn’t start a company. If you can and if you want to – you should.

Technical Review 150

Technical Review Liquidation Preference Silicon Valley IP 150

Both Sides of the Table

JANUARY 21, 2010

I recently read a post over on VentureHacks titled, “ Top Ten Reasons Entrepreneurs Hate Lawyers &# written by Scott Walker (who blogs on legal issues for entrepreneurs ). Forget to get around to setting up that Employee Stock Option Plan and want to be able to give the early guys their options at a low strike price?

Southern California 318

Southern California Silicon Valley IP Stock Options 318

SoCal CTO

JULY 13, 2010

How-to learn about angel/vc term sheets - Gabriel Weinberg , June 28, 2010 I think every startup entrepreneur (and angel investor) should have a good understanding of financing term sheets. liquidation preference. You’re Not a Real Entrepreneur - Steve Blank , June 10, 2010 Who is an entrepreneur really?

Cofounder 175

Cofounder Technical Cofounder Term Sheet Startup 175

abovethecrowd.com

FEBRUARY 24, 2015

Buying into such a notion is dangerous – dangerous for the entrepreneur and dangerous for the investor. As a simple example, many investors and entrepreneurs do not realize that coupon or discount use is a contra-revenue event when it comes to revenue recognition. You must subtract it from your top-line revenue.

IPO 40

IPO Liquidation Preference Valuation Technical Review 40

Gust

MAY 24, 2012

Yet I’m skeptical that a widespread shift will occur anytime soon, and for reasons discussed below, as much as I admire and advocate for talented entrepreneurs, I believe it would be a losing proposition for nearly all involved. Options and warrants, when issued, are also typically exercisable for shares of Common Stock.

IPO 159

IPO Equity Common Stock Stock 159

Gust

SEPTEMBER 17, 2014

Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago. Him: Not so good. Obviously he’d be pissed off.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Tim Keane

JANUARY 12, 2010

Please see later version of this post on May 16, 2010 Entrepreneurs are often not experts in the area of term-sheet negotiations and all of the surrounding issues.   Investors sometimes “present” the terms they’d like and expect the entrepreneurs to react. Term-sheets and Valuations: Thinking about Negotiations.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Austin Startup

AUGUST 1, 2017

TL;DR: In a market that has historically idolized huge, splashy financings and exits, an increasing number of entrepreneurs are realizing that everyone else’s definition of success — particularly among certain large VCs — isn’t necessarily aligned with their own. Most individual VCs can only support about 7–10 companies at a time.

Liquidation Preference 48

Liquidation Preference Common Stock Valuation Silicon Valley 48

Board Effect

MAY 10, 2019

Such metrics can include an investor’s liquidation preference, option exercise windows and expiry dates, and shareholders’ fully diluted ownership percentages. There’s the owner—maybe a partner or two—but unless employees are offered equity from the get-go, there’s typically not a whole lot of dilution. Liquidation Preferences.

Cap Table 40

Cap Table Liquidation Preference Dilution Liquidity Event 40

abovethecrowd.com

APRIL 20, 2016

All Unicorn participants — founders, company employees, venture investors and their limited partners (LPs) — are seeing their fortunes put at risk from the very nature of the Unicorn phenomenon itself. We have already seen examples of founders and management obtaining liquidity in front of investors.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Both Sides of the Table

SEPTEMBER 6, 2010

We set our sites on our IPO price and then worked back to our current valuation and showed potential employees what we thought they could earn (with all legal caveats) if the company was successful. Options are obviously a very important economic motivator for your first 3-5 employees and your most senior management team.

Stock Options 294

Stock Options Stock Valuation Liquidation Preference 294

Both Sides of the Table

SEPTEMBER 28, 2013

You know this isn’t likely to lead anywhere and frankly you didn’t quit your job to pursue your life dream of being an entrepreneur to sell 12 months later in an acquihire. The don’t understand VC liquidation preferences or multiple return expectations. But staff can’t make the delineation in their heads.

Startup 417

Startup Dilution San Diego Stock Options 417

The Equity Kicker

DECEMBER 30, 2013

Interestingly though, I think things end up looking pretty similar for the entrepreneur. but she will most likely now be sitting behind a $25m liquidation preference and have taken on new investors who want to exit the company for at least $240m (to get 3x on their investment). Griffin puts it this way: 7.

Finance 129

Finance Liquidation Preference Valuation Harvest 129

genylabs.typepad.com

SEPTEMBER 24, 2011

The Changing Face of Entrepreneurs. The Connected World of Entrepreneurs. Entrepreneur Magazine Blog. where your stock sits in the liquidity preference stack. what rights and preferences the founders and the other investors have. My post looks at this from the consultant/employee point of view.

Equity 40

Equity Technical Review San Jose Stock 40

Both Sides of the Table

NOVEMBER 4, 2009

I often have career discussions with entrepreneurs – both young and more mature – whether they should join company “X&# or not. BTW, this ignores liquidation preferences which actually mean you’ll earn less. He’d be employee number 3. Tags: Entrepreneur Advice Startup Advice.

Stock Options 418

Stock Options Stock Liquidation Preference Option Pool 418

techcrunch.com

FEBRUARY 25, 2010

As Mark Suster recently noted , employees will never see a big payday at most startups unless the company shoots for the moon. The remaining 95 employees split 7%, each earning $27,000. Unlike the founders, the employees have to wait until their grants vest, working at a company no longer of their choosing for two years.

Liquidation Preference 63

Liquidation Preference Founder Option Pool Acquisition 63

dondodge.typepad.com

JANUARY 15, 2011

Community is more powerful than money or technology » August 11, 2007 How much equity for investors and employees? Entrepreneurs face some pretty tough questions at a very early stage. How much equity should I grant to early employees? S houldnt the entrepreneur negotiate to only give up 20% of the company for $1M?

Equity 40

Equity Employee Dilution Valuation 40

Both Sides of the Table

FEBRUARY 14, 2016

I’d like to explain as best I can my opinion on what is going on because most of what I hear from entrepreneurs is not only wrong but is reminiscent of what I heard in 1997-2000. ” “This will be great for VCs and bad for entrepreneurs.” What is the True Sentiment of VCs? ” “Sure, prices are dropping.

Valuation 150

Valuation Down Round Startup Later Stage 150

Up and Running

MARCH 29, 2017

I knew I wanted to be an entrepreneur long before I could even spell entrepreneur. I’d always been an entrepreneur, so having my first taste of a full-time job was something I was both happy to do and gave me a great sense of what that “other life” would look like. See Also: What Do Venture Capital Firms Want?

Term Sheet 60

Term Sheet Venture Capital Liquidation Preference Valuation 60

Both Sides of the Table

JULY 19, 2011

Yet a critical mistake I see many entrepreneurs make is that they hand over too much control to their third-parties. For one, due to the way liquidation preference work sometimes they have “flat spots&# which means that they might earn the exact same amount from a $40 million sale as they would from a $50 million sale.

Term Sheet 319

Term Sheet PR Liquidation Preference Stock Options 319

Professor VC

JULY 25, 2013

This is the feeling you get from watching the venture capitalists talk about the entrepreneurs and other investors in the film. In investment parlance, it strictly means that new classes of stock have equal rights with prior classes in terms of liquidation preference, voting rights, etc. Startup outcomes tend to be very binary.

Term Sheet 46

Term Sheet Silicon Valley Syndicate Syndication 46

www.mattbartus.com

DECEMBER 9, 2012

My question is, can you elaborate on the benefits you see for the entrepreneur in trying to sell this to the investors? My question is, can you elaborate on the benefits you see for the entrepreneur in trying to sell this to the investors? Employees, Advisors & Consultants (12). link] Roy Rodenstein. link] Brad Hargreaves.

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40