Up and Running

DECEMBER 1, 2015

If you’re thinking about extending equity to an employee or a vendor (as in the example above), you should know that the topic is multi-faceted. If however you are giving a “normal employee” an incentive stock option plan (more on that later), that’s entirely different. Finding great employees first.

Equity 60

Equity Employee Stock Options Vesting 60

www.mattbartus.com

SEPTEMBER 24, 2011

We will grant him/her X% fully diluted shares up front, and every time he/she makes an introduction, he/she will vest in 100 shares.” People tend to underestimate how much record keeping is involved with managing employees and consultants, and this just adds an unacceptable extra burden. link] Casey Allen. Matt: Fantastic posts.

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

www.payne.org

SEPTEMBER 22, 2011

Startup Equity For Employees. 2 Stock Classes: Common and Preferred. 4 Vesting. 5 Stock vs Options. 6 Founders / Restricted Stock. NOTE: If youre an attorney or tax accountant with experience helping startup employees with stock and option issues, drop me a note. From Payne.org Wiki.

Equity 56

Equity Employee Vesting Preferred Stock 56

Steve Blank

OCTOBER 24, 2017

A 20th century VC was likely to have an MBA or finance background. The founders along with all the other employees would vest their stock over 4 years (earning 1/48 a month). They had to hang around at least a year to get the first quarter of their stock (this was called the “cliff”). 4. Founder-friendly VCs.

Founder 253

Founder Technical Review CTO Hire IPO 253

Tim Keane

JANUARY 12, 2010

For angel groups, the distinction between groups and VCs on this issue is dwindling, especially as angel groups do bigger rounds of financing.   Note that this applies only to earl stage Series A-type equity financings and assumes no cash dividends are paid to investors.   First , dividends.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Startup Company Lawyer

FEBRUARY 21, 2010

Due to aggregate liquidation preferences that may exceed the acquisition price in an M&A deal, common stock may be rendered worthless. If you can’t figure this out yourself, you should probably build a liquidation preference spreadsheet to model how liquidation preferences work depending on M&A transaction value.

Retention 31

Retention Liquidation Preference Employee Common Stock 31

K9 Ventures

NOVEMBER 21, 2011

2) Fairness to other early employees in the company : This is a very critical and important point, that is often overlooked by founders. In most situations that I have come across, the founders usually have a significantly longer tenure working at the company than even the earliest employees and so a founders-only cut-off is acceptable.

Founder 87

Founder Common Stock Preferred Stock Stock 87