Berkonomics

JANUARY 7, 2021

So, co-management is the second group to share in the bounty upon a liquidity event. Email readers, continue here…] Often, if not co-founders, this group is rewarded through issuance of stock options from a pool of available options that usually totals 15-20% of the total company’s equity divided among all employees.

Liquidity Event 96

Liquidity Event Pre-Money Valuation Cofounder Initial Public Offering 96

Startup Professionals Musings

AUGUST 10, 2019

Most entrepreneurs struggle with many startup founders quandaries in building their business, and these key dilemmas are probably the biggest source of pain and failure for the entrepreneur lifestyle. Should you start a company solo or find co-founders to help you? The co-founder relationship dilemma.

Hockey Stick 243

Hockey Stick Cofounder Liquidity Event Startup 243

Gust

DECEMBER 1, 2011

Notice what is missing from this list of priorities: The company itself – that is, a business entity, most often a corporation , that will own the entire business (however defined), issue equity to founders, take investment capital , enter into contracts, make sales, pay employees and contractors, and so forth.

IP 114

IP Intellectual Property Equity Liquidity Event 114

Startup Professionals Musings

DECEMBER 14, 2014

Most entrepreneurs struggle with many startup Founders dilemmas in building their business, and these key dilemmas are probably the biggest source of pain and failure for the entrepreneur lifestyle. Should you start a company solo or find co-Founders to help you? The co-Founder relationship dilemma.

Hockey Stick 268

Hockey Stick Cofounder Entrepreneur Liquidity Event 268

Startup Professionals Musings

AUGUST 19, 2017

Most entrepreneurs struggle with many startup founders dilemmas in building their business, and these key dilemmas are probably the biggest source of pain and failure for the entrepreneur lifestyle. Should you start a company solo or find co-founders to help you? The co-founder relationship dilemma.

Hockey Stick 144

Hockey Stick Cofounder Entrepreneur Liquidity Event 144

Berkonomics

NOVEMBER 1, 2018

Some companies, especially those financed by angel or VC investors, have good, formal stock option plans with properly priced options set to reward all employees and managers in the event of a corporate sale. I found myself in such a situation upon a sale of my computer software company. And a lack of plans for others.

Stock Options 192

Stock Options Stock Distribution Programming 192

Gust

JUNE 7, 2014

Every investment round in a company is made on the basis of extensivepaperwork (often upwards of 100 pages in total) specifying *precisely* what happens when it comes time to pay out the proceeds (if any) from the sale or dissolution of the company. So, here is the typical payout order, from first to last: 1) Salaries owed to employees.

Warrant 157

Warrant Preferred Stock Early Stage Common Stock 157

Berkonomics

JUNE 12, 2014

So co-management is the second group to share in the bounty upon a liquidity event. Often, if not co-founders, this group is rewarded through issuance of stock options from a pool of available options that usually totals 15-20% of the total company’s equity divided among all employees.

Liquidity Event 85

Liquidity Event Pre-Money Valuation Cofounder Initial Public Offering 85

Steve Blank

JULY 15, 2010

Number of Venture Backed Liquidity Events 1991-2000. Number of Venture Backed Liquidity Events 2000-2010. They’ve created virtual IPO’s for founders and employees via late-stage private financing. If you’re starting a software company, your exit is most likely a sale to a larger company.

Venture Capital 297

Venture Capital IPO Liquidity Event Entrepreneur 297

Gust

NOVEMBER 4, 2011

This discussion expands on my Quora answer to a specific question: “ Why were the stock options of MySpace employees worthless even though the company was sold to News Corporation for hundreds of millions? ” The complete story includes a startup-within-a-startup, investments and exits by two VC firms, and some genuine corporate drama.

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

Berkonomics

JANUARY 6, 2022

First, the marginal exit event: Sometimes the end game or sale of the company is not a happy event for the early investors, including the entrepreneur or the founders. This makes for some head-rubbing when attempting to calculate the return on investment with a proposed sale.

Dividend 62

Dividend IRR Preferred Stock Participating Preferred 62

Berkonomics

JUNE 2, 2010

How about incentives for employees all the way down the line and through the corporation? But how about awarding stock options to all employees? . Tech companies, particularly early stage and startups, still award options aggressively. Email readers continue here.]

Liquidity Event 86

Liquidity Event Stock Options IPO Stock 86

Seeing Both Sides

SEPTEMBER 15, 2015

We selected this benchmark because it reflects the phase in which companies have proven product viability, achieved initial product/market fit, and are now expanding sales and growing more complex operations. The founders have started companies before. More recently, Israeli founders are themselves moving to the U.S.

Cofounder 20

Cofounder Technical Review United States 20

Berkonomics

DECEMBER 17, 2020

If you have a virtual company with your employees working from home locations, as many startups do, it should be the location of the founder. All angel groups will want to see the founders in person or by Zoom at sometime early in the process. Being in a distant city greatly reduces the chance of funding success.

Equity 62

Equity Finance Liquidity Event Angel Groups 62

Berkonomics

JANUARY 13, 2022

Not many founders or entrepreneurs do experience the success of a favorable sale of the business they dreamed would make them rich. Others are diluted by subsequent investors to the point where there was nothing for them to celebrate at all in a sale. …and consider those whose exits were not so great. Many fail multiple times.

Dilution 62

Dilution .Net Sales Entrepreneur 62

The Next Web

SEPTEMBER 29, 2013

The Founder’s gut wrongly tells them their business plan has been validated because they received an investment. They feel the money can and should be spent on ways to grow the company, so they shift into growth mode by hiring more employees, paying themselves, hiring salespeople, running paid ad campaigns, and spending on overhead.

Metrics 136

Metrics Cofounder Cram Down Liquidity Event 136

Berkonomics

OCTOBER 1, 2015

Sometimes the end game or sale of the company is not a happy event for the early investors, including the entrepreneur or the founders. Most sophisticated investors will take either a promissory note or preferred stock, both of which come before founder or management stock in a sale or liquidation.

Dividend 48

Dividend Preferred Stock IRR Participating Preferred 48

www.quora.com

JANUARY 16, 2011

Find Questions, Topics and People Add Question Add Question Non-Technical Co-Founders Co-Founders Technical Co-founders Finding Co-Founders Startups & "How Important Are Ideas?" " Web Development Startups Solo Founders I am a creative guy with a startup idea. Rockstar v.

Developer 42

Developer Technical Review Cofounder Technical Cofounder 42

www.vccafe.com

MARCH 11, 2013

.” Hackernews list of “Tools of the Trade” for startups - includes over 150 SaaS tools used by startups, and over 150 comments with interesting insights from founders. turn customer feedback into sales and relationships. BambooHR -Â Employee Records, Benefit Information, Payroll Data, etc. SnapEngage â??

Software Review 53

Software Review Technical Review Startup 53

Berkonomics

OCTOBER 7, 2011

For employees, a late or missed payroll is the ultimate test of corporate loyalty, divorced even from an employee’s ability to make do without a paycheck. And it is that disconnected employee, usually one or more of the better performers, that starts looking for a job when times look bad for a company.

Valuation 54

Valuation Dilution Down Round Employee 54

Berkonomics

OCTOBER 8, 2015

Not many founders or entrepreneurs do experience the success of a favorable sale of the business they dreamed would make them rich. Others are diluted by subsequent investors to the point where there was nothing for them to celebrate at all in a sale. And to celebrate for yourself, for making it all the way to the finish line.

Entrepreneur 48

Entrepreneur Dilution .Net Sales 48

Hunter Walker

SEPTEMBER 29, 2022

So for the most part a venture investor holds their equity until the company exits via an acquisition, IPO, or some sort of other liquidity event (management buyout, whatever). We’re aligned with the founders and the rest of the cap table until we aren’t. You might think, “Hunter!

Venture Capital 122

Venture Capital Cap Table LP Equity 122

Berkonomics

APRIL 3, 2014

If you are starting a virtual company with your employees working from home locations, as many startups do, it should be the location of the founder. All angel groups will want to see the founders in person at sometime early in the process. Being located in a distant city greatly reduces the chance of funding success.

Equity 92

Equity Finance Liquidity Event Angel Groups 92

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