Feld Thoughts

SEPTEMBER 2, 2011

As Finance Fridays continues, we are introducing the concept of the Cap Table. The founders each have common shares that will vest over four years. The vesting schedule protects each of the co-founders in case one gets hit by a bus or decides to drop the project after a short period of time.

Cap Table 133

Cap Table CTO Hire Technical Cofounder Cofounder 133

Scott Edward Walker

OCTOBER 19, 2020

In a couple of cases, the founders played lawyer on their own; in the other cases, the founders either used (i) a Web service that did not address IP issues or (ii) an inexperienced law firm. This would arise as a result of a founder improperly “moonlighting” (i.e., Any IP created by a founder (e.g.,

IP 52

IP Software Review Founder Technical Review 52

The Next Web

OCTOBER 7, 2013

They were referring to non-founder engineers, most commonly the first hire for technology businesses. is frequently granted ownership significantly less than that of the founders. However, at the very early stage, they are taking as much risk with their future as the founders. Engineer #1?

Engineer 129

Engineer Dilution Option Pool Vesting 129

www.avc.com

SEPTEMBER 22, 2011

Employee Equity: How Much? The most common comment in this long and complicated MBA Mondays series on Employee Equity is the question of how much equity should you grant when you make a hire. And the amount of equity you need to grant to accomplish these hires is also an art and most certainly not a science.

Equity 64

Equity Employee CTO Hire Fractional CTO 64

Altgate

JUNE 25, 2012

—————– Dead equity — equity held by employees and founders no longer working at the company — is a large and growing problem. Choe opted to forgo a cash payment “in the thousands” for the equity equivalent at the time. Re-posted from post co-authored with Prof. million.

Equity 44

Equity Vesting Cap Table Technical Review 44

The Next Web

JULY 21, 2013

You have an awesome idea and a great co-founder with whom you want to work. An exit does not only mean to sell your company, it is also the sign hanging on top of the door through which your partners can walk away with your equity. This is why vesting is so important. Investing in vesting. An example.

Vesting 143

Vesting Founder Chile Equity 143

www.inc.com

SEPTEMBER 24, 2011

Finance | Tuesdays. Financing a Small Business. Financing A Small Business. Personal Finance. Should You Share Equity with Consultants? To grow his cash-strapped start-up, Parker ended up sharing equity -- not only with employees, but also with consultants and vendors. Start-up | Mondays. How to Incorporate.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

Altgate

AUGUST 25, 2012

—————– Dead equity — equity held by employees and founders no longer working at the company — is a large and growing problem. Choe opted to forgo a cash payment “in the thousands” for the equity equivalent at the time. Re-posted from post co-authored with Prof. million.

Equity 28

Equity Vesting Cap Table Technical Review 28

Startup Lessons Learned

APRIL 24, 2012

The following is an excerpt from HBS Professor Noam Wasserman’s new book, The Founder's Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup. The book taps Noam’s analyses of data on 10,000 founders, plus the personal stories of Evan Williams of Twitter, Tim Westergren of Pandora, and two dozen other founders.

Equity 168

Equity Founder Cofounder Vesting 168

www.mattbartus.com

SEPTEMBER 24, 2011

Perspectives on issues affecting founders, startups and investors from a veteran startup lawyer in Silicon Valley. Equity for Consultants – Keep it Simple! posted Feb 3 in Equity , People issues. The most you lose is 1 or 2 months of vesting on the stock. A View from the Valley. Blog blog archive. Quora Answers.

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

Feld Thoughts

JULY 29, 2011

Finance Friday’s gets off the ground with today’s post by introducing you to an imaginary startup, the entrepreneurs that we’ll being following throughout the series, and their first challenges: splitting up the founders’ equity and addressing the case where one of the founders provides the initial seed capital for the business.

Equity 137

Equity Finance Pre-Money Valuation Denver 137

www.seriesseed.com

DECEMBER 9, 2012

Series Seed Financing Documents Blog. Series Seed Financing Documents. Listed below are links to weblogs that reference Series Seed Financing Documents : 1 Reblog. We went with equity because ivestors would prefer to get equity for the following reasons: 1. SeriesSeed.com. Blog Archives. Thanks in advance!

Finance 40

Finance Term Sheet Vesting LLC 40

www.quora.com

SEPTEMBER 22, 2011

Type to Add and Search Questions; Search Topics and People Startups Startup Compensation Entrepreneurship Compensation Stock Options Major Internet Companies Silicon Valley Why is there such a large founder to early employee equity drop-off? This ties into this Paul Graham article: [link] /equity.

Equity 40

Equity Employee Founder Cofounder 40

Both Sides of the Table

SEPTEMBER 29, 2013

” From the hyperbolic Jason Calacanis weighing in that “The petty VC’s did everything to deride [Naval, the co-founder of AngelList]” as though the industry was collectively s g its pants that AngelList was going to put us out of business. founder fighting. founder fighting. Both are right.

Syndicate 356

Syndicate Syndication Cofounder Early Stage 356

venturehacks.com

FEBRUARY 24, 2010

SUPPORTED BY Products Archives @venturehacks Books AngelList About RSS How to pick a co-founder by Naval Ravikant on November 12th, 2009 Update : Also see our 40-minute interview on this topic. Picking a co-founder is your most important decision. One founder companies can work, against the odds (hello, Mark Zuckerberg).

Cofounder 101

Cofounder Founder Technical Cofounder Technical Review 101

David Teten

DECEMBER 3, 2019

Private equity and venture capital investors are copying our sisters in the hedge fund world: we’re trying to automate more of our job. . In the private equity universe, most Partners have primary training as deal-makers, not as managers. (To see the video above, please click the image, and then click on the Play button.).

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

www.instigatorblog.com

OCTOBER 23, 2010

Changing Equity Structures for Early Startup Employees Tweet Recently someone asked me for advice on how much equity they should give to their early employees. David Crow just posted about this very topic: Founders vs. Early Employees and shows the Venture Hacks chart. But I also told him that I though the numbers were wrong.

Equity 41

Equity Employee Startup Vesting 41

Eric Friedman

JUNE 27, 2016

Total = 0.75% for 3 advisors that vest as you see fit to help you over the next 1–4 years (more on vesting below). Bigger/better advisors who get more equity have things like; excellent domain expertise to help you avoid pitfalls, deep connections within the industry to help with the intros, partnerships, and more.

Equity 98

Equity Vesting Cap Table Common Stock 98

Software By Rob

NOVEMBER 16, 2009

This morning Seth Godin published a post titled Debt, equity and a third thing that might work better. I was surprised by this, as I thought Seth was going to discuss another option I’ve seen used with great success: customer financing. Customer financing is not popular with startups because it’s hard.

Equity 42

Equity Software Review RSS Widget 42

Hunter Walker

AUGUST 24, 2014

The vast majority of my future savings was (a) not vested yet and (b) tied to hope for future stock grants I’d earn. It’s for reasons like these that I support getting startup founders some liquidity during their company’s first few years, perhaps as early as Series A financing when appropriate.

Founder 109

Founder San Francisco Liquidity Event LP 109

Both Sides of the Table

SEPTEMBER 18, 2014

It’s like we need a finance 101 course for entrepreneurs. In finance they call it “terminal value” but the truth is the price is as arbitrary at your A round as it is at your seed round. I know how to structure around that to protect the founders from getting screwed on a multiple liquidation preference.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

www.founderinstitute.com

MARCH 2, 2010

He has been actively involved in merger, acquisition and disposition transactions with a combined value of over $1 billion, and financing/investment transactions and securities offerings worth over $600 million. Participation" means that investors "double dip" by getting both their liquidation preference and their equity allocation. -

Term Sheet 40

Term Sheet Liquidation Preference Vesting San Diego 40

techcrunch.com

SEPTEMBER 6, 2012

As CEO and co-founder Naval Ravikant tells me, when he and co-founder Babak Nivi started VentureHacks a few years ago, their goal was to educate companies on how to negotiate venture term sheets. In fact, Wilson Sonsini will close financings for startups using Docs for their seed rounds but you must become a client of the firms.

Term Sheet 70

Term Sheet San Francisco Technical Review Seed Stage 70

Up and Running

SEPTEMBER 20, 2021

The use of a cap table for a company comes into play when it has to track the total amount of shares, the value of shares, and the equity ownership of all the shareholders. The data of the company, such as debt and the company’s equity ownership, is laid out with the help of a cap table. Convertible notes. Example of a cap table.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

www.payne.org

SEPTEMBER 22, 2011

Startup Equity For Employees. 4 Vesting. 6 Founders / Restricted Stock. 7 Salary vs Equity. The re-heating of the venture funded tech market has pushed a heat up of the hiring market, and Im getting more calls from friends asking for help understanding startup stock (equity) offers. From Payne.org Wiki. References.

Equity 56

Equity Employee Vesting Preferred Stock 56

Austin Startup

AUGUST 20, 2017

They’re looking to be paid properly in the context of the overall salary structure, including cash, benefits, and equity, and to be paid commensurate with performance. Set any vesting schedules and expiration dates on roughly similar terms, if for no other reason just so you can track all of them correctly. How about your Investors ?

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

Up and Running

AUGUST 10, 2016

Prior to this, if you were an entrepreneur, your options for financing came down to your own personal savings, credit cards, banks (if you qualified), and angels or VCs (if you were one of the lucky few). They are based out of Houston, Texas, and the founders have a proven track record (and clearly a large following).

Securities and Exchange Commission 60

Securities and Exchange Commission Vesting Equity Houston 60

K9 Ventures

NOVEMBER 21, 2011

Let’s say you’re the founder (I use a solo-founder in my example to keep things simple, but this could just as well apply to a founding team) of a startup called Blood, Sweat and Tears, Inc. The objective is really to be able to get some risk off the table for the founders and not leave all their eggs in one basket.

Founder 87

Founder Common Stock Preferred Stock Stock 87

K9 Ventures

NOVEMBER 21, 2011

Let’s say you’re the founder (I use a solo-founder in my example to keep things simple, but this could just as well apply to a founding team) of a startup called Blood, Sweat and Tears, Inc. The objective is really to be able to get some risk off the table for the founders and not leave all their eggs in one basket.

Founder 84

Founder Common Stock Preferred Stock Stock 84

blog.simeonov.com

FEBRUARY 22, 2010

Simeon, can you tell us how you structure ownership and control so you can fire your co-founders if necessary? The first part will dispel some myths, address the lifecycle of founder agreements and the key compensation and control parameters in them. Let’s start by dispelling some myths: There is a standard founder agreement.

Founder 44

Founder Vesting Agile Startup 44

Gust

NOVEMBER 4, 2011

Entrepreneurs and investors who have spent any time dealing with convertible debt seed financing transactions are likely to have encountered the subject of valuation caps. The cap is irrelevant if the next equity financing is at a valuation below the cap amount.) was spun out, and the valuation was set by that financing round.

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

www.copelandfirm.com

OCTOBER 21, 2010

Home About Fee Arrangements Location Referrals Testimonials Business Law HUB Certification Mergers & Acquisitions Startup Advice Intellectual Property Copyrights Trademarks Securities Law Debt and Bridge Financing Series A Startup Law Entity Formation Corporation LLC Series LLC RSS Founders Shares: How do you split them up?

Intellectual Property 40

Intellectual Property Founder Vesting Bridge Financing 40

venturehacks.com

MARCH 21, 2008

The options typically vest monthly over 1-2 years with 100% single-trigger acceleration and no cliff. Although the advisor is on a vesting schedule, you should expect them to add most of their value up-front—that’s normal. Finally, there is a beauty to paying in equity rather than an equivalent amount of cash.

Advisory Board 44

Advisory Board Cap Table Vesting Equity 44

www.chubbybrain.com

SEPTEMBER 28, 2011

Go vest yourself. When a co-founder walks out of a company — as was the case for me — you’ve already been dealt a heavy blow. Don’t exacerbate the issue by needing to figure out how to deal with a large equity deadweight on your hands (investors won’t like that the #2 stakeholder is absent, even estranged, from your company).

Software Review 79

Software Review Startup Technical Review Vesting 79

Gust

DECEMBER 8, 2011

Likewise, founders can benefit from understanding basic characteristics of the overall legal structure, formation and governance documents, rights and responsibilities of team members, etc. Stepping off the soapbox, let’s examine the highest level “To Do” list for a new startup: Formation, Governance and Equity. Newco, Inc.”)

Intellectual Property 139

Intellectual Property Non-disclosure Agreement Delaware Stock 139

Tim Keane

JANUARY 12, 2010

The investors and the entrepreneurs are – or should be – aware that the price of the company’s equity is set by the market – in simplest terms, what an informed buyer is willing to pay. For angel groups, the distinction between groups and VCs on this issue is dwindling, especially as angel groups do bigger rounds of financing.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Gust

SEPTEMBER 17, 2014

It’s like we need a finance 101 course for entrepreneurs. In finance they call it “terminal value” but the truth is the price is as arbitrary at your A round as it is at your seed round. I know how to structure around that to protect the founders from getting screwed on a multiple liquidation preference. There were no metrics.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153