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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. The first few people into a startup are on a spectrum of founder vs. early employee. Early Employee Equity is an Art I somewhat agree with Fred Wilson in Employee Equity: How Much?

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2022 Predictions

Eric Friedman

4/ Streaming equity – venture funds + employee stock becomes more liquid. 7/ SaaS roll-ups and micro-private equity become huge. Funds and people are looking to take a set multiple on SaaS companies and provide liquidity to founders and VCs and run the underlying companies for profit with their own infrastructure.

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Option Pools and VC Negotiations

Rob Go

In my last post about raising seed vs. jumping straight to A, I received a good comment from Chris Woods that my analysis neglected to include the impact of option pools that are created at each financing round. Essentially, the new investor wants there to be a certain % of options available to employees after they invest.

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Should You Share Equity with Consultants?

www.inc.com

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. Parker found that equity as compensation helped build loyalty to his company -- even among consultants. But sharing equity can have pitfalls, too.

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Beware of Premature Merge Elation

Both Sides of the Table

I can save tons of development time and I think I can buy it for all equity. Often senior people from one company are given senior titles at the other. We said it was like two people who couldn’t swim across the English Channel (21 miles) putting their arms around each other and trying to swim across together.

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Changing Equity Structures for Early Startup Employees

www.instigatorblog.com

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. 1% but they’re not going to be overwhelmed by it, or insanely incentivized by that equity alone. I do believe that early employees should trade salary for equity.

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Entrepreneurs: Your instincts are always better than bad advice

The Next Web

In many cases we have observed, the founders have given away too much equity to their first investors — typically angels and family offices, who have little experience with fast-growing startups or the venture capital funding model. Of course, not all of the fault in these lopsided structures lies with the angel investors.

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