Startup Professionals Musings

MAY 22, 2020

Most founders like to talk about their many months or years of sweat-equity , but cash invested is a stronger commitment. Calculate employee stock option values and vesting times, as well as salary. When did this effort really start, including pivots?

Technical Review 436

Technical Review Due Diligence Sweat Equity Burn Rate 436

SoCal CTO

JANUARY 18, 2011

During that time one of the founders had mentioned that for the initial agreed time (3 months, equivalent dollars could be translated to 2% of equity but no agreement was reached at that time). I tried to argue that the equity should be what it was at the time I joined and discussed but there was no formal agreement at that time.

CTO 150

CTO CTO Hire Equity Vesting 150

Startup Professionals Musings

FEBRUARY 18, 2023

Most founders like to talk about their many months or years of sweat-equity , but cash invested is a stronger commitment. Calculate employee stock option values and vesting times, as well as salary. When did this effort really start, including pivots?

Sweat Equity 207

Sweat Equity Burn Rate Technical Review Intellectual Property 207

Up and Running

DECEMBER 1, 2015

Of course, not every equity compensation story is a David Choe Story. 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. In this article, I’m going to examine: What equity compensation is. Different types of equity compensation.

Equity 60

Equity Employee Stock Options Vesting 60

The Next Web

NOVEMBER 20, 2013

There are a lot of variables to go into calculating a fair equity split a startup team. Understand that not all of this will be granted day one, with everyone having higher stakes in the short run, but you will have an equity cushion to play with as the employee base scales. Is this person taking a salary or not?

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Cofounder Equity Founder Seed Stage 136

Startup Professionals Musings

AUGUST 4, 2014

The first question I usually get is what percent of the company or equity is that person worth? Giving a co-founder a salary won’t get you the “fire in the belly” you want. Just because it was your idea doesn’t mean you “deserve” 90 percent of the equity. Amount of venture funding provided.

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Cofounder Stock Founder Technical Cofounder 261

VC Adventure

AUGUST 16, 2020

I’ve sometimes seen companies make offers with a range of salary and options – making explicit the trade-off they are offering between cash compensation and options. Both of those things are not good for your business, so while it’s ok to offer some level of cash/equity trade-off, it shouldn’t be over-done.

Programming 149

Programming Vesting Equity Software Review 149

Startup Professionals Musings

SEPTEMBER 25, 2019

By the way, you will normally only be offered “options,” which vest over a 4-year period after a 1-year “cliff.” It never hurts to ask in a job interview what stock options are available, and don’t fall for the offer which promises to “work out the equity terms later.” Advisory Board Member, 1% Senior Engineer,3 -.7%

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Equity Stock Options Advisory Board Stock 237

Startup Professionals Musings

JULY 1, 2022

By the way, you will normally only be offered “options,” which vest over a 4-year period after a 1-year “cliff.” It never hurts to ask in a job interview what stock options are available, and don’t fall for the offer which promises to “work out the equity terms later.” Advisory Board Member, 1% Senior Engineer,3 -.7%

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Stock Options Advisory Board Stock Startup 343

Feld Thoughts

SEPTEMBER 2, 2011

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. Equity is split 55% and 45%, but where is that officially recorded? Time to update the cap table.

Cap Table 133

Cap Table CTO Hire Technical Cofounder Cofounder 133

View from Seed

DECEMBER 4, 2014

Editor’s note: Understanding how to divide founder equity at a startup can be tricky, even to the point of reaching emotional riffs between founders. Below, Lee Hower offers advice for approaching these equity discussions objectively and properly. Sometimes co-founders put off the equity split question for some time.

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Equity Founder Sweat Equity Cofounder 315

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

Agile VC

DECEMBER 4, 2014

As a result, one of the trickier things co-founders tackle is determining the equity split amongst the founding group of individuals. Across both the startups I’ve personally been involved in (PayPal and LinkedIn) and the startups in which I’ve been an investor, I’ve seen a broad range of co-founder equity splits.

Cofounder 255

Cofounder Equity Founder Sweat Equity 255

Steve Blank

MAY 19, 2015

retaining their existing hires who were working for intern-like salaries with little equity. Originally they had been attracted by the lure of being part of a new media company that was disrupting the old, and were working for low salaries with minimal stock. Upgrade their salaries and equity ASAP.

Technical Review 120

Technical Review Salary Early Stage Software Review 120

www.mattbartus.com

SEPTEMBER 24, 2011

Equity for Consultants – Keep it Simple! posted Feb 3 in Equity , People issues. 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.” The most you lose is 1 or 2 months of vesting on the stock. Blog blog archive. Quora Answers.

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

Startup Professionals Musings

APRIL 10, 2016

Most founders like to talk about their many months or years of sweat-equity , but cash invested is a stronger commitment. Calculate employee stock option values and vesting times, as well as salary. When did this effort really start, including pivots?

Sweat Equity 120

Sweat Equity Burn Rate Technical Review Intellectual Property 120

Agile VC

DECEMBER 4, 2014

As a result, one of the trickier things co-founders tackle is determining the equity split amongst the founding group of individuals. Across both the startups I’ve personally been involved in (PayPal and LinkedIn) and the startups in which I’ve been an investor, I’ve seen a broad range of co-founder equity splits.

Cofounder 173

Cofounder Equity Founder Sweat Equity 173

Startup Professionals Musings

APRIL 8, 2015

Most founders like to talk about their many months or years of sweat-equity , but cash invested is a stronger commitment. Calculate employee stock option values and vesting times, as well as salary. When did this effort really start, including pivots?

Technical Review 120

Technical Review Due Diligence Sweat Equity Burn Rate 120

David Teten

MAY 7, 2019

Would you like to have a salary from day one that you work full-time on your startup? We agree on an equity split, vesting, and initial compensation structure. And how do you split the equity? Do you want to make America functional again ? Are you thinking of applying to Y Combinator without an idea? This work is unpaid.

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America Technical Review Advisory Board Due Diligence 60

Startup Professionals Musings

JULY 24, 2011

By the way, you will normally only be offered “options,” which vest over a 4-year period after a 1-year “cliff.” It never hurts to ask in a job interview what stock options are available, and don’t accept an offer which promises to “work out the equity terms later.” Your compensation is the total package, stock plus salary.

Equity 234

Equity Advisory Board Stock Options Stock 234

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. 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.

Equity 41

Equity Employee Startup Vesting 41

David Teten

JULY 10, 2019

pre-launch, BIG equity, big peeps involved–ANY TIPS?? Would you like to have a salary from day one that you work full-time on your startup? We agree on an equity split, vesting, and initial compensation structure. And how do you split the equity? Do you want to make America functional again ?

America 60

America Technical Review Advisory Board Due Diligence 60

Andrew Payne

SEPTEMBER 9, 2017

I’ve probably had a thousand or more discussions about startup equity: figuring out how much to offer, negotiating, or advising others. In practice, most equity grants within a company are driven by broad calibrations with existing employees. For example, if four co-founders agree to equal equity, they each own 25% at the very outset.

Equity 71

Equity Founder Vesting Dilution 71

Startup Professionals Musings

OCTOBER 21, 2017

By the way, you will normally only be offered “options,” which vest over a 4-year period after a 1-year “cliff.” It never hurts to ask in a job interview what stock options are available, and don’t fall for the offer which promises to “work out the equity terms later.” Advisory Board Member, 1% Senior Engineer,3 -.7%

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Stock Stock Options Advisory Board Startup 140

David Teten

SEPTEMBER 2, 2017

It’s hard enough to get a job at a venture capital or private equity firm; it’s even more complex to join as a Partner. Also see Preqin’s Key Due Diligence Considerations for Private Equity Investors. . VC and private equity are very illiquid on both the investing and the personnel side. – Share and vesting of Carry.

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Private Equity Venture Capital Equity Partner 60

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

Startup Professionals Musings

OCTOBER 17, 2013

By the way, you will normally only be offered “options,” which vest over a 4-year period after a 1-year “cliff.” It never hurts to ask in a job interview what stock options are available, and don’t fall for the offer which promises to “work out the equity terms later.”

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Stock Options Stock Advisory Board Startup 224

Both Sides of the Table

MAY 9, 2011

Give them a large sum of equity. Vested over 4 years. They don’t want the risk of the first 3-6 months with no salary and having to walk around with a tin-cup for funding. If you do decide to go down the 50/50 route, please at least consider: Make sure you have founder vesting for both of you. Hire your co-founder.

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Cofounder Founder Vesting Founder Vesting 393

www.payne.org

SEPTEMBER 22, 2011

Startup Equity For Employees. 4 Vesting. 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. 2 Stock Classes: Common and Preferred.

Equity 56

Equity Employee Vesting Preferred Stock 56

YoungUpstarts

JANUARY 9, 2014

This insurance protects profits, taxes and salaries that need to be accounted for whilst you are unable to remain actively involved in your business. Vest your Equity over time. With this in mind, it is worthwhile vesting your equity over time rather than attaining your shares all at once.

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Vesting Entrepreneur Cofounder Equity 160

Hunter Walker

JANUARY 10, 2018

Even though your equity is unlikely to make you rich , there are plenty examples of when it does to extraordinary levels. That salary never came back. Don’t assume everyone can just eat ramen and sleep on vesting options. And it doesn’t always end up in the hands of diverse, hardest working or ethical people.

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Silicon Valley San Francisco Vesting .Net 195

Startup Professionals Musings

SEPTEMBER 22, 2012

By the way, you will normally only be offered “options,” which vest over a 4-year period after a 1-year “cliff.” It never hurts to ask in a job interview what stock options are available, and don’t fall for the offer which promises to “work out the equity terms later.”

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Stock Options Stock Advisory Board Startup 230

Hunter Walker

DECEMBER 18, 2015

In no particular order: Startup Equity Is Unlikely to Make You Fabulously Wealthy After Four Years Unless One or More of the Following Apply… You were a founder. Even in successful companies, most initial equity grants will be worth a few hundred thousand dollars to perhaps $1-2m, when fully vested. Assume you get.25%

Equity 48

Equity Employee IPO Vesting 48

Startup Professionals Musings

MARCH 29, 2015

By the way, you will normally only be offered “options,” which vest over a 4-year period after a 1-year “cliff.” It never hurts to ask in a job interview what stock options are available, and don’t fall for the offer which promises to “work out the equity terms later.” Advisory Board Member, 1% Senior Engineer,3 -.7%

Stock Options 120

Stock Options Stock Advisory Board Startup 120

grasshopper.com

SEPTEMBER 24, 2011

Getting Paid in Equity: A What to Do Guide. Equity-based pay is often used by the founders of young start-ups who want to grow their businesses but cannot offer big salaries to qualified professionals. Below are some helpful tips and suggestions to keep in mind when contemplating whether or not to take an equity-based position.

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Equity Vesting Sweat Equity Salary 41

Genuine VC

FEBRUARY 28, 2011

This post doesn’t going into general tactical approaches of job offer negotiation, but rather focuses on the fact that with startups a significant part of compensation is related to equity or options. So optimizing a startup offer involves not just one key figure – salary – but also the option package. Early-Stage.

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Startup Equity Vesting Salary 121

Up and Running

JANUARY 23, 2013

If the value of the education does not exceed the value of the salary you’re getting, you’re doing something wrong, or you’re in the wrong company.6. Working for all equity or all cash is not likely the right answer. Learn the basics of things like shares, options, vesting schedules, dilution and taxes. Be informed.

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Vesting Dilution Startup Salary 113