www.informationarbitrage.com

FEBRUARY 24, 2010

Main February 23, 2010 Advice for CTO Founders: Dont Let Business Kill the Business Founding a technology company is an amazing thing. Too often, however, I have found CTO / Founders paired with business people who not only don't add value, but frequently detract from the value of the business. So my advice to CTO / Founders?

CTO Hire 40

CTO Hire Founder Cap Table Vesting 40

Steve Blank

OCTOBER 24, 2017

Why do these founders get to stay around? Because the balance of power has dramatically shifted from investors to founders. VCs competing for unicorn investments have given founders control of the board. Hire a CEO to Go Public. A pre-IPO board usually had two founders, two VCs and one “independent” member.

Founder 245

Founder Technical Review CTO Hire IPO 245

www.avc.com

SEPTEMBER 22, 2011

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. For your first key hires, three, five, maybe as much as ten, you will probably not be able to use any kind of formula. First, a caveat. Let's say the number is $25mm.

Equity 64

Equity Employee CTO Hire Fractional CTO 64

Altgate

AUGUST 25, 2012

. —————– Dead equity — equity held by employees and founders no longer working at the company — is a large and growing problem. One who attracted much attention is David Choe, the graffiti artist hired to paint the company’s first headquarters. They fail to include vesting terms (i.e.,

Equity 28

Equity Vesting Cap Table Technical Review 28

Startup Professionals Musings

AUGUST 7, 2013

Here are five of the most common examples: Failure to document a Founder agreement at the beginning. This oversight can lead to the so-called “forgotten Founder” problem. Later, when your venture is trying to close on financing, or even going public, that forgotten partner surfaces, demanding their original share.

Non-Compete 235

Non-Compete Accredited Investor Startup Cofounder 235

www.mattbartus.com

SEPTEMBER 24, 2011

Perspectives on issues affecting founders, startups and investors from a veteran startup lawyer in Silicon Valley. 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. Quora Answers.

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

Startup Professionals Musings

JULY 10, 2012

Here are five of the most common examples: Failure to document a Founder agreement at the beginning. This oversight can lead to the so-called “forgotten founder” problem. Later, when your venture is trying to close on financing, or even going public, that forgotten partner surfaces, demanding their original share.

Non-Compete 249

Non-Compete Accredited Investor Cofounder Startup 249

Austin Startup

AUGUST 20, 2017

Hiring is a chapter unto itself, but it deserves to lead off any discussion of context. Compensation decisions obviously affect hiring and retention. You can’t be too careful in determining comp packages for your new hires. Messy cap tables can come back to haunt you when you do a financing or sell the company.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

www.inc.com

SEPTEMBER 24, 2011

Finance | Tuesdays. Financing a Small Business. Financing A Small Business. Personal Finance. Back in 1997, Randy Parker was staring at a blank whiteboard, wondering where hed find the money to hire the employees and consultants he needed to build his new product. "We Start-up | Mondays. Technology | Thursdays.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

Startup Professionals Musings

MAY 2, 2011

Here are five of the most common examples: Failure to document a founder agreement at the beginning. This oversight can lead to the so-called “forgotten founder” problem. Early co-founders often drop out of the picture due to disagreements, and you forget about them, but they don’t forget about the verbal promises you made.

Non-Compete 246

Non-Compete Accredited Investor Entrepreneur Cofounder 246

www.instigatorblog.com

OCTOBER 23, 2010

I gave him similar numbers to what I had been given when I was hiring the first few employees for Standout Jobs. David Crow just posted about this very topic: Founders vs. Early Employees and shows the Venture Hacks chart. .&# And I told him that the numbers were fairly standard, based on guidelines I had seen used in other places.

Equity 41

Equity Employee Startup Vesting 41

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

Eric Friedman

JUNE 27, 2016

This is the classic “hire people smarter than you” which is harder said than done. 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). Here are the questions I like to see founders ask potential advisors; 1. Vesting Schedules. Advisor 2 = 0.25%.

Equity 98

Equity Vesting Cap Table Common Stock 98

Both Sides of the Table

JULY 19, 2015

I felt this myself as we went from a few founders huddled into a tiny room to the front page of the Financial Times, an influx of VC interest, magazine covers, invitations to high-profile events and the pressures of trying to live up to this perception and the economic opportunities everybody expected. Every founder knows this.

Houston 150

Houston Vesting Founder Capital Call 150

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

Startup Professionals Musings

APRIL 19, 2010

Here are some examples: Failure to document a founder agreement at the beginning. This shortcut can lead to the so-called “forgotten founder” problem. Early co-founders often drop out of the picture due to disagreements, and you forget about them, but they don’t forget about the verbal promises you made.

Non-Compete 125

Non-Compete Accredited Investor Startup Cofounder 125

techcrunch.com

FEBRUARY 25, 2010

This is probably why investors’ case for a company to sell early f ocuses exclusively on the founder : in most early-stage acquisitions, the liquidation preferences and deal-sweeteners only work for investors and founders. The elephant in the room is that that founders and CEOs take almost all of it for themselves.

Liquidation Preference 63

Liquidation Preference Founder Option Pool Acquisition 63

ithacaVC

DECEMBER 13, 2013

They are typically pretty simple: (i) shares owned by founders and (ii) shares authorized for issuance in a stock option pool, some of which may be issued to employees already and some of which will be available for future issuance. If no additional equity is ever granted to Founder X and Founder Y, then Founder Y will ALWAYS own 1.63

Cap Table 67

Cap Table Pre-Money Valuation Option Pool Liquidation Preference 67

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

ithacaVC

JUNE 20, 2011

Setting up a legal entity that will have multiple owners from inception (like 2 or more founders) requires good lawyer input. Setting up a legal entity that will have multiple owners from inception (like 2 or more founders) requires good lawyer input. Lawyer time required (including vesting agreements for founders): 3 to 6 hours.

Stock Options 58

Stock Options Vesting Subscription Agreement Founder Vesting 58

www.payne.org

SEPTEMBER 22, 2011

4 Vesting. 6 Founders / Restricted Stock. 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. Vesting is usually linear: 25% vested after 1 year, 50% after two, 75% after three, etc.

Equity 56

Equity Employee Vesting Preferred Stock 56

thestartuplawyer.com

FEBRUARY 24, 2010

He obviously never launched a startup and got shafted by a co-founder. He obviously never launched a startup and got shafted by a co-founder. He obviously never launched a startup and got shafted by a co-founder. You can start by examining every aspect of the co-founder relationship.

Cofounder 40

Cofounder Founder Preferred Stock Startup 40

Both Sides of the Table

JULY 27, 2013

My internal compass says that “country-club” entrepreneurs struggle to make as big of an impact because it’s really hard to totally change a system that you’re part of and have a vested interest in. and if you haven’t seen 20 Feet From Stardom , which this founder talks about in his letter to Seth, you must.

Churn Rate 371

Churn Rate Vesting Viral eCommerce 371

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

The Next Web

JUNE 15, 2012

From Silicon Valley to Peoria, Illinois, cash-strapped startups look for inventive way to finance their business – often handing out equity to employees, consultants, vendors, and other service providers. In most cases, you’ll only be losing a few months of vesting on the stock. It’s a logical solution. Pitfalls in sharing equity.

Equity 116

Equity Stock Options Vesting Stock 116

www.paulgraham.com

OCTOBER 23, 2010

Single Founder Have you ever noticed how few successful startups were founded byjust one person? Even companies you think of as having one founder,like Oracle, usually turn out to have more. Whats wrong with having one founder? It probably means the founder couldnt talk anyof his friends into starting the company with him.

Startup 108

Startup Software Review Hiring Detroit 108

The Startup Lawyer

MARCH 11, 2010

A variety of model startup seed funding docs have been released in the past year or so: TechStars Series AA Preferred , YCombinator Series AA Preferred , and TheFunded Founder Institute’s Plain Preferred. If you believe lawyers are simply document gatekeepers, you are missing the entire reason for hiring a lawyer — counsel.

Delaware 49

Delaware Hockey Stick Preferred Stock Open Source 49

The Startup Lawyer

MARCH 11, 2010

A variety of model startup seed funding docs have been released in the past year or so: TechStars Series AA Preferred , YCombinator Series AA Preferred , and TheFunded Founder Institute’s Plain Preferred. If you believe lawyers are simply document gatekeepers, you are missing the entire reason for hiring a lawyer — counsel.

Delaware 45

Delaware Hockey Stick Preferred Stock Open Source 45

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? The real question here is: why is it fair for founders to get so much more?

Equity 40

Equity Employee Founder Cofounder 40

David Teten

DECEMBER 3, 2019

Tim Friedman, Founder, PE Stack , said, “If I could offer one piece of advice to today’s managers, it would be to take the time to understand the demands of the modern institutional LP. Russell Rothstein, Founder and CEO, IT Central Station , a product review site, said, “We see VCs on our site very often. 3) Raise capital.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

www.chubbybrain.com

SEPTEMBER 28, 2011

Post-Mortem Title : My eHarmony for Hiring Failure. 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. So, the best way of dealing with this issue is to take a long, long vesting period for all major sweat equity founders.

Software Review 79

Software Review Startup Technical Review Vesting 79

maplebutter.com

JANUARY 8, 2013

You are here: Home » Hiring » Crazy! Written By Dan Martell on February 2nd, 2012 | Category: Hiring LeanStartup Marketing Metrics Startup Life | 6 Comments. Whats is the best way to find a co-founder for your startup? Ability to hire top talent (A+ talent). you can hire for those. Maple Butter.

Technical Review 44

Technical Review Startup Cofounder Software Review 44

Up and Running

SEPTEMBER 20, 2021

This can be helpful when you are hiring a COO for the company, and the candidate asks to get percentage ownership in the company. Founders can apply the information to instantly ascertain what percentage of the startup they have to propose a new investor. Example of a cap table. percent, and then the investors at 20 percent.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

venturehacks.com

MARCH 21, 2008

Advisor compensation Whether you’re hiring a normal advisor or super advisor: Advisory shares are usually issued as common stock options. The options typically vest monthly over 1-2 years with 100% single-trigger acceleration and no cliff. Does this stake need to have vesting schedule? Our Book Check out the free samples.

Advisory Board 44

Advisory Board Cap Table Vesting Equity 44

venturehacks.com

OCTOBER 21, 2010

Use a hiring plan to justify a small option pool, increase your share price, and increase your effective valuation. Reading on, the term sheet states, “The $8 million pre-money valuation includes an option pool equal to 20% of the post-financing fully diluted capitalization.&# Solution: Use a hiring plan to size the option pool.

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68

Austin Startup

MAY 17, 2017

Instead, the company just has a loose set of individual advisors they work with on strategic matters, often in exchange for equity with a vesting schedule. The Board of Directors, however, is the most powerful group of people in the Company , with the ability to hire and fire senior executives and approve (or block) key transactions.

Seed Stage 48

Seed Stage Startup Cap Table Angel Investor 48

The Next Web

DECEMBER 29, 2013

Startups will start hiring experienced storytellers who will help propel their brands to new heights through a combination of thought leadership, social media prowess and wordsmithing. Founders, executives and decision makers don’t have time to consistently create quality content and then properly distribute it. Expert Storytellers.

Social Media 164

Social Media Vesting Distribution 164