Startup Professionals Musings

APRIL 11, 2021

Although every startup is unique, there are certain common avoidable mistakes that can lead to legal complications which jeopardize the long-term success of the business. Here are five of the most common examples: Failure to document a Founder agreement at the beginning. Trouble with the IRS over Founders stock value.

Cost 363

Cost Non-Compete Accredited Investor Cofounder 363

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. Good idea, I think this will benefit lots of startups and some angels. This is all built into a typical founder stock purchase agreement. Blog Archives.

Finance 40

Finance Term Sheet Vesting LLC 40

www.startuplessonslearned.com

MAY 4, 2012

Founders Dilemmas: Equity Splits. The following is an excerpt from HBS Professor Noam Wasserman’s new book, The Founders Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup. On average, the founders who keep the most control over their company make the least amount of money. Lessons Learned.

Equity 72

Equity Founder Technical Cofounder Cofounder 72

Steve Blank

JUNE 15, 2010

The role of a founding CEO in a startup searching for a business model is radically different than a CEO building and growing a company. So if you’re the founder of a startup, you may want to consider who you take money from. Is Your VC Founder Friendly? What startup stage do they typically invest in?

Founder 231

Founder Vesting Later Stage Early Stage 231

Startup Professionals Musings

AUGUST 7, 2013

Although every startup is unique, there are certain common avoidable mistakes that can lead to legal complications which jeopardize the long-term success of the business. Here are five of the most common examples: Failure to document a Founder agreement at the beginning. Trouble with the IRS over Founders stock value.

Non-Compete 235

Non-Compete Accredited Investor Startup Cofounder 235

Startup Professionals Musings

JULY 10, 2012

Although every startup is unique, there are certain common avoidable mistakes that can lead to legal complications which jeopardize the long-term success of the business. Here are five of the most common examples: Failure to document a Founder agreement at the beginning. Trouble with the IRS over Founders stock value.

Non-Compete 249

Non-Compete Accredited Investor Cofounder Startup 249

Up and Running

DECEMBER 1, 2015

Stock options are issued to employees usually through an Employee Stock Option Plan (ESOP) and include what is called a “vesting period.” The vesting period, often three or four years, frees up a percentage of the options for the employee to purchase the longer they stay at the company. Restricted stock: .

Equity 60

Equity Employee Stock Options Vesting 60

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’s equity is a headline-grabbing example of “dead equity”: equity owned by people who are no longer actively working for the startup. Noam Wasserman on Inc.

Equity 44

Equity Vesting Cap Table Technical Review 44

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. — Unremarked and unheralded, the balance of power between startup CEOs and their investors has radically changed: IPOs/M&A without a profit (or at times revenue) have become the norm. .

Founder 245

Founder Technical Review CTO Hire IPO 245

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

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 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

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’s equity is a headline-grabbing example of “dead equity”: equity owned by people who are no longer actively working for the startup. Noam Wasserman on Inc.

Equity 28

Equity Vesting Cap Table Technical Review 28

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.

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

www.instigatorblog.com

OCTOBER 23, 2010

Home About Contact My thoughts & lessons learned on startups, entrepreneurship, marketing and other stuff. 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. the better the startup will be. 1% is just not a lot.

Equity 41

Equity Employee Startup Vesting 41

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.avc.com

SEPTEMBER 22, 2011

To be clear, these are hires we are talking about, not co-founders. Co-founders are an entirely different discussion and I am not talking about them in this post. This "best value" can be the valuation on the last round of financing. Or it can be a recent offer to buy your company that you turned down.

Equity 64

Equity Employee CTO Hire Fractional CTO 64

Startup Professionals Musings

MAY 2, 2011

Although every startup is unique, there are certain common avoidable mistakes that can lead to legal complications which jeopardize the long-term success of the business. Here are five of the most common examples: Failure to document a founder agreement at the beginning. Trouble with the IRS over founders stock value.

Non-Compete 246

Non-Compete Accredited Investor Entrepreneur Cofounder 246

Austin Startup

AUGUST 20, 2017

August 20, 2017: This is another in my series of posts all leading up to a book on Startup Decision Making. One of the most common mistakes I see in startups is making decisions that lose sight of the context , including the past, present, and future. Sooner or later everybody in a startup knows what everyone else is getting paid.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

Tim Keane

JANUARY 12, 2010

Startups and angels: Along the way to success. For angel groups, the distinction between groups and VCs on this issue is dwindling, especially as angel groups do bigger rounds of financing.   Note that this applies only to earl stage Series A-type equity financings and assumes no cash dividends are paid to investors.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

blog.simeonov.com

FEBRUARY 22, 2010

I have been thinking a lot recently about how to apply agile development principles to investing and key aspects of startup development such as team building. The first post is about agile startup fundraising. The follow-on post is about agile startup team building. All founders have the same agreement. Urban legends.

Founder 44

Founder Vesting Agile Startup 44

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

www.inc.com

SEPTEMBER 24, 2011

Finance | Tuesdays. Advisor. ); STARTUP. Financing a Small Business. Financing A Small Business. Personal Finance. Before Roving Software could receive its first round of financing from professional investors, in early 1999, he had to put all the stock arrangements in writing. Innovation | Fridays.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

Startup Professionals Musings

APRIL 19, 2010

Although every startup is unique, there are certain common avoidable mistakes that can lead to legal complications which jeopardize the long-term success of the business. Here are some examples: Failure to document a founder agreement at the beginning. This shortcut can lead to the so-called “forgotten founder” problem.

Non-Compete 125

Non-Compete Accredited Investor Startup Cofounder 125

The Startup Magazine

AUGUST 11, 2017

Here at The Startup Magazine , we don’t typically “do” press releases, but occasionally an item comes to us that warrants including it in the magazine. Joe Zhu is a quick study with a natural desire to offer assistance anytime, anywhere startups face marketing, operational, and financing challenges.

Illinois 77

Illinois Chicago Entrepreneur Cofounder 77

Up and Running

MAY 3, 2012

This cheerleading often comes from those with vested interests, rather than from successful entrepreneurs who have successfully exited businesses and are looking to encourage the next generation. We should remind them that, as Steve Blank said, “a startup is an organization formed to search for a repeatable and scalable business model.”

Entrepreneur 82

Entrepreneur Technical Review Silicon Valley Lean 82

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

ReadWriteStart

SEPTEMBER 10, 2010

There are several factors that should be considered when finding the right VCs for your startup, and Atlas Venture partner Fred Destin reminds us this morning of another significant one - how a VC manages reserves. There are a lot of reasons why follow-on financings might happen when they shouldn't," says Go. What are reserves?

Management 115

Management Vesting Angel Investor Startup 115

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.) Read on for a fuller explanation.

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

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). Here are the questions I like to see founders ask potential advisors; 1. Vesting Schedules. Advisors typically ask to vest in equal installments over 48 months. Typically these folks get between .01-.25%

Equity 98

Equity Vesting Cap Table Common Stock 98

www.payne.org

SEPTEMBER 22, 2011

Startup Equity For Employees. 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. From Payne.org Wiki. 3 Dilution. 5 Stock vs Options.

Equity 56

Equity Employee Vesting Preferred Stock 56

Up and Running

AUGUST 10, 2016

For the first time in 80 years, startups and small businesses can raise up to $1M from their friends, family, and customers via online websites registered with the Securities and Exchange Commission. 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

thestartuplawyer.com

FEBRUARY 24, 2010

Contact The Startup Lawyer: Home Page About Contact FAQs Glossary Ryan Roberts Law: Home Page Social Networks: Facebook Twitter LinkedIn Flickr Delicious Digg Last.FM 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.

Cofounder 40

Cofounder Founder Preferred Stock Startup 40

Gust

DECEMBER 8, 2011

In Part I , I gave a quick summary of the who, when and why of forming and documenting a new startup company. This week we’ll delve into what , exactly, is necessary or desirable to lay a solid legal foundation for a startup to build upon. Pick a name for the new legal entity (e.g., Newco, Inc.”)

Intellectual Property 139

Intellectual Property Non-disclosure Agreement Delaware Stock 139

The Next Web

OCTOBER 7, 2013

That’s what a couple of my friends – engineers at Google and Bloomberg who have been following the rise of startup culture with intrigue – told me recently. 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.

Engineer 129

Engineer Dilution Option Pool Vesting 129