Pascal's View

JULY 9, 2017

When it comes time to convert the notes, these entrepreneurs face ‘sticker shock’ about their post-financing ownership. That’s only one result of mismanaged expectations dating back to when the notes were issued!

Post-Money Valuation 49

Post-Money Valuation Valuation Cap Table Covenant 49

Up and Running

SEPTEMBER 20, 2021

And as the company grows, it brings on new people and may decide to issue stock options to attract new staff and funding from investors. A cap table will help you in the strategic management of business decisions. Here you can see that the founders own most of the shares at 67.7%, then the ESOP (employee stock option pool) at 12.31

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

www.inc.com

SEPTEMBER 24, 2011

Finance | Tuesdays. Leadership & Managing | Tuesdays. Financing a Small Business. Financing A Small Business. Personal Finance. LEADERSHIP & MANAGING. LEADERSHIP & MANAGING. Managing Creativity. Durkin , managing partner with the Boston -based law firm Lucash, Gesmer & Updegrove LLP.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

ithacaVC

SEPTEMBER 4, 2011

Here is the latest edition of Finance Fridays from Brad Feld called “Introducing the Cap Table and CTO” Every startup needs someone to be in charge of the Cap Table. That person is typically the inside finance person, but it does not really matter who so long is it is always current.

Cap Table 49

Cap Table Finance Option Pool Warrant 49

Tim Keane

JANUARY 12, 2010

Good investors use the valuation discussions to gauge the business savvy of the management team and to understand their ability to appreciate and deal with economic market forces that set values.   For individual angels and others investing their own money, this may be more fluid than for someone with responsibility for a managed fund.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

venturehacks.com

FEBRUARY 24, 2010

but it’s manageable. Two founders works because unanimity is possible, there are no founder politics, interests can easily align, and founder stakes are high post-financing. In three founder companies, the politics can be tough — gang-up votes, jockeying for board seats, etc. — Build in founder vesting (a.k.a. Learn more.

Cofounder 101

Cofounder Founder Technical Cofounder Technical Review 101

Seeing Both Sides

JULY 15, 2009

VCs have an unfair advantage when it comes to financings. A typical start-up company will do 2-4 venture capital financings before a successful exit (or, conversely, an ignomious ending). In contrast, the typical venture capitalist, either individually or across their partnership, will do 5-10 financings in any given year.

Pre-Money Valuation 49

Pre-Money Valuation Option Pool Stock Options Post-Money Valuation 49

ithacaVC

JANUARY 24, 2013

Having a relatively small about of convertible debt on your balance sheet prior to your Series A financing is not a bad thing. Option pool: 500,000 shares (some issued, some reserved, but that is typically irrelevant as the whole pool is normally factored into the premoney share price calculation). 7692 per share.

Valuation 53

Valuation Balance Sheet Option Pool Dilution 53

Hunter Walker

MAY 7, 2014

I’m not looking for a binary “correct” or “incorrect” assessment, I’m trying to understand if the founders have considered the topic and how they intend to manage. A bloated org full of fancy titles and layers of management? That’s not healthy for a startup. Won’t work out well.

Hiring 108

Hiring Option Pool Early Stage Term Sheet 108

Professor VC

JANUARY 17, 2008

He then went on to say that this type of financing was good for the entrepreneur (vs taking VC money) because they got to keep more of the company. At a $1 million, pre-money, with an investment of $500K, that would leave 67% of the company for the founders and initial option pool.

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

www.instigatorblog.com

OCTOBER 23, 2010

You can’t have an option pool that takes up 50% of the company’s shares, and you have to leave room for future employees as well. Paul Graham offers up a formula for the equity challenge , which I think proves the fact that those first few employees deserve more. the better the startup will be.

Equity 41

Equity Employee Startup Vesting 41

www.payne.org

SEPTEMBER 22, 2011

Also, most companies try to keep all employees on the same terms, and there are good management reasons to do that. At a minimum, do your own personal finance homework so you know how much salary you need to live and not spend your savings. Some vesting plans may accelerate vesting for certain events, such as an acquisition.

Equity 56

Equity Employee Vesting Preferred Stock 56