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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. I've talked about this topic before in How Investors Think About Valuation of Pre-Revenue Startups.

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Remind Me Why I Love You? (Why “In Person” is Everything)

Both Sides of the Table

I also had to negotiate a follow-on round at a portfolio company because new investors were trying to force a bit option-pool top-up that would dilute the founders and existing shareholders and existing investors were fighting over prorata rights. Wednesday I have 4 companies coming in to talk about their companies. You’re in control.

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5 Tips for Raising a Venture Round

ReadWriteStart

While certainly not every business needs to raise venture financing, it is the path for many high-growth technology startups. As Steve Blank explained earlier this week on ReadWriteStart from research at The Startup Genome Project : One of the biggest surprises is that success isn't about size of team or funding.

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What is it Like to Negotiate a VC Round?

Both Sides of the Table

Over the years I’ve written extensively about the downsides of convertible notes for startups such as here , here and here. So how DOES a VC think about financings at early stages? How much is in the option pool? It’s worth reading his post to understand the problem. It’s very simple.

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Unintended Consequences: When SAFE and Convertible Notes Go Awry

Pascal's View

There is nothing wrong with using a SAFE or a convertible note in a startup if you know its implications. When it comes time to convert the notes, these entrepreneurs face ‘sticker shock’ about their post-financing ownership. Yes, and it’s a lot simpler than making your startup grow into a successful company. Sound simple?

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Term-sheets and Valuations: Thinking about Negotiations - Startups.

Tim Keane

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.

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Reblog – Finance Fridays (Introducing the Cap Table and CTO)

ithacaVC

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.