venturehacks.com

OCTOBER 21, 2010

SUPPORTED BY Products Archives @venturehacks Books AngelList About RSS The Option Pool Shuffle by Nivi on April 10th, 2007 “Follow the money card!&# – The Inside Man, Three-Card Shuffle Summary: Don’t let your investors determine the size of the option pool for you. Don’t lose this game. share to $1.00/share:

Option Pool 68

Option Pool Pre-Money Valuation Dilution Valuation 68

thinkspace.com

SEPTEMBER 7, 2012

How to Divide Equity to Startup Founders, Advisors, and Employees. The part that I’d like to zero in on is when you’ve got a high growth company what are some of the best practices out there to distribute equity to the founders, advisors, and employees? Equity for Founders. Strike price of options: meaningless.

Equity 62

Equity Employee Founder CTO Hire 62

Hunter Walker

AUGUST 7, 2017

But employee option pool is important enough that I wanted to briefly expand upon my comment above. While you should expect these sorts of hires to take below market cash comp versus what Google is paying them, this tradeoff needs to be replaced with equity upside.

Equity 94

Equity Pre-Money Valuation Option Pool Founder 94

Both Sides of the Table

AUGUST 3, 2010

years ago and told me, “I just got offered the chance to buy this company because the founder doesn’t want to continue. But to be clear the overwhelming majority of deals involve one company driving the cultural integration, establishment of uniform processes, hiring / firing decisions, etc. This is a good thing.

Merger 276

Merger Technical Review Early Stage Dilution 276

The Next Web

JUNE 15, 2012

It’s wise to create a stock options pool that includes all the employees and contractors you plan on hiring in the next 18 months and how many shares each might get. Many young tech startups reserve 15%-20% for employee stock options.

Equity 116

Equity Stock Options Vesting Stock 116

Hunter Walker

MAY 7, 2014

Whether it’s adding capacity to an existing function (#MawrEngineers) or bringing new talents onboard (“we intend to make our first marketing hire”), glossing over these bullet points towards the back of the pitch deck would be a mistake. I’m interested in not just what these people will be doing but how and when they’ll be hired.

Hiring 108

Hiring Option Pool Early Stage Term Sheet 108

Up and Running

SEPTEMBER 20, 2021

For instance, the cap table will help you with various possibilities while running business activities like available options and pre-money valuations faster. This can be helpful when you are hiring a COO for the company, and the candidate asks to get percentage ownership in the company. Example of a cap table.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

Both Sides of the Table

JUNE 5, 2015

How much is in the option pool? Well, if you have an option pool of only 6% and have many more execs to hire to build out your team you’re going to ask for more options to be created in the future. Option pool (likely dilution in the future, which is a function of a higher price just not yet defined).

Pre-Money Valuation 150

Pre-Money Valuation Option Pool Post-Money Valuation Dilution 150

Austin Startup

JANUARY 25, 2020

This was my time at a Wall Street firm that had hired me after I applied for their Junior Stockbroker position, a little while after I graduated from college. Other founders say having a baby beats it, but we’ll have to wait and see about that. Those could help out a lot of founders. I heard them but said nothing.

Delaware 62

Delaware SEC New York City New York 62

This is going to be BIG.

AUGUST 21, 2023

Before we get into a debate about how much a founder should own, there’s a context implicit in the question that is easily overlooked. Now that we’ve established that, let’s talk about founder blind spots. That doesn’t make you a bad founder. And as for the founder incentive thing, I have two comments. Did you spot it?

Cap Table 78

Cap Table Term Sheet Database Option Pool 78

Scott Edward Walker

NOVEMBER 26, 2017

Accordingly, I thought it would be helpful to provide some basic fundraising advice to first-time founders based upon my 20+ years of legal experience. Instead, you typically need a “warm referral” (or introduction) from someone they respect and trust — preferably a successful founder whom they have backed. www.youtube.com/watch?v=NEOR0AJsziE.

Term Sheet 63

Term Sheet San Francisco Founder Investment Bankers 63

techcrunch.com

FEBRUARY 25, 2010

You could make the same argument about acquisitions and option pools. 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.

Liquidation Preference 63

Liquidation Preference Founder Option Pool Acquisition 63

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.paulgraham.com

APRIL 28, 2010

I think it would help founders to understand funding better—notjust the mechanics of it, but what investors are thinking. And if trouble withinvestors is one of the biggest threats to a startup, managing themis one of the most important skills founders need to learn. Few startups get it quite right. Many are underfunded.

Technical Review 76

Technical Review Startup Software Review Vesting 76

www.paulgraham.com

OCTOBER 23, 2010

Whichis good news for founders: theyll get to keep more of the company. Leads could (and did) use a fixed size round as alegitimate-seeming way of saying what all founders hate to hear:Ill invest if other people will. So ifyou want to predict what the future of venture funding will be like,just ask: how would founders like it to be?

Startup 93

Startup Valuation Non-Compete Deal Flow 93

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. times more equity than Founder X. times more equity than Founder X.

Cap Table 67

Cap Table Pre-Money Valuation Option Pool Liquidation Preference 67

www.inc.com

SEPTEMBER 24, 2011

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 Create an options pool, if nothing more than in your mind, so you have some parameters to work within," Durkin says.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

www.startupnorth.ca

OCTOBER 23, 2010

Home Events Contact Jobs StartupIndex Founders versus early employees by David Crow on September 10th, 2009 in Resources Not everyone can be a founder. We talk about the founders of startups and companies. We focus on the founders. The founders get press coverage. The founders will each take a major chunk (e.g.

Employee 41

Employee Founder Salary Equity 41

VC Cafe

OCTOBER 16, 2010

How do bootstrapped companies hire talent? Instead of a 20% option pool, we created a 40% option pool, and gave out half of it to the first half-dozen hires who came on and were willing to work without salary for a period of time, forming the core team. Nothing else. Short answer: Patagonia.

Option Pool 88

Option Pool Analytics LLC Startup 88

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. Many advisors want options they can exercise immediately —that’s fine.

Advisory Board 44

Advisory Board Cap Table Vesting Equity 44

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

Seeing Both Sides

JULY 15, 2009

Another term that impacts the price is the size of the option pool. Most VCs invest in companies that need to hire additional management team members and sales and marketing and technical talent to build the business. We put forward a “6 on 7” deal with a 20% option pool. I was competing with another firm.

Pre-Money Valuation 49

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

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. You can start by examining every aspect of the co-founder relationship. In fact, if your co-founder is a friend or relative, that should trigger even more issues and discussions.

Cofounder 40

Cofounder Founder Preferred Stock Startup 40

www.mattbartus.com

DECEMBER 9, 2012

Perspectives on issues affecting founders, startups and investors from a veteran startup lawyer in Silicon Valley. If you are a company that is fundraising, keep in mind that there are a few different levers you can pull to change the amount of dilution that the founders will experience. Option Pool. Option Pool.

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40

venturehacks.com

DECEMBER 9, 2012

This is the advisor paradox : hire advisors for good advice but don’t follow it, apply it. Your task is to hire the maverick advisors in the crowd. Hiring advisors is an ongoing effort. Then hire him if you like the results. How to pick a co-founder. The Option Pool Shuffle. Constantly updated.

Advisory Board 50

Advisory Board Cap Table RSS Cofounder 50

venturehacks.com

SEPTEMBER 22, 2011

In practice, you raise money or hire an employee because you need to, not because you want to. Say the equity equation tells you to pay a prospective hire above market. You should still pay the hire a market rate and save the company some equity. Say the equity equation tells you to pay a prospective hire below market.

Equity 40

Equity Cap Table Valuation RSS 40

Berkonomics

NOVEMBER 23, 2023

Equity is divided between the founders and the business begun. Although this insight does not address this point of ignition, we should note in passing that things always change over time, and formerly strong founder-contributors can become a drag upon a business or lose interest if the enterprise is not quickly successful.

Equity 62

Equity Stock Options Vesting Early Stage 62

www.payne.org

SEPTEMBER 22, 2011

5 Stock vs Options. 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. My advice: understand the terms of your option grant, especially the strike price.

Equity 56

Equity Employee Vesting Preferred Stock 56

Berkonomics

SEPTEMBER 28, 2017

Equity is divided between the founders and the business begun. Although this insight does not address this point of ignition, we should note in passing that things always change over time, and formerly strong founder-contributors can become a drag upon a business or lose interest if the enterprise is not quickly successful.

Early Stage 102

Early Stage Equity Stock Options Vesting 102

Berkonomics

MAY 12, 2010

Equity is divided between the founders and the business begun. Although this insight does not address this point of ignition, we should note in passing that things always change over time, and formerly strong founder-contributors can become a drag upon a business or loose interest if the enterprise is not quickly successful.

Early Stage 85

Early Stage Equity Stock Options Vesting 85