The Equity Kicker

OCTOBER 8, 2014

In our case we set out to be founder friendly and wrote a termsheet that has the minimal set of investor protections that we can get away with as an institutional investor – we need some protections because we have a duty of care to the people who invest in our fund. Forward Partners Venture Capital'

Founder Vesting 68

Founder Vesting Vesting Option Pool Institutional Investors 68

www.inc.com

SEPTEMBER 24, 2011

Durkin , managing partner with the Boston -based law firm Lucash, Gesmer & Updegrove LLP. Chip Morse , cofounder and partner with Morse, Barnes-Brown & Pendleton P.C., Create an options pool, if nothing more than in your mind, so you have some parameters to work within," Durkin says. based in Waltham, Mass. Two trucks.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

www.paulgraham.com

OCTOBER 23, 2010

If we assumethe average startup runs for 6 years and a partner can bear to beon 12 boards at once, then a VC fund can do 2 series A deals perpartner per year. Whichis good news for founders: theyll get to keep more of the company. One by one, all thethings founders dislike about raising money are going to geteliminated. [

Startup 93

Startup Valuation Non-Compete Deal Flow 93

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 Warrant 68

Both Sides of the Table

NOVEMBER 4, 2009

When I was CEO of my first company (where I admittedly F’d up everything before I figured it all out) we initially calculated for people how much there options were going to be worth some day. When we next spoke he had found out that the CEO had about 5% and there was no management option pool in place.

Stock Options 418

Stock Options Stock Liquidation Preference Option Pool 418

The Next Web

OCTOBER 7, 2013

They were referring to non-founder engineers, most commonly the first hire for technology businesses. In exchange, the engineer is likely offered the promise that his or her option shares will one day turn into big money. is frequently granted ownership significantly less than that of the founders. Engineer #1?

Engineer 129

Engineer Dilution Option Pool Vesting 129

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

Rob Go

AUGUST 29, 2016

Founders also had to do a little math on the new option pool to really understand what their ownership would be post investment, since it was typically taken out of the company pre-money. First, it creates a natural dis-incentive for a founder to raise more money than originally planned.

Post-Money Valuation 52

Post-Money Valuation Valuation Cap Table Term Sheet 52

David Teten

DECEMBER 3, 2019

But in business, you want a lot of partners. In the private equity universe, most Partners have primary training as deal-makers, not as managers. See Bessemer Venture Partners’ A comprehensive guide to security for startups. Cobalt for General Partners helps GPs to optimize their fundraising strategy. 1) Manage the firm

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Professor VC

JANUARY 17, 2008

A partner from the law firm (sponsor, covers the drinks and food) tosses out some softball questions to the panelists, the audience chimes in with Q&A and finally, culminates with the meet and greet where the panelists are flooded with business cards and pitches on the next great thing, which is often very similar to the last great thing.

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

Scott Edward Walker

AUGUST 31, 2011

How should the founders divide the initial stock ownership? He will also help diligence the investors to make sure you choose the right partner for your startup. they usually play a much larger role in the businesses being started. They are often dealing with people with very limited or no business experience.

Silicon Valley 45

Silicon Valley Term Sheet Liquidation Preference Redemption 45

Both Sides of the Table

AUGUST 17, 2009

These periods of time can leave a founder very vulnerable in the future. Assuming normal valuations at fund raising rounds you’ll be down to 6-12% after you’ve created a stock-option pool and raised capital. But these people seldom make retirement money from the stock options on these companies.

Founder Vesting 365

Founder Vesting Intellectual Property Stock Options IP 365

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

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

www.instigatorblog.com

OCTOBER 23, 2010

David Crow just posted about this very topic: Founders vs. Early Employees and shows the Venture Hacks chart. 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. But I also told him that I though the numbers were wrong.

Equity 41

Equity Employee Startup Vesting 41

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 Angel Investor 76

Berkonomics

NOVEMBER 23, 2023

. … and here is the usual early-stage trap… First, a brand-new enterprise is often formed from the efforts of several “partners”, each with an expertise valued by the others. Equity is divided between the founders and the business begun. An option plan should carve out an addition of about 15% of the “fully diluted” shares.

Equity 62

Equity Stock Options Vesting Early Stage 62

venturehacks.com

SEPTEMBER 22, 2011

They don’t even try to get market price for their investment; they limit their holdings to leave the founders enough stock to feel the company is still theirs.” The top firms are mainly in the business of making money for their limited partners by picking the startups that are going to succeed with or without their value add.

Equity 40

Equity Cap Table Valuation RSS 40

Berkonomics

SEPTEMBER 28, 2017

Here’s an example: First, a brand-new enterprise is often formed from the efforts of several “partners”, each with an expertise valued by the others. Equity is divided between the founders and the business begun. An option plan should carve out an addition of about 15% of the “fully diluted” shares.

Early Stage 102

Early Stage Equity Stock Options Vesting 102

Both Sides of the Table

FEBRUARY 22, 2011

Let’s say each of those 5 partners has at least 7 other investments each. The most common case is that the partner who did the deal left the firm. When you consider that they’ll also want a 15-20% option pool in the company you’re talking about founders owning as little as 40% after just one round.

Dilution 314

Dilution Cap Table Due Diligence Option Pool 314

www.paulgraham.com

OCTOBER 23, 2010

And they make a lot more investmentsper partner than VCs—up to 10 times as many. 3 ] Because super-angels make more investments per partner, they haveless partner per investment. It will vary enormously from one partner to another. Founders never really likedgiving up as much equity as VCs wanted.

Valuation 92

Valuation Stock Partner Founder 92

Berkonomics

MAY 12, 2010

First, a brand new enterprise is often formed from the efforts of several “partners”, each with an expertise valued by the others. Equity is divided between the founders and the business begun. An option plan should carve out an addition of about 15% of the “fully diluted” shares. Email readers continue here.]

Early Stage 85

Early Stage Equity Stock Options Vesting 85

The Next Web

AUGUST 14, 2013

This is a guest post by Wade Foster , co-founder and CEO of Zapier, which originally appeared on his blog. But since I’m relatively fresh off of the experience I get asked by first-time founders how they should go about raising money for their startup. Usually those aren’t first-time founders though. It certainly did me.

Founder 142

Founder Incubator Cofounder Accredited Investor 142

Both Sides of the Table

SEPTEMBER 1, 2011

Every corporate transaction you’ll do will require somebody to help you to: Think through the options, negotiation terms, get other investors on board, talk with new investors/partners/companies you’re acquiring, etc. That’s what they’ll be saying to other VCs or their partners as your company is flaming out.

Strategic Investors 312

Strategic Investors Los Angeles Cap Table Startup 312