Trending Sources

The Option Pool Shuffle

venturehacks.com

Use a hiring plan to justify a small option pool, increase your share price, and increase your effective valuation. Thanks!

Sizing Option Pools In Connection With Financings

A VC : Venture Capital and Technology

Investors like to require that an unissued option pool is in the pre-money valuation calculation when they put money into early stage companies. This post is about how to size the option pool. And the investors want the option pool to be in the pre-money valuation. Hopefully it will explain the issue.

Option Pools and VC Negotiations

Rob Go

In my last post about raising seed vs. jumping straight to A, I received a good comment from Chris Woods that my analysis neglected to include the impact of option pools that are created at each financing round. Essentially, the new investor wants there to be a certain % of options available to employees after they invest.

Introducing the Cap Table and Hiring the CTO

Feld Thoughts

This week they set out to create their cap table and hire a CTO. As first time entrepreneurs they did not create an employee options pool; we’ll fix that in a little while. They come up with two options: Hire Praveena as an employee and offer her stock options. Time to update the cap table.

When The VC Asks: About Your Hiring Plan

Hunter Walker

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.

Want to Know How VC’s Calculate Valuation Differently from Founders?

Both Sides of the Table

The VC assumes you’ll have an option pool. You’ll need to hire and retain talen to grow your company. Normal. million.

Equity for Early Employees in Early Stage Startups

SoCal CTO

For your first key hires, three, five, maybe as much as ten, you will probably not be able to use any kind of formula. million. Not bad.

What to expect before accepting the offer to become Engineer #1 at a startup

The Next Web

They were referring to non-founder engineers, most commonly the first hire for technology businesses. “It kinda sucks to be engineer #1.”.

Viva La Revolucion! AngelList goes into Hyperdrive

Fred Destin

Some VentureHacks posts are today mentioned like religious scriptures by entrepreneurs, such as Nivi''s 2007 Option Pool Shuffle.

Quick & Dirty How-To: Employee Stock Option Allocations

Christine.net

A great question came up recently in discussion with one of First Round's CEOs: how much equity should I allocate for hiring my next round of employees? Stock option comparables are hard to come by, so I thought I should post what I dug up for our CEO. Most option grants are near the bottom of the ranges. CEO 5 - 10. COO 2 - 5.

CMO CTO COO Equity and Compensation

SoCal CTO

I was just asked about a particular startup situation (seed stage, CMO hire, non-founder) and particularly what compensation and equity is appropriate.

The Right Way to Grant Equity to Your Employees

Fresh Inc.: The Staff Blog

Each year, you create a new option pool that addresses the following needs: New Hires: These grants are used to hire new employees at market levels.

How to pick a co-founder

venturehacks.com

Geeks can always be hired. Venture Hacks Good advice for startups. Picking a co-founder is your most important decision. Date first. Not many.

How to Divide Equity to Startup Founders, Advisors, and Employees

thinkspace.com

Percent of the outstanding option pool: meaningless. Strike price of options: meaningless. Ill DM you a couple options.

In VC deals, Price Doesn't Matter - But The "Promote" Does

Seeing Both Sides

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.  The founders would own 34% and we would set aside a stock option pool of 20% for future hires

Everything you ever wanted to know about advisors, Part 1

venturehacks.com

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. The Option Pool Shuffle. Venture Hacks Good advice for startups. SPONSORED BY.

Cap Table Clean Up

ithacaVC

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. And don’t forget that the options granted would come out of the available option pool.

How to Fund a Startup

www.paulgraham.com

Ifyour competitors offer employees stock options that might make themrich, while you make it clear you plan to stay private, yourcompetitors will get the best people. Now the group is looking for moremoney: they want enough to last for a year, and maybe to hire acouple friends. Want to start a startup? Apply for funding by March 3.

Options

Chris Dixon

The most common types of derivatives are futures – the  obligation to buy a security at a future date at pre-agreed upon price – and options – the right to buy something at a future date at pre-agreed upon price. Valuing options was a mystery until 1973 when the  Black-Scholes model was invented. For example.

Memo to CEOs & Founders: Stop Being Such Cheap Bastards

techcrunch.com

You could make the same argument about acquisitions and option pools. Why aren’t we surprised when three months later that company can’t hire enough engineers? The 3-person executive team, including a CEO if one was hired, owns 10%, and splits $3.6 The remaining $36 million is divided according to equity ownership.

The Things I Wish I Could’ve Told Young Mr Fishkin | Rand Fishkin, Moz | BoS EU 2016

Business of Software Blog

But early on, I made plenty of mistakes in hiring including in leadership and junior roles, all across the board. Video. Unsubscribe anytime.

Startup Equity For Employees

www.payne.org

Stock vs Options. 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. Stock vs Options. At that point, you would be an official stock holder with 25,000 shares and 75,000 unvested options.

How does funding work? Angel & VC investment in Nordic startups by the numbers

ArcticStartup

These two also got 1,5 percent stake from the option pool each, as well as 3 early employees having 1 percent each. Compared to the U.S.

A Compilation of the Web's Best Advice for Entrepreneurs

Platforms and Networks

skip to main | skip to sidebar Platforms and Networks Thoughts about platforms, network effects and entrepreneurship Wednesday, November 25, 2009 A Compilation of the Webs Best Advice for Entrepreneurs Below, I link to blog posts and other online resources that offer advice for entrepreneurs. Great list. Tom, well done - solid list. Nice list.

VC Fundraising: CEO's role

Startup Economy

valuation will be driven down due to the additional risks of hiring the top leadership option pool needs to be carefully assessed to have something attractive enough for the incoming CEO VCs want to keep the founders around. While this may be a big win for startup, hiring someone who fits into the culture, team dynamics, etc.

Anatomy of a Term Sheet: Nature of a Term Sheet and Summary of Offering Terms

VC Ready Blog

Second, the employee option pool is typically set at 15-20% of a company’s fully-diluted post-money capitalization at the time of a Series A financing, though it is sometimes set as low as 10% or as high as 25%. The goal should be to establish a pool that is the right size to meet the company’s needs for the foreseeable future.

Anatomy of a Term Sheet: Nature of a Term Sheet and Summary of Offering Terms

VC Ready Blog

Second, the employee option pool is typically set at 15-20% of a company’s fully-diluted post-money capitalization at the time of a Series A financing, though it is sometimes set as low as 10% or as high as 25%. The goal should be to establish a pool that is the right size to meet the company’s needs for the foreseeable future.

Startup Administrivia: Part 1 – getting started

Startup Musings

Hiring professional service providers. Hiring professional service providers. The easiest thing to do is to hire a corporate attorney to do it for you. Hire a contract accountant who can set you up with Quickbooks. Note: This multi-part post is for first time founders. Hopefully, you are all over the market opportunity.

Best Practices Series Wrap-Up: All About Term Sheets

UC Berkeley

Although the standard option pool (to incent key hired) is typically 20%, this is one of a few areas where there is wiggle room for negotiating with the VCs. 4. “Never ask for a VC meeting on Monday…total rookie mistake,” said Mintz Levin’s Brady Berg and VantagePoint Capital Partners’ Neil Wolff. UC Berkeley

Founders versus early employees

www.startupnorth.ca

Being an early hire at a startup gives an individual the ability to make tremendous impact on an organization as it grows – and both the founders and those hires should know it.” This should force companies to think about building value with each early hire, and not just filling a position. We focus on the founders. link].

some thoughts on term sheets

Seed Stage Capital

The founder is looking to carve off 8.3% of the company to incentivize new hires. Among them: #1: The salary he asks for ($225k). He was hungry.

The Future of Startup Funding

www.paulgraham.com

In effect, this structure gives the investora free option on the next round, which theyll only take if itsworse for the startup than they could get in the open market.Tranched deals are an abuse. Even the cheap kinds of startups will generally raise large amountsat some point, when they want to hire a lot of people. Ditto for PayPal.

Everything you ever wanted to know about advisors: Part 2.

venturehacks.com

Advisor compensation Whether you’re hiring a normal advisor or super advisor: Advisory shares are usually issued as common stock options.

Cash-strapped? How to pay for services with your startup’s equity

The Next Web

Many young tech startups reserve 15%-20% for employee stock options. Imagine if you grant stock options to a handful of consultants.

Beware of Premature Merge Elation

Both Sides of the Table

There is a telltale sign of an inexperienced startup entrepreneur. They get premature merge elation. Here’s what I learned: 1. million uniques.

Startups: Cut the Wheat from the Chaff on Quora

VC Cafe

How do bootstrapped companies hire talent? Short answer: Chargify – recurring payments. Github – version control. link] – crm.

How to Find the Perfect Startup Job: Part IV "Negotiating the Startup Offer"

Genuine VC

This post doesn’t going into general tactical approaches of job offer negotiation, but rather focuses on the fact that with startups a significant part of compensation is related to equity or options. So optimizing a startup offer involves not just one key figure – salary – but also the option package. Early-Stage.

Post-close

Will Price

Develop an option budget that maps to the hires forecast in the operating plan Post funding, start-ups typically reserve an unallocated option pool of ~20%. Based on the hires in the operating plan, it is prudent to develop an option pool budget that allocates appropriate levels of budget grants to the forecast hires.

Using warrants to pump up your VC valuation

www.mattbartus.com

You have a 20% option pool, so you know this will take your ownership down from 80% to 60%, and the VC will get 25%.  Option Pool.

CompStudy Highlights: “Live Tweets” from the Webcast

Noam Wasserman

Sources of Hires. TECH] Advice from panel (Aaron): As upturn starts, have to start pulling triggers a little quicker for both sides of hiring (co, hire). [LS] Sources of hires in LS ventures: For all non-CEO/non-CFO positions, CEO-as-source-of-hire has increased in 2009 by at least 14%. ” Cash Compensation.