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

Both Sides of the Table

I’m not sure I really even need to write this at length because Nivi absolutely nailed the topic in his article “ The Option Pool Shuffle.&#. When I went to raise money in 2006 I thought I knew every term in a term sheet but somehow I still got a bit duped by the option pool shuffle. No option pool shuffle.

Valuation 405
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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.

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Equity for Early Employees in Early Stage Startups

SoCal CTO

The first few people into a startup are on a spectrum of founder vs. early employee. For your first key hires, three, five, maybe as much as ten, you will probably not be able to use any kind of formula. Suppose the company wants to make a "profit" of 50% on the new hire mentioned above. n = (1.2 - 1)/1.2 =.167.

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Beware of Premature Merge Elation

Both Sides of the Table

Often senior people from one company are given senior titles at the other. But to be clear the overwhelming majority of deals involve one company driving the cultural integration, establishment of uniform processes, hiring / firing decisions, etc. how to integrate technology, systems, people and culture. - This is a good thing.

Merger 276
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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.

Hiring 108
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What is it Like to Negotiate a VC Round?

Both Sides of the Table

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).

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Why I left Wall Street to figure it out.

Austin Startup

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. The startup was launching its product there, and as part of the promotion plan, we were to go into bars in the evenings and sign people up to use their service.