article thumbnail

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
article thumbnail

Beware of Premature Merge Elation

Both Sides of the Table

But to be clear the overwhelming majority of deals involve one company driving the cultural integration, establishment of uniform processes, hiring / firing decisions, etc. If they raise a bunch of capital little ole you isn’t going to be around to have your option pool topped up. They often involve big hugs on stage.

Merger 276
Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

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. Having just moved to Austin from Boston, she thought adding African car sales could help, maybe thinking Africans looking for used cars can use it to find car deals.

article thumbnail

Should You Share Equity with Consultants?

www.inc.com

Sales & Marketing | Wednesdays. SALES & MARKETING. 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 The Goods: Your Business Toolbox | Thursdays. Finance | Tuesdays. Innovation | Fridays. Newsletters.

article thumbnail

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.

article thumbnail

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. Startup employees are granted common shares out of something called an option pool. Again this is somewhat simplified as the liquidity event (sale or IPO) may come as cash, stock, or a combination of the two.

Engineer 129
article thumbnail

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. We put forward a “6 on 7” deal with a 20% option pool. In other words, they have a $4.4