Early Growth Financial Services

JUNE 26, 2014

Valuation — Know what these terms mean: Fully-diluted — This includes all issued stock and anything that could be converted into common stock (typically after an acquisition or IPO), such as your stock option pool. Pre-money valuation — The value of the company prior to investment, calculated on a fully-diluted basis.

Pre-Money Valuation 51

Pre-Money Valuation Option Pool Dilution Common Stock 51

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.

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68

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. Receive package valued at $2,000!

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

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

Cap Table 67

Cap Table Pre-Money Valuation Option Pool Liquidation Preference 67

The Next Web

OCTOBER 7, 2013

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. Stock is naturally more speculative as to value, public or private. I’ll take that in singles, please.

Engineer 129

Engineer Dilution Option Pool Vesting 129

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. This is especially true when you think of a tech startup, where the first few hires are typically engineers/programmers. And if the equity values increase, it provides more reasonable wiggle room between salary and equity.

Equity 41

Equity Employee Startup Vesting 41

Seeing Both Sides

JULY 15, 2009

In my partnership, we've come up with a new term (I think it's new - I don't see it written or talked about much) called the "promote" to help communicate with entrepreneurs the real value behind a particular deal so get them to step back from concentrating only on the pre-money valuation or post-money ownership. What is the promote?

Pre-Money Valuation 49

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

www.mattbartus.com

DECEMBER 9, 2012

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. Option Pool. Thanks Randy, glad you found it of value. What questions should I ask the lawyers I am considering hiring? Take a look at the numbers: Pre-Money.

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40

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

Up and Running

SEPTEMBER 20, 2021

The use of a cap table for a company comes into play when it has to track the total amount of shares, the value of shares, and the equity ownership of all the shareholders. For instance, the cap table will help you with various possibilities while running business activities like available options and pre-money valuations faster.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

www.startupnorth.ca

OCTOBER 23, 2010

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.” Paul Graham provides a model for calculating value. link] Sandy Ward One hire that can be tough is the first person after the founders.

Employee 41

Employee Founder Salary Equity 41

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. Options are usually best with “C” corporations but granting options for either LLC’s or “S” corporations are not a real problem.

Equity 62

Equity Stock Options Vesting Early Stage 62

David Teten

DECEMBER 3, 2019

Some notable metrics are revenue growth rates, free cashflow, leverage ratios, historical financing amounts, returns on marketing spend, customer acquisition costs, lifetime value of customers, customer churn rates, and team social scores. ff Venture Capital hired two full-time engineers to build out Totem.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

www.payne.org

SEPTEMBER 22, 2011

5 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. If the company is reluctant, point out that you need this information to accurately value your common stock.

Equity 56

Equity Employee Vesting Preferred Stock 56

www.paulgraham.com

APRIL 28, 2010

Much of the value of a startup consists of that tinyprobability multiplied by the huge outcome. When we were starting Viaweb,I didnt know about the concept of an accredited investor, anddidnt stop to think about the value of investors connections.The reason I didnt take money from my parents was that I didntwant them to lose it.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

thestartuplawyer.com

FEBRUARY 24, 2010

Who must be a co founder and who can remain a hired principal? When I find, and hire on options, the three perfect CEs/directors must I consider them co founders and treat them accordingly? Who must be a co founder and who can remain a hired principal? He obviously never launched a startup and got shafted by a co-founder.

Cofounder 40

Cofounder Founder Preferred Stock Startup 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. Options are usually best with “C” corporations, but granting options for either LLC’s or “S” corporations are not a real problem. How about the price per share?

Early Stage 102

Early Stage Equity Stock Options Vesting 102

thinkspace.com

SEPTEMBER 7, 2012

The idea behind the calculator is to come up with a weight for each of these five elements and then assign a value to each founder on a scale of 0-to-10. Percent of the outstanding option pool: meaningless. Strike price of options: meaningless. From there you can get the percentage of equity. Price of shares: meaningless.

Equity 62

Equity Employee Founder CTO Hire 62

venturehacks.com

MARCH 21, 2008

If an advisor can uncork a million dollars of your company’s latent value with 15 minutes of conversation or a single introduction, you should pay him appropriately. They can even add more value than an independent board member because they don’t have to deal with corporate governance. Or they raise your money for you.

Advisory Board 44

Advisory Board Cap Table Vesting Equity 44

Scott Edward Walker

NOVEMBER 26, 2017

The goal for every startup seeking funding is to find superstar investors (“A” investors – as opposed to “B” or “C”) who can add substantial value via their domain expertise, their contacts and/or their experience. Tip #1: Get Warm Referrals to “A” Investors. www.youtube.com/watch?v=NEOR0AJsziE. v=NEOR0AJsziE.

Term Sheet 63

Term Sheet San Francisco Founder Investment Bankers 63

Berkonomics

MAY 12, 2010

An option plan should carve out an addition of about 15% of the “fully diluted” shares. If there are 85,000 shares issued to the founders, then a plan calling for 15,000 shares in a pool reserved for future hires is appropriate, making the fully diluted shares 100,000. a share, then options must be priced at that amount.

Early Stage 85

Early Stage Equity Stock Options Vesting 85