SoCal CTO

SEPTEMBER 27, 2011

I was asked by a reader how much equity he should give out to early employees and to service providers in a very early stage startup. I'll get to service providers in a later post. If the company's valuation is $2 million, $90k is 4.5%. 11.1% - 4.5% = an offer of 6.6%. Same Value for Sweat Equity as Investment Dollars?

Early Stage 391

Early Stage Equity CTO Hire Sweat Equity 391

Both Sides of the Table

FEBRUARY 15, 2016

There is much talk these days that startup valuations have decreased and may continue to do so and that the amount of time it takes to fund raise may take longer. The earlier the round, the less capital you need and the more reasonable your valuation the less time that is needed generally to raise capital. Only you know.

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

The Equity Kicker

AUGUST 1, 2012

This analysis assumes there was no participating liquidation preference and lumps together companies that have raised money with those that haven’t, but I think it is fair to guess that in aggregate the investors in these companies didn’t get what they set out for. Karma – a social, mobile gifting service.

San Francisco 110

San Francisco Hiring Liquidation Preference Aggregator 110

genylabs.typepad.com

SEPTEMBER 24, 2011

If we mention a product or service that we received for free or other considerations, we will note it. has an article on service firms waiving their fees and instead taking equity in their clients. where your stock sits in the liquidity preference stack. Cloud Services. location based services. Categories.

Equity 40

Equity Technical Review San Jose Stock 40

Altgate

DECEMBER 16, 2010

@altgate Startups, Venture Capital & Everything In Between Skip to content Home Furqan Nazeeri (fn@altgate.com) ← More on Liquidation Preferences Happy Holidays → Where Do Tech VCs Invest? IT services, as you would expect, doesn’t attract much investment capital. Not sure how to explain that.

Liquidation Preference 59

Liquidation Preference Early Stage Venture Capital Later Stage 59

abovethecrowd.com

MAY 20, 2013

Today, Seamless and Grubhub announced the signing of a definitive agreement to merge two of the nation’s premier services for ordering takeout online. There are common stock, common options, and as many as three to five different layers of preferred stock, each with a specific liquidation preference.

Merger 53

Merger Institutional Investors Liquidation Preference Preferred Stock 53

Startup Company Lawyer

FEBRUARY 21, 2010

Due to aggregate liquidation preferences that may exceed the acquisition price in an M&A deal, common stock may be rendered worthless. If you can’t figure this out yourself, you should probably build a liquidation preference spreadsheet to model how liquidation preferences work depending on M&A transaction value.

Retention 31

Retention Liquidation Preference Employee Common Stock 31