View from Seed

OCTOBER 15, 2014

Examples of housekeeping include the following list, though not every item will appear every time: Finance: Cash out date, burn rate, 409A valuation, cap table, common/preferred stock dashboard. A seed-stage mobile startup’s housekeeping section might look something like this: Section 3: Core Metrics.

Seed Stage 331

Seed Stage Cap Table Metrics Burn Rate 331

David Teten

AUGUST 19, 2019

One of the reasons that RBI VC is growing in both feasibility and popularity is that more businesses are becoming metrics-driven , which means that investors have better line of site on their future revenues. Sample Series B Preferred Stock sample term sheets from: Kauffman Foundation and Carlton Fields Jorden Burt.

Revenue 60

Revenue Term Sheet Founder Technical Review 60

Steve Blank

OCTOBER 24, 2017

While 20th century metrics were revenue and profit, today it’s common for companies to get acquired for their user base. Traditionally, in exchange for giving the company money, investors would receive preferred stock, and founders and employees owned common stock.

Founder 245

Founder Technical Review CTO Hire IPO 245

ithacaVC

APRIL 5, 2011

One rule of simple cap tables is to issue “normal” stock to founders (common stock only) and investors (typically preferred stock, but sometimes common stock to early friends and family). The investor deserves to get preferred stock ultimately (remember, that was the goal of the convertible debt).

Common Stock 45

Common Stock Stock Cap Table Preferred Stock 45

Both Sides of the Table

MARCH 21, 2010

Make the warrants for common stock and not preferred stock. This is the same as with employee stock options. Subjective warrants – I also see warrants given out without hard metrics. I believe that PBW’s should have hard metrics. Common Mistakes. Just don’t give them free.

Warrant 298

Warrant Dilution Startup Stock Options 298

Up and Running

MAY 23, 2016

Delaware law gives preferred stock investors of a corporation certain voting rights and control over the corporation. Step 8: Track your metrics. For many people, tracking metrics can seem like something scary, boring, or time-consuming. We use LivePlan’s Scoreboard feature to keep track of our own metrics.

Software Review 74

Software Review Software Delaware Forecast 74

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