The Equity Kicker

APRIL 10, 2015

A few of them have done good up rounds and the easiest way to describe the magnitude is to talk about the valuation multiple. As a refresher, the post-money valuation is calculated as the pre-money valuation plus the amount of money invested.). (As

Valuation 60

Valuation Pre-Money Valuation Post-Money Valuation Option Pool 60

Up and Running

SEPTEMBER 20, 2021

For instance, the cap table will help you with various possibilities while running business activities like available options and pre-money valuations faster. In case this option is not available, you may quickly discover how much you will give and calculate the percentage you are ready to offer. Total share ownership.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

Pascal's View

JULY 9, 2017

This is a fundamental issue that does, indeed, boil down to understanding the post-money valuation of a company. At its core, this issue points to the lack of understanding about the importance of post-money valuation by both entrepreneurs and investors. But it is also a topic that many find esoteric and difficult to grasp.

Post-Money Valuation 49

Post-Money Valuation Valuation Cap Table Covenant 49

Agile VC

APRIL 17, 2011

Post-money valuation probably no higher than $12M (2). Pre-money valuation was initially set higher but was adjusted to match the Ser B valuation. Pre-money valuation was approx. Pre-money valuation was approx. Pre-money valuation was at least $250M (2). liquidation preference, 6% accumulated dividend (1).

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

Both Sides of the Table

JUNE 5, 2015

In the old days VCs funded off of a “pre-money” valuation. If you add the pre-money valuation (let’s say $8 million) to the amount of money you’re raising (let’s say $2 million) you get the post-money valuation. How much is in the option pool? Why do investors care about this?

Pre-Money Valuation 150

Pre-Money Valuation Option Pool Post-Money Valuation Dilution 150

Rob Go

AUGUST 29, 2016

When I first started out as a VC nearly 9 years ago, most early stage company valuations were expressed as pre-money valuations. That is, the valuation of the company prior to the investment of new capital. Today, nearly all early stage term sheets I see are expressed as post-money valuations.

Post-Money Valuation 52

Post-Money Valuation Valuation Cap Table Term Sheet 52

The Next Web

JUNE 15, 2012

Any decision to hand out stock or stock options should be made within the big picture context of your company’s valuation and the total number of shares you’ll be granting. Many young tech startups reserve 15%-20% for employee stock options. Plan upfront.

Equity 116

Equity Stock Options Vesting Stock 116

David Teten

DECEMBER 3, 2019

The reports showcase raw data, analytics, visualizations, and benchmarking statistics on the company from dozens of sources, including team, intellectual property, technology, product, financial, banking, marketing, customer, risk, valuation, and investment information.”. If you have one, please contact me. 7) Negotiate .

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

ithacaVC

JANUARY 24, 2013

One interesting point that comes up a lot is how to factor the convertible debt into the premoney valuation of the Series A round. Option pool: 500,000 shares (some issued, some reserved, but that is typically irrelevant as the whole pool is normally factored into the premoney share price calculation).

Valuation 53

Valuation Balance Sheet Option Pool Dilution 53

ReadWriteStart

SEPTEMBER 2, 2011

Including things like liquidation preferences impact both future rounds and ultimate liquidity to why VCs ask to expand an option pool before investing as part of their term sheet. Tip 5: Remember Time Kills Deals.

Cap Table 125

Cap Table Term Sheet Liquidation Preference Technical Review 125

Both Sides of the Table

AUGUST 17, 2009

Assuming normal valuations at fund raising rounds you’ll be down to 6-12% after you’ve created a stock-option pool and raised capital. But these people seldom make retirement money from the stock options on these companies. It is hard enough to have a great financial outcome when you start with 100%.

Founder Vesting 365

Founder Vesting IP Intellectual Property Stock Options 365

Hunter Walker

AUGUST 7, 2017

But employee option pool is important enough that I wanted to briefly expand upon my comment above. As a result we’re often amenable to a CEO suggesting, “hey, I’ve thought about it and I’d actually like to create a 12% pool instead of a 10% one.

Equity 94

Equity Pre-Money Valuation Option Pool Founder 94

Gust

AUGUST 30, 2012

Valuation, Size of Raise, Amount of Investment, Form of Investment, Liquidation Waterfall, Option Pool, Board Composition, Anti-Dilution Rights, Protective Provisions, Founder Vesting, *original post can be found on Quora @ : [link] *.

Founder Vesting 144

Founder Vesting Option Pool Exit Strategy Vesting 144

www.mattbartus.com

DECEMBER 9, 2012

How to pump up your VC valuation. Let’s say you receive a term sheet for a $1 million investment at a $3 million fully diluted pre-money valuation, and you’re kind of disappointed. 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.

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40

Gust

SEPTEMBER 13, 2012

In general, and in a more-or-less-ideal world, companies should be prepared to give up roughly 20%-40% of equity for each round of early financing, where the size of each round is enough for the company to increase its valuation significantly.

Option Pool 160

Option Pool Equity Valuation Startup 160

www.paulgraham.com

OCTOBER 23, 2010

Youdnegotiate a round size and valuation with the lead, whod supplysome but not all of the money. Standardized paperwork will do away with the need tonegotiate anything except the valuation, and that will get easiertoo. Butthere may not have to be just one valuation. In the old days, the standard m.o.

Startup 93

Startup Valuation Non-Compete Deal Flow 93

Early Growth Financial Services

JUNE 26, 2014

Baze, Partner at Partech Ventures, Carlos Diaz, CEO at Kwarter, and EGFS’ Chief Strategy Officer Glenn McCrae covered raising funds, how-to pitch VCs, and potential sticking points around valuation. 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 Stock Options 51

ithacaVC

DECEMBER 13, 2013

The share price is calculated by taking the pre-money valuation and dividing it by the number of shares outstanding pre-money. So Share Price (SP) = Pre-Money Valuation (PMV) / Shares Outstanding (SO). On a fully diluted pre-money basis, that would mean the option pool represents 14.5% (356,758/2,456,758) of the cap table.

Cap Table 67

Cap Table Pre-Money Valuation Option Pool Liquidation Preference 67

www.paulgraham.com

APRIL 28, 2010

Another concept we need to introduce now is valuation. I say "in theory" because in early stageinvesting, valuations are voodoo. As a company gets more established,its valuation gets closer to an actual market value. As a company gets more established,its valuation gets closer to an actual market value. Better how?

Technical Review 76

Technical Review Startup Software Review Vesting 76

The Equity Kicker

OCTOBER 8, 2014

We have taken their feedback and tweaked the termsheet as appropriate with the result that on all terms bar valuation, option pool and details of founder vesting our termsheet is now, in effect, very close to fully negotiated before we send it to companies.

Founder Vesting 92

Founder Vesting Vesting Option Pool Institutional Investors 92

The Startup Lawyer

FEBRUARY 4, 2011

The following are some issues to consider and actions to take before accepting an incubator’s offer: (1) Calculate Valuation and Determine Value. Pre-money valuations startups receive from incubators are typically low…really low. The “revised for the cash investment only&# pre-money valuation is $600,000. (2)

Incubator 105

Incubator Pre-Money Valuation Option Pool Advisory Board 105

Business Plan Blog

NOVEMBER 20, 2013

It can be difficult to give away a piece of your “baby”, and this early in the startup stage it is almost impossible to determine the valuation to your company. You also need to think about how much equity you want to have set aside and available for your future employees in your option pool. How much equity do you offer?

Equity 61

Equity Option Pool Cofounder Vesting 61

www.readwriteweb.com

DECEMBER 29, 2011

This includes things like how liquidation preferences impact future rounds and ultimate liquidity, to why VCs ask to expand an option pool before investing as part of their term sheet. Tip 5: Remember Time Kills Deals.

Cap Table 47

Cap Table Term Sheet Liquidation Preference Technical Review 47

Both Sides of the Table

NOVEMBER 4, 2009

Let’s assume that the company raised it at a normal VC valuation, which means it gave up 33% of the company and thus $5 million / 33% = $15 million post-money valuation. When we next spoke he had found out that the CEO had about 5% and there was no management option pool in place. He hadn’t thought to ask.

Stock Options 418

Stock Options Stock Liquidation Preference Option Pool 418

The Equity Kicker

OCTOBER 8, 2014

We have taken their feedback and tweaked the termsheet as appropriate with the result that on all terms bar valuation, option pool and details of founder vesting our termsheet is now, in effect, very close to fully negotiated before we send it to companies.

Founder Vesting 68

Founder Vesting Vesting Option Pool Institutional Investors 68

Austin Startup

JANUARY 25, 2020

And that’s fine, but to learn the most you can in the shortest amount of time, and to actually grow up and truly understand the way things are built, working on a startup is the best way.

Delaware 62

Delaware SEC New York City New York 62

The Startup Lawyer

JANUARY 10, 2011

While progressive discussions with an investor about the investment are fine and most revolve around pre-diligence matters, sometimes these discussions shift towards the pre-money valuation and investment amount. And this has potential negative consequences for the startup.

Term Sheet 64

Term Sheet Pre-Money Valuation Liquidation Preference Option Pool 64

www.inc.com

SEPTEMBER 24, 2011

As you think about how much equity to offer, have a reasonable valuation in mind thats been determined using professional advice. If youre offering the consultant stock options, youll also want to take into consideration what the exercise price is going to be and how long the options will be outstanding.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

Professor VC

JANUARY 17, 2008

Another comment which probably deserves more discussion is around valuation. One of the panelists mentioned that they have gotten very valuation sensitive (nothing wrong with that) and like to purchase preferred stock rather than invest in convertible notes. Labels: angel groups , valuation. See you next time. Steve Bennet.

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

Seeing Both Sides

JULY 15, 2009

Entrepreneurs often mistakenly focus solely on the pre-money valuation while VCs look at multiple knobs in the negotiation to drive to a set of terms that, in total, they find acceptable. The first, and most focused on, is something called the pre-money valuation. Another term that impacts the price is the size of the option pool.

Pre-Money Valuation 49

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

Berkonomics

DECEMBER 6, 2010

Such service providers as web designers, public relations firms, even venture banks granting loans, often offer higher value services for a lesser amount of cash and some amount of stock options or warrants (written promises to sell stock at a set price for a future period in time).

Stock Options 61

Stock Options Stock Warrant Common Stock 61

thinkspace.com

SEPTEMBER 7, 2012

Chris Dixon wrote a blog post about “ The one number you should know about your equity grant “ The one number you should know about your equity grant is the percent of the company you are being granted (in options, shares, whatever – it doesn’t matter – just the % matters). Percent of the outstanding option pool: meaningless.

Equity 62

Equity Employee Founder CTO Hire 62

Business Plan Blog

DECEMBER 26, 2013

Pre-money valuation. A capitalization table showing the post-investment ownership structure of the business to include founders, option pool and investors in the current round. The term sheet is a legally binding document and should include the following elements: - Offer terms, such as: Company, founder and investor details.

Angel Investor 51

Angel Investor Due Diligence Pre-Money Valuation Angel Groups 51

Scott Edward Walker

NOVEMBER 26, 2017

For example, one investor may propose Series Seed Preferred Stock and another investor may agree to a SAFE ; or, in a larger financing, one investor may be pushing hard for participating preferred and a 25% option pool and another investor may agree to the same valuation, but straight preferred and a smaller pool.

Term Sheet 63

Term Sheet San Francisco Founder Investment Bankers 63

venturehacks.com

MARCH 21, 2008

Many advisors want options they can exercise immediately —that’s fine. If your company hasn’t raised a Series A, increase the advisor’s equity by roughly 30%-50% to account for dilution from seed investors, Series A investors, option pools, swimming pools, and the like.

Advisory Board 44

Advisory Board Cap Table Vesting Equity 44

Scott Edward Walker

AUGUST 31, 2011

At what valuation and on what terms? These people need help in defining and pursuing their business goals. How should the founders divide the initial stock ownership? Who should be on their board of directors? Which financing sources should they consider?

Silicon Valley 45

Silicon Valley Term Sheet Liquidation Preference Option Pool 45

www.paulgraham.com

OCTOBER 23, 2010

And those who do raiseVC rounds will be able to get higher valuations when they do. Ifthe best startups get 10x higher valuations when they raise seriesA rounds, that would cut VCs returns from winners at least tenfold. [ ButVCs never offered that option. 6 ] Some super-angels seem to care about valuations.

Valuation 92

Valuation Stock Partner Founder 92