Startup Professionals Musings

JULY 9, 2014

Founders stock, and stock options, will be worth nothing for the first several years, if not forever. The partner most obsessed with the startup lifestyle tests the water by going to work in an early-stage startup, similar to one they might hope to start someday. Who gets stock options, and how many?

Technical Review 250

Technical Review Stock Options Due Diligence Silicon Valley 250

Both Sides of the Table

AUGUST 14, 2017

Executives run the day-to-day so often the board is more involved as a sparring partner at key intervals. That’s true. The administrative work we actually do at board meetings?

Cofounder 217

Cofounder Stock Options Equity Technical Review 217

Both Sides of the Table

MAY 27, 2013

Understanding where your VC partner sits in their respective fund and where their fund is in the cycle of its investment lifecycle will help you understand your VCs behavior. And you can often throw in a separate action like approving stock-option grants, getting approval for CAPEX spend, discussing fund raising timing – whatever.

Advisory Board 365

Advisory Board CTO Hire Fractional CTO Los Angeles 365

Startup Professionals Musings

FEBRUARY 18, 2018

He gives a wealth of practical advice on building a successful technical startup, including some specifics that I like on what constitutes a dream team of partners: The technical guru. The rest can come from early hires (with stock options to assure commitment), equity investors, or even strategic partners.

Technical Cofounder 144

Technical Cofounder Cofounder Advisory Board Startup 144

Startup Professionals Musings

AUGUST 27, 2014

Find a strategic partner to accelerate growth. Great team members may take more time to find, and cost you stock options, but a qualified and highly motivated team that stretches your budget is a good calculated risk. Risk is more manageable with subscriptions and even freemium pricing.

Startup 283

Startup Forecast Stock Options Technical Review 283

Startup Professionals Musings

OCTOBER 18, 2015

Founders stock, and stock options, will be worth nothing for the first several years, if not forever. The partner most obsessed with the startup lifestyle tests the water by going to work in an early-stage startup, similar to one they might hope to start someday. Who gets stock options, and how many?

Technical Review 120

Technical Review Entrepreneur Stock Options Due Diligence 120

Startup Professionals Musings

FEBRUARY 17, 2018

Find a strategic partner to accelerate growth. Great team members may take more time to find, and cost you stock options, but a qualified and highly motivated team that stretches your budget is a good calculated risk. Risk is more manageable with subscriptions and even freemium pricing.

Forecast 161

Forecast Stock Options Technical Review Metrics 161

Both Sides of the Table

JANUARY 21, 2010

Forget to get around to setting up that Employee Stock Option Plan and want to be able to give the early guys their options at a low strike price? They usually ask for warrants (basically like a stock option) in exchange for taking a deferred fee. Focus on the partner you would be working with.

Southern California 318

Southern California Silicon Valley IP Stock Options 318

Startup Professionals Musings

JUNE 11, 2014

The rest can come from early hires (with stock options to assure commitment), equity investors, or even strategic partners. I’m not suggesting that you need all six of these as cofounders initially, but I always recommend a minimum of two founders with different perspectives.

Technical Cofounder 245

Technical Cofounder Cofounder Advisory Board Startup 245

Austin Startup

JULY 15, 2019

You will work closely with Joshua Baer, Gordon Daugherty, Bryan Chambers, the Ventures Team, limited partners, external venture capitalists, lawyers, accountants and startup CEO’s to review legal agreements, perform our diligence checklist, and make sure transactions close in a timely manner. Do you catch mistakes that other people miss?

Texas 56

Texas Technical Review Silicon Valley Venture Capital 56

Up and Running

DECEMBER 1, 2015

If you’re giving a large percentage of your company to someone (and yes, two percent is large), you’re entering into a contract that’s really a whole lot like marriage in that it creates a long-term relationship between you and the employee or partner. Make sure you understand all of your options before making any decisions.

Equity 60

Equity Employee Stock Options Vesting 60

Startup Professionals Musings

APRIL 10, 2016

Calculate employee stock option values and vesting times, as well as salary. These questions are the key ones in every due diligence effort, always done by accredited investors, but almost never done by key employees and new partners. Look for examples of similar companies and revenue multiples achieved from acquirers.

Sweat Equity 120

Sweat Equity Burn Rate Technical Review Intellectual Property 120

Startup Professionals Musings

MAY 8, 2022

Old co-workers or new friends with complementary skills usually make the best partners. Offer low cash early, with bonuses or stock options for milestones, to people in your personal network. The founder’s title and role dilemma. Very early, you need generalists who can cover multiple areas, but you can’t pay for experience.

Founder 325

Founder Hockey Stick Cofounder Liquidity Event 325

YoungUpstarts

MAY 7, 2017

With access to business insights and being able to formulate turnkey solutions with complementary business partners, developing a robust product roadmap has become more of an art of finding ways to create scalable and cost-effective methods to reach your business goals, based on budget and resource constraints.

Silicon Valley 183

Silicon Valley Technical Review Product Canada 183

Steve Blank

MARCH 16, 2016

VC’s raise money from their investors (limited partners like pension funds) and then spread their risk by investing in a number of startups (called a portfolio). BTW, Angel investors do not have limited partners, and often invest for reasons other than just for financial gain (e.g., The Deal With the Devil.

Liquidity Event 120

Liquidity Event Founder Liquidation Preference Venture Capital 120

Startup Professionals Musings

APRIL 8, 2015

Calculate employee stock option values and vesting times, as well as salary. These questions are the key ones in every due diligence effort, always done by accredited investors, but almost never done by key employees and new partners. Look for examples of similar companies and revenue multiples achieved from acquirers.

Technical Review 120

Technical Review Due Diligence Sweat Equity Burn Rate 120

Startup Professionals Musings

SEPTEMBER 9, 2015

Find a strategic partner to accelerate growth. Great team members may take more time to find, and cost you stock options, but a qualified and highly motivated team that stretches your budget is a good calculated risk. Risk is more manageable with subscriptions and even freemium pricing.

Forecast 120

Forecast Startup Stock Options Technical Review 120

Transformify

SEPTEMBER 5, 2023

With an estimated 300,000+ payroll and bookkeeping services in the US, choosing the right partner is essential for accuracy and efficiency, ensuring compliance with evolving regulations. In addition, SurePayroll noted that 32% of small business owners have made a payroll mistake at least once.

Small Business 52

Small Business Software Review Stock Options Software 52

Startup Professionals Musings

SEPTEMBER 13, 2015

The rest can come from early hires (with stock options to assure commitment), equity investors, or even strategic partners. I’m not suggesting that you need all six of these as cofounders initially, but I always recommend a minimum of two founders with different perspectives.

Technical Cofounder 120

Technical Cofounder Cofounder Advisory Board Stock Options 120

Startup Professionals Musings

FEBRUARY 7, 2020

When I lived in Silicon Valley where “everyone” was an entrepreneur, I noticed that smart couples followed the strategy that both partners would never be in startups at the same time. Founders stock and stock options are worth nothing for the first few years. Adopt the Silicon Valley entrepreneur family model.

Silicon Valley 315

Silicon Valley Entrepreneur Stock Options Flash 315

Feld Thoughts

OCTOBER 8, 2013

My partner Dave and I took the number, made a list of all employees, and figured out how much we were going to give each of them. Figure out an equation for converting the bonus amount (in current cash terms) to stock option awards. At Feld Technologies, we had a very simple bonus program. We did this on an accrual basis.

Stock Options 146

Stock Options Technical Review Leadership Equity 146

Transformify

NOVEMBER 30, 2019

Jana handles everything from strategic business formation to employee matters, stock options, partnership agreements, partner disputes, confidentiality agreements, buyouts, global trademark registration, commercial leases and all stages of startup funding, and corporate restructuring.

Intellectual Property 83

Intellectual Property Employee Software Review New York City 83

Berkonomics

JANUARY 25, 2024

And some will willingly work for stock options, an amount to be negotiated based upon time spent and stage of corporate development. The one warning: avoid those looking to become partners, asking for larger portions of equity than, say, 5% when they contribute no cash to the enterprise.

SBA 62

SBA Warrant Stock Options Vesting 62

Both Sides of the Table

APRIL 19, 2011

Called Tim Spicer (c-companies partner) and he told him matt, they only want one thing, more warrant coverage!!! Mark: 10% warrant coverage is like stock options. Icing is the warrant for banks – stock they can buy in future but don’t have to buy so they make their $$ later in the future. And he said ok got it.

Acquisition 304

Acquisition Warrant Customer Term Sheet 304

Both Sides of the Table

JUNE 17, 2017

It was a stock option incentive related “expense” but I bet you didn’t know that because in an era where we only read the headlines — they must be a train wreck losing billions. Is the revenue dependent on a concentrated set of distribution partners or platforms that put future revenue at risk? Two-f **g-billion!

Stock Options 227

Stock Options Startup Dilution Venture Capital 227

Up and Running

JULY 2, 2014

Picking the right attorney in your startup is as important as picking the right business partner. My business partner and I made many mistakes in our first tech startup, and so many of them were the result of choosing a lawyer who was a terrible fit. My business partner and I were elated. We set off to raise our money.

Technical Review 118

Technical Review Angel Investor Due Diligence Dilution 118

Both Sides of the Table

FEBRUARY 22, 2019

Often partners like to bring along an analyst or associate both as a way to help train younger staff (it’s an apprentice business) and also to have somebody to follow up on action items. This can be practical for both parties if this is a senior partner already sitting on 10–12 boards. To be clear about one thing?—?almost

Strategic Investors 255

Strategic Investors Startup Stock Options Venture Capital 255

YoungUpstarts

JULY 17, 2020

If possible, offering stock options in lieu of raises or to counteract pay cuts is another way to build security. Of course, you want to make sure that your employees are also feeling financially secure. Above all, don’t ask your employees to do anything that you are not already doing yourself to a greater degree.

Startup 287

Startup Wisconsin Stock Options Dividend 287

Startup Professionals Musings

AUGUST 10, 2019

Old co-workers or new friends with complementary skills usually make the best partners. Offer low cash early, with bonuses or stock options for milestones, to people in your personal network. The founder’s title and role dilemma. Very early, you need generalists who can cover multiple areas, but you can’t pay for experience.

Hockey Stick 243

Hockey Stick Cofounder Liquidity Event Startup 243

Reid Hoffman

DECEMBER 10, 2020

If I’m going to find out that a set of founders lack integrity, don’t behave like partners, take on unacceptable risks that might harm their customers or society, or simply aren’t the kinds of people I want to spend a decade with, I want to know those facts before I start down the path of evaluating that investment. I think David’s wrong.”.

Hosting 69

Hosting Hockey Stick IPO Silicon Valley 69

crowdSPRING Blog

NOVEMBER 7, 2014

Startup Equity and Stock Options: What’s It Worth to You? The @crowdSPRING community partners with US State Dept for Social Impact | Justmeans – crowdspring.co/1ux55RH. A Counterintuitive System for Startup Compensation – crowdspring.co/1zRImmt. – crowdspring.co/1sSpg62. 10baTD3.

Social Media 99

Social Media Small Business Design Media 99

YoungUpstarts

OCTOBER 24, 2017

Hammer Out the Details Between Partners. Stock Option documentation. If you’re already running as a partnership or sole proprietor, the company can be converted to an LLC, or a C or S corporation. Converting will come at a higher cost. Everyone must be on the same page, or there will be problems further on down the road.

LLC 168

LLC Startup Stock Options Cofounder 168

YoungUpstarts

FEBRUARY 11, 2020

When I became a managing partner, aside from directing our strategy on where to invest, I also helped recruit board positions and management teams. Early in my climb I was hyper-focused on title and pay, realizing later that good health was like a stock option that pays off later.

Switzerland 264

Switzerland Private Equity Stock Options Equity 264

Both Sides of the Table

MAY 2, 2015

than to have to deal with healthcare benefit options, vacation policies, health-and-safety regulations and so forth. Stock option top-ups after a few years are vital retention mechanisms. He prepares board meetings, negotiates important contracts with partners and keeps the 4 VCs on the board in sync.

Operations 150

Operations Metrics Early Stage Non-Compete 150

www.joelonsoftware.com

MARCH 24, 2010

Teamwork skills are excellent at the project, company, and industry-partner levels. As the company grows, the initial package of stock options offered to new hires will be lower and lower. At any given time, stock option awards are equal based on level. Once a year well grant people more stock options.

Software Review 48

Software Review Stock Options Salary Technical Review 48

Startup Professionals Musings

NOVEMBER 30, 2014

Yet you should offer a reasonable monthly fee and/or some stock options to show you are serious about the position. If you are looking for someone to fill an operational gap, or to do product design, it’s usually more productive to look for a partner, employee, or consultant. Formalize the compensation.

Advisory Board 276

Advisory Board Startup Stock Options Stock 276

Both Sides of the Table

FEBRUARY 25, 2019

cash & unallocated stock options) Should we raise capital, from whom, how much and at what price? Every year I invited my largest investors to NYC to have an LPAC meeting (Limited Partner Advisory Committee?—?kind Should we cut costs, do layoffs, close divisions and focus scare resources on fewer projects?

LP 269

LP Startup Burn Rate Stock Options 269