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

Both Sides of the Table

AUGUST 3, 2010

My recommendation to our lead partner looking at the deal, “Pass. My version is, “you have a company with private stock. Somebody else is trying to convince you to sell to them in exchange for all stock. Don’t trade your company (cat) for their stock (dog).&#. million uniques. He’s talented.

Merger 276

Merger Technical Review Early Stage Dilution 276

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

David Teten

AUGUST 19, 2019

John Borchers, Co-founder and Managing Partner of Decathlon Capital, claims to be the largest revenue-based financing investor in the US. Feenix Venture Partners has a unique investment model that couples investment capital with payment processing services. However, according to Bryce Roberts, co-founder of Indie.VC, only 0.6%

Revenue 60

Revenue Term Sheet Founder Technical Review 60

The Startup Magazine

JUNE 1, 2023

As a founder, ask yourself – does your business actually warrant VC funding? After all, you’ve likely given your employees stock options which make them part-time business owners as well. His vision is to create a logistics company that curates trust from its employees to the shippers and carriers they partner with.

Early Stage 146

Early Stage Los Angeles Silicon Valley Cofounder 146

www.mattbartus.com

DECEMBER 9, 2012

One possibility is to negotiate a higher valuation and offer warrants (i.e., an option to purchase shares in the future at a pre-determined price) to the investor to purchase preferred stock at the Series A price. Warrants. -. In order to exercise the warrants, the VC will need to pay an extra $666,667 into the company (i.e.,

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40

Berkonomics

JULY 16, 2020

Lenders sometime add a charge for loan oversight, called a consulting fee, and very often make warrants (a promise to later sell the lender stock at a fixed price) a part of the deal. And it is often cheaper than the cost in dilution of issuing additional stock to obtain working capital.

Covenant 62

Covenant Dilution Warrant Intellectual Property 62

The Next Web

OCTOBER 8, 2015

employees, partners) are appropriately motivated to help you succeed. stock, options, warrants). Usually this is fine, provided that important key parties (e.g., Sometimes that motivation comes in the form of cash compensation (e.g.,

Equity 60

Equity Employee Warrant Stock Options 60

www.inc.com

SEPTEMBER 24, 2011

Why Arizona Bay started taking stock from its customers instead of cash. One of the ways vendors and partners--whose behind-the-scenes assistance often is crucial to a start-ups success--can get a piece of the action is to exchange services for equity. Graham is careful about whom he chooses to partner with. The 2011 Top Lists.

Arizona 40

Arizona Equity Iowa Venture Capital 40

Startup Company Lawyer

MAY 4, 2009

How to keep your start-up in the sights of both partners and buyers. Description: How to explain and present your business to target partners and investors. Warrants and Bonus Pool. The founder’s company may terminate the warrant on or prior to the initial equity financing by paying the Founder Institute $100,000.

Founder 28

Founder Warrant San Francisco Intellectual Property 28

Berkonomics

DECEMBER 7, 2017

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.

Warrant 97

Warrant Stock Options Vesting Equity 97

View from Seed

OCTOBER 15, 2014

This is pulled from NextView’s board deck resource, which was compiled using a combination of real startup board decks and input from NextView’s founding partners: Rob Go , David Beisel , and Lee Hower. Here’s an exact, step-by-step breakdown of how we’d recommend structuring it.

Seed Stage 331

Seed Stage Cap Table Metrics Burn Rate 331

Gust

SEPTEMBER 5, 2012

” Yet in my little corner of Wonksville, Founder Institute CEO Adeo Ressi and Yoichiro “Yokum” Taku , a partner at my “alma mater” law firm Wilson Sonsini Goodrich & Rosati , created quite a stir this past week by announcing a new set of template deal documents dubbed “ Convertible Equity.”

Finance 134

Finance Convertible Security Equity Seed Stage 134

Startup Company Lawyer

MARCH 14, 2010

I was actually somewhat surprised that the following investors have agreed to use the Series Seed documents in certain of the their deals: Baseline, Charles River Ventures, SV Angel (Ron Conway), First Round Capital, Harrison Metal Capital, Mike Maples, Polaris Venture Partners, SoftTech VC and True Ventures. “ . Legal fees.

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

Both Sides of the Table

MAY 23, 2010

the loan converts at 15-20% discout to the new money coming in) or your investor will get “warrant coverage&# which is similar to an employee stock option in that it gives the investor the right but not the obligation to invest in your company in the future at a defined priced. But piers are often counter productive.

Startup 290

Startup Burn Rate Warrant Bankruptcy 290

Berkonomics

AUGUST 21, 2013

Lenders sometime add a charge for loan oversight, called a consulting fee, and very often make warrants (a promise to later sell the lender stock at a fixed price) a part of the deal. And it is often cheaper than the cost in dilution of issuing additional stock to obtain working capital.

Covenant 61

Covenant Warrant Dilution Intellectual Property 61

K9 Ventures

MAY 14, 2011

They are still individual investors, they invest on a full-time basis as professionals, but they have funds with Limited Partners. The limited partners may themselves run the gamut from individuals, family offices, venture capital funds to institutional LPs. They have 4-10 partners who are investing on their behalf. Super Angel.

Preferred Stock 125

Preferred Stock Seed Stage Incubator Early Stage 125

David Teten

OCTOBER 1, 2015

Partnering with a source of capital, connections, and expertise for a large equity chunk is often worth it in those scenarios (e.g., I spoke with Thatcher Bell , Managing Partner, CoVenture. With that as a backdrop, as I ponder the question, my view is that a hybrid approach would work better than all cash or stock.

Software Developers 60

Software Developers Software Development Software Review Technical Cofounder 60

VC Cafe

SEPTEMBER 6, 2011

But here it’s not enough to relay on secondary research – get out there and speak to potential customers, partners and even competitors – gather evidence and interest. Evidence the plan will work – for example, there’s a similar startup in another country that’s working well.

Startup 133

Startup Cofounder Warrant Stock Options 133

www.instigatorblog.com

OCTOBER 23, 2010

A standard programmer who writes “generic&# LAMP or C++ is easily replaceable and therefor warrants little ownership unless finding cash to pay a replacement is tight. Jason Penny Stocks stockexplosion I completely agree with you. Jason Penny Stocks stockexplosion I completely agree with you. This is a great post.

Equity 41

Equity Employee Startup Vesting 41

Berkonomics

JULY 3, 2010

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.

Warrant 71

Warrant Stock Options Vesting Equity 71

Professor VC

JULY 25, 2013

In investment parlance, it strictly means that new classes of stock have equal rights with prior classes in terms of liquidation preference, voting rights, etc. Well, those 3 weeks came and went, and they decided they weren''t sure about the market and needed to get other partners in the firm on board.

Term Sheet 46

Term Sheet Silicon Valley Syndicate Syndication 46

Both Sides of the Table

FEBRUARY 24, 2019

The way that I like to structure this is that for every dollar they write they get a free “penny warrant” for the same amount, so essentially when they invest they pay 50% less than anybody else at that stage has paid. That way somebody who writes $25,000 gets $50,000 worth of stock plus warrants. This isn’t healthy, either.

Warrant 187

Warrant LP Cofounder Founder 187

VC Adventure

AUGUST 30, 2010

Typically this conversion is at a discount to the next equity round (to compensate the debt investors for their risk) and sometimes carries warrants (same rational) or a cap on the equity price that the debt converts into. Historically convertible debt has been easier (and therefore cheaper) to put in place.

Angel Investor 103

Angel Investor Early Stage Equity Valuation 103

Board Effect

MAY 10, 2019

There’s the owner—maybe a partner or two—but unless employees are offered equity from the get-go, there’s typically not a whole lot of dilution. Over time, a company might issue new shares of capital stock or buy back shares of existing stock. Cap tables may also include derivatives such as warrants and options.

Cap Table 40

Cap Table Liquidation Preference Dilution Liquidity Event 40

venturehacks.com

OCTOBER 21, 2010

You explain that the company currently has 6M shares outstanding so the investors must be valuing the company’s stock at $1.33/share: This reverse dilution benefits all classes of stock proportionally even though the common stock holders paid for all of the initial dilution in the first place!

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68

www.chubbybrain.com

SEPTEMBER 28, 2011

At the end, I asked myself what are the most critical resources I need to be successful and the answer was partners and developers. Post-Mortem Title : Untitled Partners Post-Mortem. Company : Untitled Partners. Thus, the process of negotiating taking back stock from founders is not rational and inherently very difficult.

Software Review 79

Software Review Startup Technical Review Vesting 79

A Crowded Space

MAY 31, 2016

When a VC firm does 1-2 deals per partner per year (like JSV), they are deeply committed to each company and are more likely to continue supporting companies that are going through tough times as long as they still believe in the upside scenario. 2) Some insiders are supportive. All of this has happened before.

Cram Down 60

Cram Down Pay to Play Angel Investor Warrant 60

NZ Entrepreneur

JULY 12, 2018

While this isn’t necessarily a “problem” that needs solving, it does warrant a discussion. My own father had difficulties with partners in his business. Co-founder, or employee with an ESOP (Employee stock ownership Plan)? We often see single founders slogging it out on their own. ” username=”nzpreneur”].

Cofounder 44

Cofounder Founder Vesting Cap Table 44

crowdSPRING Blog

JANUARY 30, 2019

Lippincott senior partner Brendan Murphy explained to Fast Company : It’s a very familiar shape that’s also welcoming. ” Heineken’s apology was warranted, as this ad’s design and slogan are a clear failure. It’s idiosyncratic in its expression, but that’s also what makes it human.

Campaign 60

Campaign Channel Design Philadelphia 60

blog.expensify.com

APRIL 24, 2012

” I’m quite sure with this article you alienated not only few potential customers or partners but also some existing ones. As much as I love Linux (and would love to make it my primary OS across all of my development systems), it simply lacks the market share necessary to warrant the investment of my efforts. The Foolish.

Java 107

Java PHP Software Review Coder 107