Both Sides of the Table

AUGUST 3, 2010

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).&#. And your outcomes are tied to their moves and their stock. BUT … it’s your company. Want to sell early?

Merger 276

Merger Technical Review Early Stage Dilution 276

David Teten

JANUARY 19, 2021

Eligible for favorable treatment under Qualified Small Business Stock exemption, if structured as equity. This applies if the investment converts into common stock; details are beyond this essay’s scope. Womble Bond Dickinson has released a white paper on Performance Aligned Stock and a term sheet on ImpactTerms.org. . (If

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Both Sides of the Table

SEPTEMBER 25, 2010

People raised rounds with “a discount to the next round&# or “warrant coverage.&# Yes, these give cheaper prices to early angels but potentially not much of a discount if the company becomes hot. I believe you reward investors who make an early call just like on the public stock market.

Finance 286

Finance Term Sheet Technical Review Warrant 286

ConversionXL

APRIL 27, 2017

What happens when ecommerce sites run out of stock? But First… How Sites Usually Deal with Out of Stock Product Pages. Great, now just add it to… wait, it’s out of stock?! The product is out of stock, but you don’t realize it until you’re ready to buy and check the fine print.

Stock 90

Stock Product eCommerce SEO 90

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. Founded it as a California LLC but your potential VC wants a Delaware C-Corp?

Southern California 318

Southern California Silicon Valley IP Stock Options 318

YoungUpstarts

MARCH 29, 2018

It’s entirely possible that you should be spending more, i.e. buying more stock so that you never run out and lose sales as a consequence. Are all the things you’re paying for worth having – do they get used enough to warrant the cost? Get the infrastructure sorted. Monitor your purchase costs.

Technical Review 100

Technical Review .Net Warrant Cost 100

Women Entrepreneurs Can

AUGUST 10, 2021

The more your employees know about the company, how to handle customer relations, stock levels, services you provide, etc., They don’t need to know how to handle complaints as their first line of defense, although this skill is very much warranted. Staff Training. They need to know how to avoid that complaint in the first place.

Customer 40

Customer Software Review Warrant Employee 40

Both Sides of the Table

SEPTEMBER 18, 2014

If you’re wildly successful early on or if they help you achieve a great valuation they actually pay a significant price for their eventual stock even though they took much more risk than a future investor and backed you early. Less than you’ll probably grant your most junior employees in stock options? Stock Option plans.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

ithacaVC

NOVEMBER 12, 2011

So, the debt holder ends up with Series A stock with a $1 value (and usually a 1X liquidation preference, in this hypo $1) for $.85. Conversion Discount vs Warrant Coverage. For example, if the discount is 15%, then if the Series A round priced at $1 a share, the note holders would convert their debt (plus accrued interest) at $.85

Warrant 49

Warrant Liquidation Preference Equity Stock 49

Gust

JUNE 7, 2014

5) Senior Preferred Stock and warrants. 7) Junior Preferred Stock and warrants. 9) Common Stock (including any Preferred that converted to Common, any exercised options, and all Founders stock) and Common stock warrants. 2) Secured creditors. 3) Un-secured trade creditors.

Warrant 157

Warrant Preferred Stock Early Stage Common Stock 157

Berkonomics

DECEMBER 6, 2010

Use stock options and warrants to pay for service only rarely. Earlier, I stated that stock options are the currency of early stage business. There are times when services of others are available for stock instead of – or in addition to cash. This truth is obvious when a start-up has no cash.

Stock Options 61

Stock Options Stock Warrant Common Stock 61

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

Agile VC

OCTOBER 23, 2012

For example, if there were no S&P 500 ETFs or index mutual funds an investor could easily buy a “synthetic” equivalent by buying shares of all the S&P 500 stocks in proportion to each company’s weighting in the index.

LP 176

LP Accredited Investor Carried Interest Portfolio 176

Berkonomics

FEBRUARY 20, 2020

But what happens when the entrepreneur has taken investments from one or more outside investors and may not even own a simple majority of the company’s stock? To most lenders, the guarantee is still a requirement, putting the entrepreneur in a position of additional risk that is not spread among the shareholders.

Warrant 62

Warrant Liquidity Event Stock Finance 62

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. Professional advisors and consultants are typically paid by the half day or full day, charging anywhere from $600 per half day at the low end up to $4,000 or more at the high end for a full day of work.

SBA 62

SBA Warrant Stock Options Vesting 62

YoungUpstarts

JUNE 1, 2019

It could even be possible that your business deals with a lot of seasonal stock and you’ll need a room to store these items safely when they’re not needed. If you’re making enough revenue to warrant a storage unit, then.

Warrant 113

Warrant New York Security Stock 113

ithacaVC

APRIL 5, 2011

A cap table is a written record (in Excel, for example) of who owns stock in your company. It lists every owner out by amount owned, type of stock (common or preferred), and date purchased. It also lists out option holders and warrant holders. I am a huge fan of simple cap tables. So, we needed a solution.

Common Stock 45

Common Stock Stock Cap Table Preferred Stock 45

Startup Professionals Musings

JULY 24, 2013

Include here articles of incorporation, bylaws, shareholder minutes, board minutes, state filings, stock ledger, copies of stock certificates, options and warrants, and copies of all securities law filings. Keep good backups of all computer files. Corporate records.

Intellectual Property 233

Intellectual Property SBA Warrant Stock 233

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

Startup Professionals Musings

JUNE 23, 2012

Include here articles of incorporation, bylaws, shareholder minutes, board minutes, state filings, stock ledger, copies of stock certificates, options and warrants, and copies of all securities law filings. Keep good backups of all computer files. Corporate records.

Intellectual Property 242

Intellectual Property SBA Warrant Startup 242

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. Be honest with yourself VCs are now going to be looking closer at margins, cost structures and true sales, and product market fit.

Early Stage 108

Early Stage Los Angeles Silicon Valley Cofounder 108

Startup Professionals Musings

MARCH 15, 2016

Include here articles of incorporation, bylaws, shareholder minutes, board minutes, state filings, stock ledger, copies of stock certificates, options and warrants, and copies of all securities law filings. I recommend one of the many cloud-based and low-cost tools to help, such as the Viewpost business network.

Intellectual Property 120

Intellectual Property Startup SBA Warrant 120

Startup Professionals Musings

MARCH 19, 2011

Include here articles of incorporation, bylaws, shareholder minutes, board minutes, state filings, stock ledger, copies of stock certificates, options and warrants, and copies of all securities law filings. Keep good backups of all computer files. Corporate records.

Intellectual Property 233

Intellectual Property SBA Warrant Stock 233

Startup Company Lawyer

MAY 4, 2009

Warrants and Bonus Pool. Each founder participating in a semester’s program will sign a Founder Agreement, which includes an obligation to grant a warrant to the Founder Institute to purchase 3.5% Forms of the Founder Agreement and the warrant are available on the Founder Insititute website.

Founder 28

Founder Warrant San Francisco Intellectual Property 28

YoungUpstarts

APRIL 17, 2017

Look for business behaviors warranting praise. Stock up on incentive prizes that can be doled out right at the moment you realize they deserve it. It can also come by identifying personal milestones of those that work for you. There are other actions deserving of a “spot reward,” meaning recognition or reward on the spot.

Warrant 133

Warrant Employee Social Media Programming 133

Gust

SEPTEMBER 17, 2014

If you’re wildly successful early on or if they help you achieve a great valuation they actually pay a significant price for their eventual stock even though they took much more risk than a future investor and backed you early. Less than you’ll probably grant your most junior employees in stock options? Stock Option plans.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

The Next Web

OCTOBER 8, 2015

stock, options, warrants). Sometimes that motivation comes in the form of cash compensation (e.g., lucrative sales commission plan, profit share plan), and sometimes that comes in the form of equity or equity linked incentives (e.g., You can… This story continues at The Next Web.

Equity 60

Equity Employee Warrant Stock Options 60

David Teten

AUGUST 19, 2019

That’s how we can offer competitive rates … with no prepayment penalties or warrants attached. Sample Series B Preferred Stock sample term sheets from: Kauffman Foundation and Carlton Fields Jorden Burt. For a case study of what happened when one company decided to “divorce” its VC investors, see Buffer on We Spent $3.3M

Revenue 60

Revenue Term Sheet Founder Technical Review 60

www.inc.com

SEPTEMBER 24, 2011

Why Arizona Bay started taking stock from its customers instead of cash. During the first Internet boom, companies that provided services to tech start-ups were all too happy to work for stock. The 2011 Top Lists. 500|5000 Conference. Honorees Resources. Apply. ); Topics >. Leadership and Managing >. Strategy and Planning >.

Arizona 40

Arizona Equity Iowa Venture Capital 40

SiliconHills

DECEMBER 14, 2015

on the Toronto Stock Exchange on Dec. 11th, along with warrants […] The post Austin-based Perk.com Buys Viggle of New York appeared first on SiliconHills. Perk.com announced Monday it has signed an asset purchase agreement with New York-based Viggle Inc., a mobile and web-based entertainment marketing platform.

New York 48

New York Austin Warrant Stock 48

Gust

SEPTEMBER 5, 2012

Like any promissory note, it bears interest (usually at a nominal rate) and has a maturity date on which the loan must be repaid if it hasn’t been converted to stock (typically around 18 months). In that sense it’s more like a warrant or option with a zero exercise price.). How can this possibly make sense?

Finance 134

Finance Convertible Security Equity Seed Stage 134

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. Team: Hires, fires, departures, responsibility changes, major promotions, and your org chart. Section 6: Current Priorities/Discussion.

Seed Stage 331

Seed Stage Cap Table Metrics Burn Rate 331

Startup Company Lawyer

MARCH 14, 2010

To differentiate it from typical “Series A&# preferred stock, which comes with certain expectations with regard to rights. There is no real rule to what a particular series of preferred stock is called. The Series Seed Stock Purchase Agreement has fairly limited reps and warranties. Why is it called Series Seed?

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

ithacaVC

JUNE 28, 2011

Pay to play provisions: simply stated, pay to play provisions provide that unless existing shareholders participate in the subsequent financing unfavorable things happen to their existing stock. Warrant kickers: A warrant kicker is a reward for participation.

Warrant 53

Warrant Common Stock Liquidation Preference Institutional Investors 53

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. Professional advisors, consultants, are typically paid by the half day or full day, charging anywhere from $400 per half day at the low end up to $3,000 or more at the high end for a full day of work.

Warrant 97

Warrant Stock Options Vesting Equity 97

Gust

DECEMBER 8, 2011

Enter into agreements between Newco and founders, early contributors, outside advisors or service providers under which they contribute or assign all intellectual property related to the company’s business to Newco in exchange for the issuance of founders’ stock (Common Stock). Make escrow arrangements for restricted stock (i.e.,

Intellectual Property 139

Intellectual Property Non-disclosure Agreement Delaware Stock 139

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