Should You Offer Equity Compensation to Employees?

Up and Running

In 2005, David Choe was invited to paint a number of murals at Facebook’s HQ in Palo Alto. Of course, not every equity compensation story is a David Choe Story. In this article, I’m going to examine: What equity compensation is. Different types of equity compensation.

allensblog: Some Tough Questions You Should Ask

Allen's Blog

More on "Tough Questions" » July 04, 2005. Founders are also “expensive” in terms of equity (usually, and sometimes even rightfully, to reward them for taking the risk in joining a startup). After some jockeying (since they’re “peers” at their current company), they finally settle on the following titles, roles and percentages of the equity: (1) President and CEO (35%), (2) VP Marketing (25%), (3) VP Engineering (25%) and (4) VP Finance/CFO (15%). allensblog.

Trending Sources

Startup Investor Makes a Deal: Engineers for Equity

mashable.com

“Once that product is built, you will probably have given away a lot of equity.&# In exchange for $150,000 to $300,000 of work, each startup has given Kayweb 14% to 40% equity. ); // Welcome to Mashable! Sign in with Facebook or Twitter to get started!

Cap Table Hygiene

Will Price

Too Many Founders A typical Series A sees the following equity ownership distribution: VC syndicate 50%, option pool 20%, founders 30%. Teams of 2-3 founders seem to be the norm and cap table issues, questions about equity (wrt fairness), often arise if the team gets much bigger. Venture capitalists are very much tabla rasa investors. One frequently hears about deals with "no hair," "plain vanilla terms," and good hygiene.

allensblog: More on "Tough Questions"

Allen's Blog

The Problem of the Forgotten Founder » August 14, 2005. I claimed this decision is often gotten wrong and that, not infrequently, one or more co-founders leave the company with an amount of founder’s equity disproportionate to their contribution (in the eyes of their co-founders). Posted by: Charles Jolley | Aug 15, 2005 10:57:40 AM. Posted by: Cherry | Aug 17, 2005 10:39:04 AM. Posted by: Zoli Erdos | Aug 21, 2005 3:39:04 PM. allensblog.

Allen's Blog: Some Tough Questions You Should Ask

Allen's Blog

More on "Tough Questions" » July 04, 2005. Founders are also “expensive” in terms of equity (usually, and sometimes even rightfully, to reward them for taking the risk in joining a startup). After some jockeying (since they’re “peers” at their current company), they finally settle on the following titles, roles and percentages of the equity: (1) President and CEO (35%), (2) VP Marketing (25%), (3) VP Engineering (25%) and (4) VP Finance/CFO (15%). Keep your equity.

Allen's Blog: More on "Tough Questions"

Allen's Blog

The Problem of the Forgotten Founder » August 14, 2005. I claimed this decision is often gotten wrong and that, not infrequently, one or more co-founders leave the company with an amount of founder’s equity disproportionate to their contribution (in the eyes of their co-founders). August 14, 2005 | Permalink. Posted by: Charles Jolley | Aug 15, 2005 10:57:40 AM. Posted by: Cherry | Aug 17, 2005 10:39:04 AM. Posted by: Zoli Erdos | Aug 21, 2005 3:39:04 PM.

April 4-Innovation in Private Company Liquidity-Online Merger Markets, Social Media, Secondary Markets, Non-US Markets, Private Equity, and the Disappearing IPO

David Teten

We will discuss liquidity options appropriate for a wide range of people with private company stock, including private equity funds, venture capitalists, angels, founders, and employees with options. a 2005 book about new developments in Web 2.0 Events Private Equity Venture Capital

Teach Me to be a Successful Entrepreneur While I Stand on One.

VCball

Rule #2: Dont be greedy with your equity. May 02, 2005 in Entrepreneurship and VC | Permalink. Steve Brotman of VCBall says that any entrepreneur only needs to remember two rules in order to be successful: "Dont run out of money" and "Dont be greedy with your equity." Tracked on June 30, 2005 at 05:40 AM. Rule #2: Dont be greedy with your equity. VCball. A New York based VCs quixotic search for new knowledge in early stage venture capital and entrepreneurship.

allensblog: The Problem of the Forgotten Founder

Allen's Blog

Keep the Faith » August 21, 2005. As I’ve written in the last two posts, it not infrequently goes wrong because one of the founders doesn’t work out and leaves the company with an equity stake disproportionate to the value he added – to the economic detriment of the remaining founders. Posted by: Burton Floyd | Aug 31, 2005 6:06:32 PM. Posted by: Haluk ireskeneli | Sep 6, 2005 10:15:12 AM. Posted by: Daniel Howard | Sep 9, 2005 10:55:46 AM. allensblog.

Background - Pequot Ventures

Will Price

I work in the Venture Capital industry for Pequot Ventures , the private equity arm of Pequot Capital Management. Today, Pequot Capital manges equity hedge funds, debt funds, quantitative trading funds, and private equity funds. Pequot Capital is an alternative asset management company that provides limited partners access to a variety of investment prdoucts.

The State and Health of the VC Industry - Serendpity or Process

Will Price

One key difference between the public equity markets and the venture capital markets is the degree to which information is transparent. Brad Feld 's blog introduced me to an article by Howard Anderson called Good-bye to Venture Capital.

The Cost of Optimism

Will Price

Along those lines, I once sat through a McKinsey pitch on private equity firm performance in which McKinsey found that the winning bidder/firm overestimated the target company's first year EBITDA 66% of the time. The Economist recently ran a wonderful piece on the sorry state of project management. The Standish Group, which analyzes IT projects, reported that in 2004 only 29% of IT projects succeeded, down from 34% in 2002.

LBO 0

Burnham's Beat: Software IPOs: 2005 Year In Review

Burnham's Beat

« Top 10 Best Performing Internet Stocks of 2005 | Main. | Top 10 Best Performing Software Stocks of 2005 » 01/02/2006. Software IPOs: 2005 Year In Review. 2005 was not a good year to be a corporate finance banker focused on the software sector as only 4 software companies went public. Comment : Private equity roll-up of out-of-favor enterprise software companies such as Baan, Ironside, Arzoon, etc. Software IPOs: 2005 Year In Review.

A brief history of founders and co-founders

The Equity Kicker

Accelerators have sprung to prominence since Y C was founded in 2005 because for the first time companies can do something meaningful with the small amounts of money they invest. Lots of great people will join a startup for 20-30% equity, or even less.

Burnham's Beat: Private Equity's Software Buying Binge

Burnham's Beat

Private Equitys Software Buying Binge. In 2004 there were, by my count, about 18 acquisitions of public software companies and Private Equity firms made none of them. By 2006 however, not only had the number of acquisitions risen to 32, but Private Equity firms accounted for 25% of them, up strongly from 11% of deals in 2005 (See table below). At this rate I wouldnt be surprised to see private equity account for over 50% of deals in a couple years.

The rise of the “successful” unsustainable company

A Smart Bear: Startups and Marketing for Geeks

And the same thing happened after we sold IT WatchDogs in 2005. After all, before the house of cards inevitably tumbles, private equity investors get a tidy return.

IPO 155

Facebook, Serenity, Courage, and Wisdom

Growthink Blog

No, the heart of the “find the next Facebook” challenge is that the vast majority of investors are either too poor or - more interestingly - too rich to even consider an investment like Peter Thiel’s $250,000 into Facebook in 2005. So when the managers of these funds look at a company at Facebook’s 2005 stage of development, it is just hard for them to visualize how a 6 or low 7 figure investment could possibly “move the needle” of their overall fund return.

$100M Deal That Solidifies Online Education Boom

Inc Startups

Today, the company announced it has raised $103 million in venture financing--the first outside capital it has received in its 17-year lifespan--from Accel Partners and Spectrum Equity, a growth equity firm.

Managing risk is critical to success

Taffy Williams

Holding company equity has risk just as loans have risk. If you doubt this fact, look at the history of certain banks from 2005 to the present; at least the remaining ones! It does not matter whether the investment is as a loan or as equity.

Business Startup Funding: How Even the "Sweatiest Guy" Raised Tons of Funding

Growthink Blog

And when Under Armour went public in November 2005, the company raised $112.5 When raising equity funding, you must give up equity or shares in your business. His name is Kevin Plank. And he was born on August 13, 1972. Kevin was a football player at the University of Maryland.

VC Evolution: Physician, Scale Thyself.

500 Hats

Or, as my friend Marc Andreessen might say, Software Eats the Private Equity World. A few years before all this scandalous VC behavior occurred, in 2005 Paul Graham ) started Y Combinator.

10 Tips for Building Stronger Networks in Work and Life

Inc Startups

Connect to the people who matter. Most people understand that to be successful they need to network. But actually going out and doing it is another matter.

15 Entrepreneurs Share Their Favorite Inspirational Business Quote

Hearpreneur

Jay-Z’s personal brand has been so well crafted and marketed that his brand equity has earned him partnerships and business ventures well beyond the realm of music. Steve Jobs- Stanford Commencement speech 2005.

Adapt or Die: The New Technology Landscape

Inc Startups

Accelerator programs like Silicon Valley-based YCombinator are providing mentorship and seed funds to scores of new start-ups every quarter in exchange for a small equity stake. Innovation and access to seed capital is making it easier than ever to start a technology company.

How to Build a Sustainable Business

Inc Startups

I was introduced to the concept of sustainable design while attending a TED conference in Monterey, California, in 2005. We believe that any additional incremental expenses that result from sourcing domestically will be offset by operational efficiencies and positive brand equity.

Can Recruiters Work With Startups? - DShen's Blogs

Dshen

we talked about accepting equity potentially but the risk of taking early stage startup stock or options is pretty high and most will fail, leaving him with nothing for his efforts if that is the only payment for his services. would love to hear your honest thoughts, noting that you wont get their services for free but you must pay something either in equity and/or cash. For startups, many times its low salary and high equity for the new hire. December 2005 (10).

Why Zuckerberg is Filthy, Stinking, Insanely Rich

Inc Startups

When Sean Parker became president of Facebook in 2004, he was careful to ensure that the young Zuckerberg retained a sizable equity stake in the company. In April 2005, Saverin sued Facebook as well as Zuckerberg personally.

Silicon Valley's Female Trouble

Inc Startups

From 1995 to 2005, 52 percent of the Valley’s startups were founded by people born abroad. The success of Indians had me convinced that Silicon Valley was a model meritocracy. But if that's true, where are all the women? Part 2 of 5.

Invest in Israel Newsletter – February 2012

VC Cafe

The Petah Tikva-based company was founded in 2005. through its GE Healthymagination Fund, an equity fund of GE Capital and GE Healthcare.

Startup Resources

www.vccafe.com

Hundreds of startups featured since 2005, will yours be next? YCombinator Series AA Equity Financing Documents. Founder Equity Issues. Venture Hacks equity section. Legal, Equity, etc. Argonaut Private Equity. Infinity Equity. Israel Private Equity.

14 Inspiring Quotes About Graduations and Opportunity

Inc Startups

What are you willing to spend your moral capital, your intellectual capital, your cash, your sweat equity in pursuing outside of the walls of the University of Pennsylvania? [T]he Your time is limited, so don''t waste it living someone else''s life." -- Steve Jobs, Stanford University, 2005 Want to read more, make suggestions, or even be featured in a future column?

How I Built the Netflix of Construction Equipment

Inc Startups

But it all sort of crystallized around 2005, when I was in Silicon Valley, working on my MBA at Stanford. How Nabil Kassam rethought heavy equipment sales -- online. Nabil Kassam founded Noble Iron, a company that rents and sells heavy equipment for the construction industry, in 2008.

Meet America's 10 Fastest Growing Private Companies

Inc Startups

million Three-Year Growth: 10,237% Cartagz was founded in 2005 to take the pain out of going to the DMV. It was then that Unified Payments acquired eight equity-distressed competitors struggling through the recession.

Top Startup Advisor Paul Graham Just Warned Against Taking Google's Money

www.businessinsider.com

Many if not most seed investments in startups these days are done in the form of convertible debt, which is a loan that can convert to equity in a subsequent financing. Y Combinator is a startup funding firm that was founded in 2005 by Paul Graham. Login. Login. Username. Password.

Y Combinator Founder Issues New Warning to Start-ups

Inc Startups

The article said Graham accused Google Ventures, which says it has made more than 100 seed investments , of capping the price at which the start-ups' loans would convert to equity. Paul Graham blasts lowball VC offers in general, and Google Ventures in particular, according to a report.

Being a solo founder

Spencer Fry

That article came just at the start of the Y Combinator accelerator, which had its first class in Summer 2005. And oftentimes, those two (or three) people fail to set expectations up front, or have those difficult conversations about equity, responsibilities, and what they want the startup to be. Much has been written about the disadvantages of being a solo founder.

Hiring Lessons Learned the Hard Way

Inc Startups

Her company, the largest importer of wine produced by indigenous Africans in North America, launched in 2005. She advises entrepreneurs to offer equity or other forms of compensation to early hires so they have skin in the game.

Metrics for Series A - DShen's Blogs

Dshen

You probably cant hire since you are running low on cash and need to raise, unless you can get somebody to sign up on equity. You probably cant hire since you are running low on cash and need to raise, unless you can get somebody to sign up on equity. Convertible Notes vs. Equity (6). December 2005 (10). November 2005 (2). The Web and the World of Business. Observations on doing business in the world of Web 2.0. Archives. Other Blogs. Search.

If, Why, and How Founders Should Hire a “Professional” CEO

Reid Hoffman

I co-founded LinkedIn in 2003, and by 2005, after asking myself the key questions about my passion, focus, and commitment, I knew I wanted to bring in a CEO.