Startup Professionals Musings

DECEMBER 8, 2019

A reverse merger is the acquisition of an already public company (usually a dormant shell) to avoid the Initial Public Offering (IPO) process and cost, to quickly get your startup on a public exchange for fund raising through visibility and selling stock. There just aren’t enough angel investors and VCs to go around.

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Both Sides of the Table

JULY 29, 2010

Mark Jeffrey - Q: “Is it more traditional to do your ESOP (employee stock option plan) before or after your angel or Series A funding?&# I talked about the need to have a restricted stock plan for your earliest employees. Angels have a much lower threshold for returns than do VCs. This is minutes 8-11. they take time!!

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Venture Capital Term Sheet Valuation Stock Options 282

The Startup Magazine

NOVEMBER 8, 2020

Standard deviation (SD) is the unit of measurement that represents the probability that the stock will reach the end of a specific price range in one year. The standard deviation for stock options is 68.2%. If a stock is priced at $150 and it has an IV of 20%, there is a 68% percent chance the stock will reach $180 in a year.

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Stock Options Merger Stock Entrepreneur 145

Up and Running

DECEMBER 1, 2015

If however you are giving a “normal employee” an incentive stock option plan (more on that later), that’s entirely different. Make sure you understand all of your options before making any decisions. When business owners decide to go down the route of equity compensation, there are two primary options to choose between.

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Equity Employee Stock Options Vesting 60

prosperati.com

OCTOBER 23, 2010

You work long hours at below-market rates for stock options, a chance to participate in the financial payout of the company’s success. In order for stock options to work, your employees must first have a vision of what stock options can do for them. Turns out, not so easy.

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Offshore Malaysia Developer Stock Options 40

Berkonomics

AUGUST 17, 2023

Preparing for the game… If you have been following our recent insights, you’ll be up to speed knowing that professional investors negotiate tough terms, from provisions of control over asset acquisition, eventual sale of the company, future investments, forced co-sale when others attempt to sell their shares and more.

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Liquidity Event Stock Options Stock Audio 118

Startup Professionals Musings

JANUARY 13, 2018

A reverse merger is the acquisition of an already public company (usually a dormant shell) to avoid the Initial Public Offering (IPO) process and cost, to quickly get your startup on a public exchange for fund raising through visibility and selling stock. There just aren’t enough angel investors and VCs to go around.

Merger 198

Merger OTC IPO Due Diligence 198

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. Amazon is continuing to grow at such a rapid pace that of course it should take some of today’s profits and reinvest them in growth (or acquisitions).

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Stock Options Startup Dilution Venture Capital 227

Startup Professionals Musings

AUGUST 26, 2018

You better have lined up a major international expansion, some major acquisition candidates, or a wealth of unfilled orders. Public ownerships usually lends prestige and credibility to your sales, marketing, and acquisition efforts, but it may work counter to your vision of saving the world. Analysts want escalating profits.

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Exit Strategy IPO Initial Public Offering SEC 128

Startup Professionals Musings

MAY 3, 2014

A reverse merger is the acquisition of an already public company (usually a dormant shell) to avoid the Initial Public Offering (IPO) process and cost, to quickly get your startup on a public exchange for fund raising through visibility and selling stock. There just aren’t enough Angel investors and VCs to go around.

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Merger OTC IPO Stock 246

Agile VC

JUNE 5, 2011

3) Groupon’s Business is Like An ATM: Groupon is currently unprofitable on a GAAP basis thanks to acquisition related expenses in 2010 as well as ongoing marketing spend to acquire customers. Groupon’s 2010 net loss includes $203M expenses related to acquisitions of several deal businesses. . Author howerl.

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North America Chicago Boston Silicon Valley 100

Business Plan Blog

SEPTEMBER 25, 2012

If the board determines that it is in the best interests of the shareholders to sell the company, the directors and advisors should not be restricted from sharing in the value of the acquisition merely because their shares have not yet vested. Check back Monday, October 1, for Rule of Thumb No.

Stock Options 40

Stock Options Vesting Stock Acquisition 40

Startup Professionals Musings

JUNE 6, 2014

You better have lined up a major international expansion, some major acquisition candidates, or a wealth of unfilled orders. Public ownerships usually lends prestige and credibility to your sales, marketing, and acquisition efforts, but it may work counter to your vision of saving the world. Analysts want escalating profits.

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IPO Initial Public Offering Startup Small Business Administration 236

YoungUpstarts

MARCH 11, 2015

But it’s an important consideration, especially for companies that plan to offer alternative compensation such as employee stock options, which will usually require a 409A valuation. Startup companies are often cash poor and have little in the form of current monetary compensation to offer their employees.

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Valuation Stock Options CPA Merger 100

Startup Professionals Musings

AUGUST 7, 2016

You better have lined up a major international expansion, some major acquisition candidates, or a wealth of unfilled orders. Public ownerships usually lends prestige and credibility to your sales, marketing, and acquisition efforts, but it may work counter to your vision of saving the world. Analysts want escalating profits.

IPO 120

IPO Initial Public Offering SEC Stock Options 120

Berkonomics

MAY 27, 2021

They protect the company by overseeing the expenditure of company money for expansion, acquisitions, purchases of large assets, hiring of senior management and more. Often, a board meeting is entirely devoted to issues of growth, with members chiming in to help the CEO with marketing issues or customer acquisition.

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Stock Options Dilution Acquisition Stock 62

Startup Professionals Musings

JUNE 15, 2015

A reverse merger is the acquisition of an already public company (usually a dormant shell) to avoid the Initial Public Offering (IPO) process and cost, to quickly get your startup on a public exchange for fund raising through visibility and selling stock. There just aren’t enough Angel investors and VCs to go around.

Merger 120

Merger OTC IPO Due Diligence 120

Up and Running

JULY 2, 2014

Do they (or does the firm they work for) have experience creating compensation packages for key employees, including stock options for all employees? Do they have experience with mergers and acquisitions, including how to set up the company for successful exit scenarios?

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Technical Review Angel Investor Due Diligence Dilution 118

Startup Professionals Musings

JANUARY 16, 2011

Do you need the IPO for your acquisitions strategy? Sometimes the best way to grow is to acquire other companies or other products, and sometimes you need a public stock in order to go that route. Of course, you’re going to have to perform well to make that stock useful in the acquisitions process.

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IPO Social Media Media Exit Strategy 223

Gust

JULY 18, 2012

For startups, it’s also important to understand that Board approval is required for a corporation to issue any new shares of stock or other equity instruments such as stock options. Here is where the concept of fiduciary duty looms large.

Stock Options 188

Stock Options SEC Stock Government 188

Berkonomics

APRIL 4, 2019

These include election or re-election of board members if required by the bylaws of the corporation, approval of any increases to stock option plans (which would dilute the worth of shares outstanding,) and approve any additions to the capital stock authorized to be issued.

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Stock Options Balance Sheet Stock Common Stock 48

Gust

NOVEMBER 4, 2011

Never missing an opportunity for a good war story, I’d like to revisit one high-profile transaction, the $650 million acquisition of MySpace by Fox Interactive Media in 2005, on which I spent many sleepless nights along with the rest of the deal team. These options were granted shortly after MySpace, Inc. by February 2006).

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Valuation Pre-Money Valuation Merger Vesting 98

Both Sides of the Table

FEBRUARY 27, 2019

The law firm has done its job of preparing the stock option requests, board meeting minutes, 409a valuations. If you start with admin (409a valuations, small stock option allocations, board minutes) and you then chew up 20 minutes with this?—?it’s We travel by airplane to sit around considering 0.02% stock grants?

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Stock Options Metrics Stock Valuation 226

Berkonomics

JUNE 29, 2017

If you have been following our recent insights, you’ll be up to speed knowing that professional investors negotiate tough terms, from provisions of control over asset acquisition, eventual sale of the company, future investments, forced co-sale when others attempt to sell their shares and more.

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Early Stage Stock Options Stock Audio 97

www.thedailymuse.com

SEPTEMBER 18, 2012

This can vary depending on complexity: how many founders , what “bells and whistles” will be included, whether you are doing an LLC or a corporation, and how you handle certain items, such as stock option plans, and so on. When should you use a lawyer, and when is it okay to use sites like LegalZoom?

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Hiring LLC Intellectual Property Private Equity 56

Early Growth Financial Services

JUNE 26, 2014

Valuation — Know what these terms mean: Fully-diluted — This includes all issued stock and anything that could be converted into common stock (typically after an acquisition or IPO), such as your stock option pool.

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Pre-Money Valuation Option Pool Dilution Common Stock 51

Berkonomics

APRIL 14, 2012

These include election or re-election of board members if required by the bylaws of the corporation, approval of any increases to stock option plans (which would dilute the worth of shares outstanding), and approve any additions to the capital stock authorized to be issued.

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Stock Options Balance Sheet Stock Common Stock 81

Software By Rob

MAY 3, 2010

It just so happens that most people are not in a place where they can pursue that route.

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Developer Software Review RSS Software Developers 40

Eric Friedman

JUNE 11, 2019

The moves I have seen work here are: Fundraising Event – something is happening on the valuation of the company and you can get someone to start before a third party mark of the stock options/RSU package offered.

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Term Sheet Stock Options Early Stage Agile 68

Business Plan Blog

NOVEMBER 13, 2013

The return only happens when there is an exit via acquisition or an IPO. She recently published an ebook with insights about the impact of JOBS Act & Dodd Frank Act on startup funding, terms like angel, accredited investors, venture capitalists, stock options, Restricted Stock, RSUs. Raising Angel Capital.

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Finance Accredited Investor Angel Investor Seed Capital 93

VC Cafe

SEPTEMBER 6, 2011

Are your costs per acquisition going up or down with scale? Deal structure – I could write a full post just on this, but some aspects that were brought up are the need to agree on a reasonable valuation, what investment vehicles are used (convertible debt vs stock, options and warrants and other non-dilutive mechanisms).

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Startup Cofounder Warrant Stock Options 133

www.copelandfirm.com

OCTOBER 21, 2010

Home About Fee Arrangements Location Referrals Testimonials Business Law HUB Certification Mergers & Acquisitions Startup Advice Intellectual Property Copyrights Trademarks Securities Law Debt and Bridge Financing Series A Startup Law Entity Formation Corporation LLC Series LLC RSS Founders Shares: How do you split them up?

Intellectual Property 40

Intellectual Property Founder Vesting Bridge Financing 40

Agile VC

FEBRUARY 2, 2012

These companies report gross ad revenue but then subtract out “TAC” (Traffic Acquisition Costs) which is basically accounting-speak for the revenue share they pay to the partner sites where the ads actually appear. This is different from companies like Google and Yahoo! Ergo, Zynga spends more like $250 million on Facebook ads.

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IPO South Korea Venezuela Revenue 100

Berkonomics

NOVEMBER 23, 2023

Some rules about stock options and phantom stock: [Email readers, continue here…] The real insight here is that stock options or phantom stock are the tools of early-stage businesses used to attract great talent when there is not enough cash to pay market rates. How about multiple classes of stock?

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Equity Stock Options Vesting Early Stage 62

Up and Running

SEPTEMBER 20, 2021

And as the company grows, it brings on new people and may decide to issue stock options to attract new staff and funding from investors. A convertible note is like a loan, but this amount can be converted into company equity later on, usually during a liquidation event, like the acquisition of the company. Total share ownership.

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Cap Table Pre-Money Valuation Stock Options Option Pool 112

Scott Edward Walker

JULY 7, 2011

Redemption rights are principally designed to protect investors from a situation where, after a period of time, their portfolio company is just moving “sideways” and, accordingly, is not an attractive acquisition target or IPO candidate.

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Term Sheet Redemption Venture Capital Preferred Stock 49

YoungUpstarts

MAY 7, 2015

The tax savings can quickly accumulate and the cash can be used for reducing debt, capital investment or even making acquisitions. Fact: An S-corporation ESOP actually has a distinct advantage over non-ESOP companies due to exemption from federal/state taxes (more than 80% of states follow the federal rule).

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Stock Employee Private Equity Valuation 100