Hunter Walker

MAY 13, 2023

Those who do, often believe they can hire from the open market without the hassle of an acquisition. Cash is at a premium so it’s not going to cap tables (preferred or common walk away from the deals with no dinero). Not in today’s market conditions. Again, not really in this market. Emotional I guess.

Early Stage 117

Early Stage Cap Table Acquisition Sales 117

Up and Running

JULY 2, 2014

You can’t underestimate the importance of selecting an attorney who “gets” your business model, your market opportunity, and most importantly, your fundraising and exit strategy. This should be clearly spelled out in your Capitalization Table , or “Cap Table” as it’s commonly called.

Technical Review 118

Technical Review Angel Investor Due Diligence Dilution 118

VC Adventure

AUGUST 15, 2018

As is true today, there was a requirement that options be priced at or above the “fair market value” of the underlying stock (otherwise there would be tax consequences to the optionee and sometimes to the company as well). At the time, the cost of each of these valuations ran between $10,000 and $15,000 annually for each company.

Valuation 48

Valuation Common Stock Cap Table Software Review 48

Both Sides of the Table

MAY 19, 2018

When you raise money from investors you produce information that you are told they want and care about: A fund-raising deck that articulates your company strategy, plans, team, market, competitors and so forth. I never thought of this until I became the Founder & CEO of my first startup company. So how does this work in practice?

Cap Table 336

Cap Table Due Diligence Forecast Churn Rate 336

Hunter Walker

SEPTEMBER 15, 2023

And while I’m quite optimistic about the coming years, we’re not yet through the pain for many existing companies navigating the transition from a hypergrowth market to one which rewards a different style of operating. When $20B outcomes occur everyone on the cap table eats well. It’s just math.

Cap Table 93

Cap Table Valuation Salary Seed Stage 93

Austin Startup

AUGUST 20, 2017

Are they consistent with your founding team, are they competitive in the market, and will they not create precedents that you’ll regret in the next round of hiring? Your Cap Table is something that deserves constant care and attention. Messy cap tables can come back to haunt you when you do a financing or sell the company.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

Altgate

JUNE 25, 2012

Instead, the dead equity languishes on the cap table, weighing down the startup and making it harder to attract and motivate the people who could impact its growth. How does our timeframe change as market conditions change? Facebook’s situation is far from unique, even among recent tech IPOs.

Equity 44

Equity Vesting Cap Table Technical Review 44

David Teten

NOVEMBER 14, 2019

Some firms provide tools to do this online, e.g., Capital ’s Cost of Equity estimator ; Lighter Capital’s Cost of Capital Calculator ; 645 Ventures’ cap table simulator. These options provide you capital and also market validation for desire for your product. . Small Business Association Loans.

SBIC 60

SBIC SBA Cap Table Database 60

Both Sides of the Table

JANUARY 21, 2010

Consider it a sales & marketing expense for them. How to manage costs - One of the biggest frustrations that people have with lawyers are unexpected costs. Most lawyers that work with startups are willing to work on a deferred payment schedule. They want to lock in future clients at an early stage.

Southern California 318

Southern California Silicon Valley IP Stock Options 318

David Teten

AUGUST 19, 2019

Repaid 12-36 months with ability to prepay at reduced cost. For RBI, return caps of 1.2x-1.8x The mode purpose for funding is (in order of frequency) Sales, Marketing, Market Expansion, Product Development, and Hiring Employees. Limited amount of existing debt and a clean cap table”. over next 12 months.

Revenue 60

Revenue Technical Review Software Review Equity 60

Steve Blank

APRIL 8, 2010

They collected information that justified their assumptions about the problem, opportunity, market size, their solution and competitors and the their team, They rolled up a 5-year sales forecast with assumptions about their revenue model, pricing, sales, marketing, customer acquisition cost, etc.

Business Model 331

Business Model Business Plan Customer Cap Table 331

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. Even if there’s some kind of product in the market during the first round of financing, it’s probably to be unproven.

Seed Stage 331

Seed Stage Cap Table Metrics Burn Rate 331

View from Seed

AUGUST 6, 2015

When someone goes to work for an early startup, the compensation package general includes an annual salary, health insurance, and, instead of fixed-cost performance upside, a percentage of unvested options to purchase equity in the company. This is not an argument for circulating the entire cap table or compensation calendar.

Equity 120

Equity Employee Cap Table Stock Options 120

View from Seed

AUGUST 6, 2015

When someone goes to work for an early startup, the compensation package general includes an annual salary, health insurance, and, instead of fixed-cost performance upside, a percentage of unvested options to purchase equity in the company. This is not an argument for circulating the entire cap table or compensation calendar.

Equity 120

Equity Employee Cap Table Stock Options 120

Altgate

AUGUST 25, 2012

Instead, the dead equity languishes on the cap table, weighing down the startup and making it harder to attract and motivate the people who could impact its growth. How does our timeframe change as market conditions change? Facebook’s situation is far from unique, even among recent tech IPOs.

Equity 28

Equity Vesting Cap Table Technical Review 28

Hippoland

OCTOBER 18, 2018

(basically buy you as a user) In some sense, their businesses are “easier” on the supply side than the current ride-sharing market, because they can manufacture more scooters and don’t rely on people to drive them. In the ride-sharing market, supply is basically a zero-sum game. They can create infinite supply.

Bootstrapping 90

Bootstrapping Cap Table Salary .Net 90

Haystack

AUGUST 18, 2019

If you’ve been following my tweets lately, you’ve read some of my quick musings on the state of the seed market this summer. years is not a long arc – I have not experienced a prolonged down market as a private investor. We know private markets hold the key to 100x or even 1,000x multiples. In short, in my 6.5

Seed Stage 108

Seed Stage Cap Table Early Stage Malaysia 108

The Equity Kicker

MARCH 21, 2017

There is clearly dysfunction in chasing growth at all costs – inherently unprofitable companies grow to employ thousands of people before going bust, resulting in much personal anguish and not a little wasted capital. That’s because there’s no money in solving them (otherwise the market would have been solved already).

San Francisco 90

San Francisco Cap Table Angel Investor Valuation 90

keen.io

FEBRUARY 5, 2013

And if the CEO says, “Salaries will be adjusted to market value soon,” that’s probably a best-case scenario. If this were like one of the strategy board games we regularly play, I’d be trying to win at all costs, giving my friends bad advice and hoping they’d screw up their trades. So I knew a little bit.

Salary 50

Salary Equity Startup San Francisco 50

David Teten

SEPTEMBER 23, 2017

The extreme example of this are algorithmic investors in the public markets, who design algorithms which trade on the designer’s behalf, as opposed to making trading decisions directly. High-frequency trading, algorithmic by its nature, is estimated to account for at least 50% of US equity markets trading volume. . 1) Market fund.

Private Equity 60

Private Equity Venture Capital Equity Technical Review 60

Eric Friedman

JUNE 27, 2016

I have seen what I call “predatory advisors” come in and really mess up a cap table by promising big intros and sales contracts only to disappear after the first 6-12 months. Setting The Option Strike Price Above Fair Market Value. Remember when I talked about getting an advisor that can 10X a business?

Equity 98

Equity Vesting Cap Table Common Stock 98

This is going to be BIG.

DECEMBER 3, 2020

Depending on the minimum investment size, if you think about what hiring an actual analyst, or someone more senior, might cost you to look at deals you’re serious about, an investment in a fund could may for itself in access. Less than that and you need something else to bring to the table. b) Reputation for adding value.

Portfolio 134

Portfolio Syndicate Syndication Deal Flow 134

Hippoland

OCTOBER 18, 2018

(basically buy you as a user) In some sense, their businesses are “easier” on the supply side than the current ride-sharing market, because they can manufacture more scooters and don’t rely on people to drive them. In the ride-sharing market, supply is basically a zero-sum game. They can create infinite supply.

Bootstrapping 48

Bootstrapping Cap Table Salary .Net 48

David Teten

DECEMBER 3, 2019

In liquid markets, most of the calories expended on technology and analytics are focused on trade selection, or “ origination ”. I use another live Google doc to maintain my database of companies I’m marketing to other VCs. 2) Market . Many tools designed for B2B marketing in general are also relevant to investors.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Up and Running

APRIL 25, 2014

Business plans reduce risk by forcing entrepreneurs to document not only what they know about their product and their target market, but also what they don’t know. Does your target market like your product or service? Does your go-to-market strategy work? How much is it going to cost to deliver your product or service?

Silicon Valley 104

Silicon Valley Business Plan Entrepreneur Cap Table 104

Feld Thoughts

SEPTEMBER 7, 2010

I pointed out that their market reputation was that they didn’t do seed investments nor did they do many Series A investments. And, in each case, his firm had decided not to follow on, took themselves out of the cap table, and the three companies were able to raise additional financing (in one case from a different VC firm.).

Cap Table 134

Cap Table Reputation Finance Programming 134

Both Sides of the Table

FEBRUARY 8, 2016

And when prices are dropping on a VCs existing companies in market, there is a substantial reduction in FOMO (fear of missing out) for new deals, which means that investors take their time in making investment decisions. Pragmatic cost cuts are always possible and often productive. Give yourself enough runway but controlling costs.

Burn Rate 150

Burn Rate Cap Table Balance Sheet Valuation 150

David Teten

AUGUST 21, 2019

Lower processing cost. Much lower cost of capital, if company is highly successful. The cost of VC funding to a unicorn CEO can easily be the equivalent of paying well over 100% annual interest. A company with that mindset is dramatically less risky, because it’s not dependent on the financing markets for continued viability.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

Feld Thoughts

AUGUST 12, 2011

Revenues and costs should both be based off of a robust set of assumptions. Anytime the financial model indicates that SayAhh will run out of cash, determine how you will raise capital to ensure liquidity and be sure to properly account for the debt or equity transaction on the balance sheet and Cap Table. historical data).

Balance Sheet 136

Balance Sheet Forecast Cap Table Early Stage 136

Austin Startup

SEPTEMBER 4, 2017

Do you need to pour more dollars into marketing and PR? Are you marketing in the right places? Meanwhile his or her market segment moves on. If you do eventually expose your company to those professionals, all your dumb shareholders will get crushed in the new cap table. I could go on.

Cap Table 48

Cap Table Austin PR Founder 48

This is going to be BIG.

JUNE 2, 2010

That being said, is it me, or do more and more entrepreneurs seem to out there in the market essentially skipping the 500k-ish angel round? You try to do too much, overhire, overmarket, and you start to believe that your market is a landgrab. “We We need to go faster!” How many losers were there who mis-executed along the way?

Cap Table 106

Cap Table Seed Stage .Net Venture Capital 106

The Next Web

OCTOBER 7, 2013

Layer on the opportunity cost of choosing not to pursue lucrative alternatives offered elsewhere, and it’s easy to see how, if not under the right terms, the engineer #1 position is less than appealing. Cap tables sound intimidating. That is your opportunity cost. How do you feel about that number?

Engineer 129

Engineer Dilution Option Pool Vesting 129

venturehacks.com

SEPTEMBER 22, 2011

You have to pay market rates regardless of the equity equation. Consider the opportunity cost of spending shares on employees and investors. You have to pay market rates regardless of the equity equation. And you have to pay a market rate no matter what the equity equation says. We have some additional thoughts.

Equity 40

Equity Cap Table Valuation RSS 40

Hunter Walker

SEPTEMBER 5, 2021

Startup CEOs Should Test Strength of Cap Table Every ~6 Months To Know Where They Stand. No founder should assume their pro rata from insiders is in the bag, let alone a bridge check, only because the cost of being wrong (to the company) is so high. Go read it and then come back here….

Cap Table 94

Cap Table Seed Stage Syndicate Syndication 94

Hunter Walker

JULY 18, 2022

Multiples dropped in public and private markets, growth expectations were cut, and business models with high spend for promise of future ROI became quite unfavorable. But you need to remain great and investable while also managing your costs, extending your runway, tightening your operating plan, and so on. Top line growth and margin.

Valuation 116

Valuation Cap Table Startup Later Stage 116

www.payne.org

SEPTEMBER 22, 2011

The re-heating of the venture funded tech market has pushed a heat up of the hiring market, and Im getting more calls from friends asking for help understanding startup stock (equity) offers. Buying your stock would cost $200,000! The other factor is the "cap table" (capitalization table, or summary of who owns what stock).

Equity 56

Equity Employee Vesting Preferred Stock 56

David Teten

OCTOBER 1, 2015

I’ve been looking for suggestions for an initial deal structure that is appropriate for the theoretical case of a trusted dev shop putting in $100k in market-value of services over a 6 month period in time. Accounting for those resources as “investment” at fair market value is a pretty straightforward way to value contribution.

Software Developers 60

Software Developers Software Development Software Review Technical Cofounder 60