Startup Professionals Musings

NOVEMBER 8, 2010

One of the first tough decisions that startup founders have to make is how to allocate or split the equity among co-founders. Another common “failure to start” situation I see is one where the “idea person” insists that the idea is 90% of the value (and 90% of the equity). Pre-existing intellectual property.

Equity 228

Equity Intellectual Property Cofounder CTO Hire 228

David Teten

JANUARY 21, 2021

(co-written with Jamie Finney, Founding Partner at Greater Colorado Venture Fund. This essay is part of a series on alternative VC: I: Revenue-Based Investing: a new option for founders who care about control. III: Why are Revenue-Based VCs investing in so many women and underrepresented founders?

Equity 78

Equity Revenue Cofounder Colorado 78

Startup Professionals Musings

APRIL 23, 2012

One of the first tough decisions that startup founders have to make is how to allocate or split the equity among co-founders. Another common “failure to start” situation I see is one where the “idea person” insists that the idea is 90% of the value (and 90% of the equity). Pre-existing intellectual property.

Intellectual Property 252

Intellectual Property Equity Cofounder CTO Hire 252

Agile VC

DECEMBER 4, 2014

I like to say that “there are only co-founders” — it’s extraordinarily rare for a successful business to have just a sole founder. But not all co-founders are equal in terms of title, ownership, responsibilities, and so forth. Sometimes co-founders put off the equity split question for some time.

Cofounder 255

Cofounder Equity Founder Sweat Equity 255

Feld Thoughts

SEPTEMBER 2, 2011

Jane and Dick, our fearless cofounders of SayAhh, have set up an accounting system and created their first set of financial statements. The founders each have common shares that will vest over four years. Equity is split 55% and 45%, but where is that officially recorded? Praveena wants to invest $20,000 and get 20% equity.

Cap Table 133

Cap Table CTO Hire Technical Cofounder Cofounder 133

David Teten

JANUARY 19, 2021

(co-written with Jamie Finney, Founding Partner at Greater Colorado Venture Fund. From RBI, Flexible VCs borrow the ability to reap meaningful returns without demanding founders build for an exit. From traditional equity VC, Flexible VC borrows the option to pursue and reap the rewards of an outsized exit. Of the Inc.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Startup Professionals Musings

FEBRUARY 27, 2023

Most aspiring entrepreneurs look to their alma mater, or any university, as a source of classes that can help them, but neglect to think outside the box or take advantage of all the other resources to be found there. Attract a co-founder and key team members. Access to entrepreneurs-in-residence, business mentors.

Arizona 276

Arizona Intellectual Property Accredited Investor Entrepreneur 276

Agile VC

DECEMBER 4, 2014

I like to say that “there are only co-founders” — it’s extraordinarily rare for a successful business to have just a sole founder. But not all co-founders are equal in terms of title, ownership, responsibilities, and so forth. Sometimes co-founders put off the equity split question for some time.

Cofounder 173

Cofounder Equity Founder Sweat Equity 173

Startup Professionals Musings

SEPTEMBER 27, 2023

When an entrepreneur first incorporates a business, they may find themselves the proud owner of 10 million shares of common stock, commonly called founder’s shares. every entrepreneur should incorporate early and file an 83(b) election with the IRS within 30 days of founding the company. Key founder vesting should have no cliff.

Stock 240

Stock .Net Vesting Founder Vesting 240

Up and Running

JUNE 14, 2012

Do I need a co-founder? These are some of the most frequent questions about co-founders that I have heard from entrepreneurs over the years. Do I need a co-founder? How many co-founders should I have? I have seen many successful companies with as few as 2 and as many of 11 co-founders.

Cofounder 90

Cofounder Technical Cofounder Accredited Investor Equity 90

YoungUpstarts

SEPTEMBER 23, 2017

Deciding whether to increase money or trade equity in the business for much needed assistance, could be a tough call. I raised money and traded equity, but with my venture, I had to make one of the toughest decisions, to build it with some assistance of co-founders. Find the right co-founders.

Cofounder 124

Cofounder Sweat Equity Equity Dilution 124

Startup Professionals Musings

MAY 8, 2022

Most entrepreneurs struggle with many startup founders quandaries in building their business, and these key dilemmas are probably the biggest source of pain and failure for the entrepreneur lifestyle. Should you start a company solo or find co-founders to help you? The co-founder relationship dilemma.

Founder 325

Founder Hockey Stick Cofounder Liquidity Event 325

Both Sides of the Table

MAY 9, 2011

I covered what I call “the co-founder mythology.&# Either you’re not technical and you think you need a technical co-founder or vice-versa. Conventional wisdom says that you gain far more in working as a team than you lose by diluted by half before you start. Hire your co-founder.

Cofounder 393

Cofounder Founder Vesting Founder Vesting 393

David Teten

DECEMBER 2, 2019

Now the bad news: some venture capitallists have a bias against startups with an explicit positive social impact, on the grounds that they have a smaller addressable market, and that the founders are not sufficiently focused on creating shareholder wealth. If you think I’ve missed any, please contact me. Aspen Tech Policy Hub.

Technical Review 60

Technical Review SBIR Dilution Silicon Valley 60

Both Sides of the Table

JANUARY 4, 2014

Nowhere is the politics more difficult than with co-founders, which is why for years I’ve spoken publicly about “ the co-founder mythology.” ” Of course we all go into businesses expecting to be aligned with our co-founders but over time life changes. Equity for the future?

Founder 340

Founder Sacramento Cofounder Technical Review 340

thinkspace.com

SEPTEMBER 7, 2012

How to Divide Equity to Startup Founders, Advisors, and Employees. The part that I’d like to zero in on is when you’ve got a high growth company what are some of the best practices out there to distribute equity to the founders, advisors, and employees? Equity for Founders. Equity for Employees.

Equity 62

Equity Employee Founder CTO Hire 62

View from Seed

DECEMBER 4, 2014

Editor’s note: Understanding how to divide founder equity at a startup can be tricky, even to the point of reaching emotional riffs between founders. Below, Lee Hower offers advice for approaching these equity discussions objectively and properly.

Equity 315

Equity Founder Sweat Equity Cofounder 315

Startup Professionals Musings

JANUARY 15, 2021

When an entrepreneur first incorporates a business, they may find themselves the proud owner of 10 million shares of common stock, commonly called founder’s shares. every entrepreneur should incorporate early and file an 83(b) election with the IRS within 30 days of founding the company. Key founder vesting should have no cliff.

Vesting 298

Vesting Dilution Stock Founder Vesting 298

David Teten

OCTOBER 1, 2015

Should you co-found your company with a software development shop? I’ve seen a range of options for supporting entrepreneurs, which I can rank from least to most involvement in companies by investors: financier VCs, e.g., Correlation Ventures. The question is: how should they be compensated when cofounding a company? The cliffs?

Software Developers 60

Software Developers Software Development Software Review Technical Cofounder 60

Gust

APRIL 11, 2014

Let’s get right down to business: Dilution of founders’ and other early shareholders’ equity in startups is frequently a subject of intense interest and debate. That’s the concept of what some call mathematical dilution. That is not economic dilution, but rather its opposite ( accretion ).

Dilution 162

Dilution Equity Pre-Money Valuation Prospectus 162

David Teten

AUGUST 19, 2019

This structure offers some of the benefits of traditional equity VC, without some of the negatives of equity VC. I’ve been a traditional equity VC for 8 years, and I’m now researching new business models in venture capital. For background, see Revenue-Based Investing: A New Option for Founders who Care About Control.

Revenue 60

Revenue Technical Review Software Review Equity 60

Business Plan Blog

OCTOBER 4, 2013

If you have a technical background and you are focused on product development, consider a co-founder with a sales and marketing background that can focus on selling your world class product. This helps to better divide the work, make people accountable, and show investors just why each founder/hire is key to the organization.

Part-Time VPE 79

Part-Time VPE Fractional VPE Cofounder CTO Hire 79

Both Sides of the Table

SEPTEMBER 17, 2011

I’d say about 80% of the experienced entrepreneurs & VCs I know privately agreed with me. “We’re all equal co-founders and we don’t care about titles.&# I usually encourage people to think about titles like, “Founder & CTO&# or “Founder & VP Marketing.&#.

Operations 292

Operations CTO Hire Startup Early Stage 292

View from Seed

APRIL 30, 2015

What is it, and how should founders think about it? Glen Mello: Venture debt is a good complement to equity. It’s generally got a lower cost compared to equity capital and can help support growth. So it makes it a lot more challenging when you have debt on the books that isn’t as longer term as equity.

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Term Sheet Equity Startup Seed Stage 120

YoungUpstarts

OCTOBER 24, 2013

One of the challenges for investing in startups has always been the lack of an established way for founders and investors to actually measure and decide on the valuation of the startup concerned. “If you are an angel investor and a venture is seeking capital from you, insist on getting its Worthworm report.

Pre-Money Valuation 150

Pre-Money Valuation Web Technical Review Angel Investor 150

Both Sides of the Table

AUGUST 3, 2010

There is a telltale sign of an inexperienced startup entrepreneur. years ago and told me, “I just got offered the chance to buy this company because the founder doesn’t want to continue. I can save tons of development time and I think I can buy it for all equity. Me: “Zero dilution. I understand this.

Merger 276

Merger Technical Review Early Stage Dilution 276

Startup Professionals Musings

DECEMBER 14, 2014

Most entrepreneurs struggle with many startup Founders dilemmas in building their business, and these key dilemmas are probably the biggest source of pain and failure for the entrepreneur lifestyle. Should you start a company solo or find co-Founders to help you? The co-Founder relationship dilemma.

Hockey Stick 268

Hockey Stick Cofounder Entrepreneur Liquidity Event 268

Startup Professionals Musings

AUGUST 10, 2019

Most entrepreneurs struggle with many startup founders quandaries in building their business, and these key dilemmas are probably the biggest source of pain and failure for the entrepreneur lifestyle. Should you start a company solo or find co-founders to help you? The co-founder relationship dilemma.

Hockey Stick 243

Hockey Stick Cofounder Liquidity Event Startup 243

Austin Startup

FEBRUARY 4, 2019

L to R: Tiara Zolniez (Co-Founder & Sales), Dr. Roshawnna Novellus (Co-Founder & CEO), Alisha Griffey (COO) The Forrest Four-Cast: February 4, 2019 Fifty diverse startups will aim to impress a panel of judges and a live audience with their skills, creativity and innovation at SXSW Pitch Presented by Cyndx.

Startup 50

Startup Cofounder Technical Review Equity 50

The Next Web

OCTOBER 3, 2012

Andrew is the co-founder and CTO of Parse.ly , a technology startup that provides big data insights to the web’s best publishers. He wrote: When startups die, the official cause of death is always either running out of money or a critical founder bailing. Editor’s note: This is a guest post by Andrew Montalenti.

Cofounder 155

Cofounder Technical Cofounder Technical Review Software Review 155

Startup Professionals Musings

MAY 30, 2020

Most aspiring entrepreneurs look to their alma mater, or any university, as a source of classes that can help them, but neglect to think outside the box or take advantage of all the other resources to be found there. Attract a co-founder and key team members. Access to entrepreneurs-in-residence, business mentors.

Arizona 310

Arizona Intellectual Property Accredited Investor Dividend 310

Altgate

DECEMBER 15, 2010

@altgate Startups, Venture Capital & Everything In Between Skip to content Home Furqan Nazeeri (fn@altgate.com) ← No one wants to tell you your baby is ugly More on Liquidation Preferences → Pre-Money Valuation vs Number of Founders Posted on December 15, 2010 by admin Here’s a chart of the day worth sharing.

Pre-Money Valuation 66

Pre-Money Valuation Valuation Cofounder Founder 66

www.inc.com

SEPTEMBER 24, 2011

Entrepreneur news from reporter Eric Markowitz. Should You Share Equity with Consultants? To grow his cash-strapped start-up, Parker ended up sharing equity -- not only with employees, but also with consultants and vendors. Parker found that equity as compensation helped build loyalty to his company -- even among consultants.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

Startup Professionals Musings

AUGUST 19, 2017

Most entrepreneurs struggle with many startup founders dilemmas in building their business, and these key dilemmas are probably the biggest source of pain and failure for the entrepreneur lifestyle. Should you start a company solo or find co-founders to help you? The co-founder relationship dilemma.

Hockey Stick 144

Hockey Stick Cofounder Entrepreneur Liquidity Event 144

Agile VC

JULY 11, 2012

in equity & loans which was ultimately worth >170x ($355M) when DEC went public about a decade later. Some disgruntled younger partners left in the mid-90s… two co-founded Benchmark Capital (Bruce Dunlevie & Andy Rachleff). Big success was Digital Equipment Corporation (DEC), in which ARD invested about $2.1M

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Silicon Valley Carried Interest Cofounder Boston 240

NZ Entrepreneur

JULY 12, 2018

We often see single founders slogging it out on their own. Founders can be reluctant to give up equity and control of their idea to bring in a co-founder alongside them to share in the decision making, as well as the highs and lows. Do you really need a co-founder? In fact, the average start-up had 1.72

Cofounder 44

Cofounder Founder Vesting Cap Table 44

www.quora.com

SEPTEMBER 22, 2011

Type to Add and Search Questions; Search Topics and People Startups Startup Compensation Entrepreneurship Compensation Stock Options Major Internet Companies Silicon Valley Why is there such a large founder to early employee equity drop-off? The barrier between entrepreneur and money (incubators, angels, etc.) is lowered.

Equity 40

Equity Employee Founder Cofounder 40