Scott Edward Walker

APRIL 9, 2012

Introduction We are in the golden age of seed financing. Venture capital funds, seed funds, super angels, angel groups, incubators, and “friends and family” are all playing the seed financing game and investing early in startups in an attempt to land the next Facebook. Why Can’t a Startup Issue Shares of Common Stock to Investors?

Preferred Stock 87

Preferred Stock Finance Common Stock Liquidation Preference 87

thestartuplawyer.com

FEBRUARY 24, 2010

He obviously never launched a startup and got shafted by a co-founder. He obviously never launched a startup and got shafted by a co-founder. He obviously never launched a startup and got shafted by a co-founder. You can start by examining every aspect of the co-founder relationship.

Cofounder 40

Cofounder Founder Preferred Stock Startup 40

Both Sides of the Table

APRIL 14, 2012

What I want to talk about today is one of the insider baseball discussions of our industry this past week: The odd fact of the $500 million financing round completed just before the company sold for a B. You are either bought for stock or for equity. You just said, “nobody would take 1-2% dilution.” Think about it.

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Valuation Balance Sheet Dilution Term Sheet 316

Altgate

MAY 24, 2012

But how well do most other founders do? Even as Facebook prepares to go public, Mark Zuckerberg, the founder and CEO, still owns 28% of his company. As a whole, Zuckerberg, his co-founders, and his former and present employees, own about 55% of Facebook. How did they do this? Fear vs. Greed. Third round: Raise $27.5

Pre-Money Valuation 43

Pre-Money Valuation Cofounder Dilution Valuation 43

Startup Company Lawyer

MAY 4, 2009

Adeo Ressi , the founding member of TheFunded , recently announced the establishment of TheFunded Founder Institute. The Founder Institute helps founders launch innovative companies by providing training, services, and company-building assignments, such as incorporating the business, filing provision patents, and setting up books and records.

Founder 28

Founder Warrant San Francisco Intellectual Property 28

venturehacks.com

MARCH 21, 2008

You get money, save stock, and amplify the advisor’s social proof in the process. 0.25% of a company’s post-Series A stock. Super advisors The super advisor can get as much stock as a board member: 1%-2% of a company’s post-Series A stock. Advisory shares are normal common stock. Compensation 7.

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Advisory Board Cap Table Vesting Equity 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 real question here is: why is it fair for founders to get so much more?

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Equity Employee Founder Cofounder 40

The Startup Lawyer

MARCH 1, 2010

“The Series Seed Documents are a standardized set of documents that can be quickly and easily deployed for a seed investment: to help get a company financed properly, legally, quickly, and intelligently.&#. 2) Series Seed Stock Preferred Stock Purchase Agreement. The IRA does not provide for any registration rights.

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Preferred Stock Term Sheet Redemption Registration Rights 79

Berkonomics

AUGUST 27, 2015

He has served as advisor to and member of numerous financial exchanges, and was the founder and CEO of Arthur Lipper Corporation and co-founder and Chairman of New York & Foreign Securities Corporation. Today he serves as Chairman of British Far East Holdings Ltd.

Intellectual Property 48

Intellectual Property Balance Sheet Stock Options Valuation 48

Startup Lessons Learned

JUNE 19, 2019

Andy Rachleff co-founded the venture capital firm Benchmark Capital in 1995. It was 20 to 30, not 100, because of the dilution from the capital. So we made a pact among the founders that when any of us reached the point that we weren't willing to go 110%, you had to opt out. It's literally impossible.

Silicon Valley 159

Silicon Valley Lean Venture Capital Pre-Money Valuation 159

Up and Running

JANUARY 17, 2011

As Facebook grew, founder Mark Zuckerberg traded share of ownership for investment money. You’ve seen ups and downs in major stocks and house prices, and in those markets it’s obvious. This chart shows how founders’ ownership gets diluted as a successful startup collects investment through various rounds.

Securities and Exchange Commission 74

Securities and Exchange Commission Dilution SEC Stock 74

Both Sides of the Table

APRIL 14, 2010

Liquidation preference is the amount of money that an investor gets paid before the common stock (e.g. management, founders, angel investors) get any money. It will usually be higher because the liquidation preference has a dividend so if the deal is long in the tooth assume that the liquidation preference might be $20-22 million.

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Venture Capital Liquidation Preference Common Stock Dividend 289

venturehacks.com

OCTOBER 21, 2010

You explain that the company currently has 6M shares outstanding so the investors must be valuing the company’s stock at $1.33/share: Reading on, the term sheet states, “The $8 million pre-money valuation includes an option pool equal to 20% of the post-financing fully diluted capitalization.&#

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Option Pool Pre-Money Valuation Dilution Warrant 68

The Startup Lawyer

FEBRUARY 4, 2011

But before your startup signs up and cashes that $[XX,000] check, your startup’s co-founders should sit down and evaluate the incubator’s offer. Most incubators take common stock and sit “side-by-side&# with the founders, but some may want some (weak) preferred stock and/or dilution protection.

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Incubator Pre-Money Valuation Option Pool Advisory Board 105

maplebutter.com

JANUARY 8, 2013

Whats is the best way to find a co-founder for your startup? However, one of my co-founders doesn’t seem to be as motivated as the rest of us. If you believe in it – then finance whatever you can yourself. If you’re looking to find / earn a technical co-founder then Andrew’s article is the best read.

Technical Review 44

Technical Review Startup Cofounder Software Review 44

The Startup Lawyer

MARCH 1, 2010

“The Series Seed Documents are a standardized set of documents that can be quickly and easily deployed for a seed investment: to help get a company financed properly, legally, quickly, and intelligently.&#. 2) Series Seed Stock Preferred Stock Purchase Agreement. The IRA does not provide for any registration rights.

Preferred Stock 40

Preferred Stock Term Sheet Redemption Registration Rights 40

Both Sides of the Table

FEBRUARY 14, 2016

I wonder whether LinkedIn’s stock market plunge in January 2016 might have a similar effect (to a lesser magnitude because the underlying company is still great). But it was a shock to the system to see such a beloved tech stock get so ravaged on valuation in a single day. Why Financing in Falling Markets is So Damn Difficult.

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Valuation Down Round Startup Later Stage 150

blog.simeonov.com

FEBRUARY 22, 2010

Simeon, can you tell us how you structure ownership and control so you can fire your co-founders if necessary? The first part will dispel some myths, address the lifecycle of founder agreements and the key compensation and control parameters in them. Let’s start by dispelling some myths: There is a standard founder agreement.

Founder 44

Founder Vesting Agile Startup 44

aweissman.com

JANUARY 30, 2010

There is an amazing wealth of innovation around early stage venture financing, most of which developed in just the past few years. Then there are new economic models - Founders Collective being the most prominent now, ("None of us have ever been bankers. If not, the value of the exchange fund is diluted.

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Early Stage Entrepreneur Cofounder Framework 46