Both Sides of the Table

AUGUST 14, 2017

I read commentary or Twitter or blogs and realize that there are also strongly held convictions that there are these evil VCs who do terrible things to mostly altruistic founders. Executives run the day-to-day so often the board is more involved as a sparring partner at key intervals. That’s true.

Cofounder 217

Cofounder Stock Options Equity Technical Review 217

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. By tying payments to actual revenues, founders and investors remain aligned around the company’s real-time performance, good or bad.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

View from Seed

APRIL 30, 2015

What is it, and how should founders think about it? note: We’d like to be extra clear that founders should not take on venture debt if they don’t have 100% visibility into repaying the loan, as banks that need to recoup their loan my force the company or you as the guarantor into liquidation or bankruptcy.

Term Sheet 120

Term Sheet Equity Startup Seed Stage 120

Both Sides of the Table

APRIL 27, 2014

Co-founder discontent. Reference checking is to confirm or disprove a strong, positive intuition you already have about founders that could lead to an investment or a pass. What would this founder do if he got an offer to be acquihired quickly by Facebook? Co-investors are critical. Health destroying stress.

Cofounder 374

Cofounder Syndicate Syndication Early Stage 374

Startup Company Lawyer

MARCH 14, 2010

Founders Institute Plain Preferred Term Sheet (by WSGR – disclaimer, I represent the Founders Institute and was involved in drafting this document). If new investors get better rights in a future equity financings (such as registration rights, price-based anti-dilution, redemption rights, etc.), Anti-dilution protection.

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

David Teten

NOVEMBER 17, 2011

Download the Startup Options Valuation model here. In particular, this model is designed to help all team members understand the impact of dilution on their options. Such a model is particularly helpful for those founders looking for a co-founder or key employee. I couldn’t find one online, so I built it.

Employee 155

Employee IRR Startup Mexico 155

www.inc.com

SEPTEMBER 24, 2011

Durkin , managing partner with the Boston -based law firm Lucash, Gesmer & Updegrove LLP. Chip Morse , cofounder and partner with Morse, Barnes-Brown & Pendleton P.C., Besides the future potential earnings youre forgoing, youre also diluting your own ownership in the company. FROM OUR PARTNERS. ); ); ); ADVERTISEMENT.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

Ben's Blog

AUGUST 17, 2020

When speaking with founders and private growth investors, we hear countless references to “multiples paid” on current or near-term revenue; both obsess over this because a higher multiple translates to a higher valuation. It starts with the complexity involved in valuing companies in general.

Valuation 36

Valuation Balance Sheet Cofounder Forecast 36

VC Cafe

SEPTEMBER 26, 2010

Very cool concept and I want to thank the founder Adil Mohammed for inviting me to take part in it. I’ve learned this first hand from Mark Gerson, the founder of Gerson Lehrman Group. As the founder, you’re the number one sales person of the company and it is not a function you can outsource right away.

Elevator Pitch 103

Elevator Pitch Incubator Technical Review Startup 103

View from Seed

JANUARY 28, 2016

On Wednesday, my partner David wrote about how we’ve been using our office space (and network and other resources) to support pre-seed companies. As a founder, you and your team are building value every day, but there are certain step-function moments where the value creation significantly increases. You can find that here.

Cofounder 120

Cofounder Finance Founder Syndicate 120

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

blog.nahurst.com

JULY 19, 2010

The graphic below balances the risks cofounders take with their relative contributions to help answer this question. This covers one of the most common situations I encounter: For a pre-funding web startup whose team includes only a non-technical cofounder, how much equity should an incoming technical cofounder get?

Technical Cofounder 43

Technical Cofounder Cofounder Equity Salary 43

VC Cafe

SEPTEMBER 6, 2011

But here it’s not enough to relay on secondary research – get out there and speak to potential customers, partners and even competitors – gather evidence and interest. A startup is a lot of work, and one person will have a hard time executing on all the different tasks ahead.

Startup 133

Startup Cofounder Warrant Stock Options 133

Both Sides of the Table

APRIL 14, 2010

management, founders, angel investors) get any money. I once told an entrepreneur in whom I was going to co-invest with a VC that brought me a deal and the CEO was considering changing that firm out, “I came to this dance with one VC and I’m leaving with that VC. But pass they will. Brain damage. Reputation.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Pre-Money Valuation 289

Both Sides of the Table

APRIL 3, 2010

First, if the VC does 15-20 of these under one partner then it is certain he can’t spend any time with these investments. Third, he notes that even if they do invest they’re likely to do so at a lower price because you can’t truly get an independent valuation. That founder wasn’t one of your angels.

Venture Capital 265

Venture Capital Term Sheet Early Stage Silicon Valley 265

venturehacks.com

SEPTEMBER 22, 2011

Offers from top-tier firms increase your valuation. When you evaluate a candidate, ask yourself whether she is likely to increase the next round’s share price (include the dilution of her market rate options). Offers from top-tier firms increase your valuation. We previously posted a table of market rates for employees.

Equity 40

Equity Cap Table Valuation RSS 40

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. Should founders have anti-dilution rights?

Equity 62

Equity Employee Founder CTO Hire 62

Both Sides of the Table

FEBRUARY 25, 2010

We were trying to optimize around a few criteria: price, size of round, number of syndicate partners and, of course, terms. million at a $15 million pre-money valuation. But we weren’t optimizing for dilution – we were building a $1 billion+ company and we wanted the runway to succeed. We ended up agreeing a term sheet for $16.5

Technical Review 301

Technical Review Term Sheet Due Diligence Venture Capital 301

Rob Go

JANUARY 28, 2016

On Wednesday, my partner David wrote about how we’ve been using our office space (and network and other resources) to support pre-seed companies. As a founder, you and your team are building value every day, but there are certain step-function moments where the value creation significantly increases. You can find that here.

Cofounder 28

Cofounder Finance Founder Syndicate 28

betashop.com

OCTOBER 8, 2012

This past week while I was in Tokyo for meetings with potential partners for Fab, I was invited to participate in a panel discussion on startups. million registered users, 7500 supplier partners, 600 team members, and a run-rate of more than $150M in sales in just 15 months. Founders need to personally own something big themselves.

Technical Review 108

Technical Review Technology Software Review Valuation 108

Both Sides of the Table

FEBRUARY 14, 2016

I have been talking about my concerns about valuations for the past couple of years because, well, they’ve been rising very rapidly the past two years! ” “Mark has a vested interest in talking down valuations of startups.” Do Investors WANT Valuations to Drop? The Motive for Speaking Up. Mostly, no.

Valuation 150

Valuation Down Round Startup Later Stage 150

venturehacks.com

OCTOBER 21, 2010

Use a hiring plan to justify a small option pool, increase your share price, and increase your effective valuation. 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.&# Don’t lose this game.

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68

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. The venture capitalists said, "Okay, let the angels invest at a $5 million valuation and take all of that market risk. We'll invest at a $50 million valuation.

Silicon Valley 159

Silicon Valley Lean Venture Capital Pre-Money Valuation 159