Creative Common Stock

ithacaVC

A cap table is a written record (in Excel, for example) of who owns stock in your company. It lists every owner out by amount owned, type of stock (common or preferred), and date purchased. One rule of simple cap tables is to issue “normal” stock to founders (common stock only) and investors (typically preferred stock, but sometimes common stock to early friends and family). I am a huge fan of simple cap tables.

Dual Class Common Stock Structure for Founders

The Startup Lawyer

A startup founder’s desire to hold equity better than plain-vanilla common stock isn’t new. Several years ago, Series FF stock for founders was all the rage when it came to founder liquidity at subsequent financing rounds. We implemented Series FF for a handful of clients back then but we haven’t done so recently. In the past couple years, we’ve … Continue reading → Incorporation

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Common Stock vs. Preferred Stock in Venture Funding Transactions

Growthink Blog

The question is whether they need to issue common or preferred stock. The answer depends on how and what rights are defined in the preferred stock. One very popular "preferred right" or "preference" that adds very significant value to outside investors and is common in venture capital investments is a liquidation preference. The liquidation preference means what is sounds - namely that preferred stock holders with this right get all of their money back (i.e.

8 Ways To Maximize The Value Of Your Startup Stock

Startup Professionals Musings

When an entrepreneur first incorporates his or her business, he or she may find him or herself the proud owner of 10 million shares of common stock, commonly called founder’s shares. Every entrepreneur needs to understand the following basics, to be addressed at company formation, as they engage a qualified attorney to draw up the paperwork: Allocate founder’s stock commensurate with commitment. Make sure the government waits for a stock sale to collect taxes.

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What is Class F common stock?

Startup Company Lawyer

These provisions include a special class of super-voting common stock, called “Class F&# common stock, which is named for “Founders.&#. The COI includes Class A common stock, which has one vote per share, and Class F common stock, which has 10 votes per share. Companies such as Google , Martha Stewart Living Omnimedia , Broadcom and others have super-voting common stock.

Founder Liquidity

K9 Ventures

If there is one piece of advice I would give to the founders of BST, it is to consider selling a part of their personal stock in the company at that stage. If things go well, and your company succeeds beyond your wildest dreams, it will end up being the most expensive house ever (because you could have held your stock and made a lot more on it). 3) Setting a precedent for the price of the Common Stock : This is the biggest issue with founder liquidity.

Founder Liquidity

K9 Ventures

If there is one piece of advice I would give to the founders of BST, it is to consider selling a part of their personal stock in the company at that stage. If things go well, and your company succeeds beyond your wildest dreams, it will end up being the most expensive house ever (because you could have held your stock and made a lot more on it). 3) Setting a precedent for the price of the Common Stock : This is the biggest issue with founder liquidity.

How Many Shares Should be Issued to Founders at Incorporation?

The Startup Lawyer

I typically advise issuing 50% to 80% of the authorized shares of Common Stock to the initial founders upon incorporation. Thus, if the certificate of incorporation authorizes 10,000,000 shares of Common Stock, an aggregate of 5,000,000 to 8,000,000 share should be issued at incorporation. If the startup plans to bring on additional founders in the […]. Incorporation

Startup Stock Options – Why A Good Deal Has Gone Bad

Steve Blank

For most startup employee’s startup stock options are now a bad deal. Why Startups Offer Stock Options. In tech startups stock options were here almost from the beginning, first offered to the founders in 1957 at Fairchild Semiconductor , the first chip startup in Silicon Valley. As Venture Capital emerged as an industry in the mid 1970’s, investors in venture-funded startups began to give stock options to all their employees. Like stock options, RSU’s vest.

How To Prevent Your Founder’s Shares From Vaporizing

Startup Professionals Musings

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. Make sure the government waits for a stock sale to collect taxes. This is called stock dilution control.

How to Divide Founder Equity: 4 Criteria to Discuss

View from Seed

Additionally, you should put whatever agreement you reach to paper , even if you have not yet incorporated or had your legal counsel draw up the founder stock paperwork. You can then work with your law firm to formally draw up founder common stock paperwork either then or subsequently. For example, when we started LinkedIn at the end of 2002, each member of the founding team essentially had a couple chunks of founders’ common stock.

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Upland Software Files IPO

Austin Startup

Securities and Exchange Commission for a proposed initial public offering of its common stock in an effort to raise $50M in capital. Upland Software, Inc. will soon join the rarefied air of Austin-based public companies. The company announced that it has filed a registration statement on Form S-1 with the U.S. It was founded by Jack McDonald, former CEO of Perficient, and Chairman of the Greater Austin Chamber of Commerce. Enterprise IPO upland

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Expedia to Buy HomeAway for $3.9 Billion

SiliconHills

Under the terms of the deal, Expedia will offer to acquire each outstanding share of HomeAway’s common stock […] The post Expedia to Buy HomeAway for $3.9 Expedia, based in Bellevue, Washington, announced Wednesday plans to buy Austin-based HomeAway in a deal worth about $3.9 billion. That represents a per share price for HomeAway of $38.31, based on Expedia’s closing price on Nov.

Rackspace Officially Goes Private in $4.3 Billion Deal

SiliconHills

Its common stock, under the symbol RAX, will no longer be listed for trading on the […] The post Rackspace Officially Goes Private in $4.3 It’s the start of a new era for Rackspace, San Antonio’s largest technology company, which Thursday officially became a private company following the completion of its $4.3 billion acquisition by Apollo Global Management, with investment by Searchlight Capital Partners.

Punch & Pie: How Should Co-Founders Divide Equity?

Agile VC

Additionally, you should put whatever agreement you reach to paper, even if you have not yet incorporated or had your legal counsel draw up the founder stock paperwork. You can then work with your law firm to formally draw up founder common stock paperwork either then or subsequently. For example, when we started LinkedIn at the end of 2002, each member of the founding team essentially had a couple chunks of founders’ common stock.

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Payment Data Systems to Begin Trading on the NASDAQ Stock Market

SiliconHills

San Antonio-based Payment Data Systems, which processes online payments for other companies, announced Tuesday that it has received confirmation that its common stock will begin trading on the NASDAQ Capital Market starting Aug. In addition, Michael Long, chairman and CEO of Payment Data Systems and Louis Hoch, the company’s president, will ring the opening […] The post Payment Data Systems to Begin Trading on the NASDAQ Stock Market appeared first on SiliconHills.

Startup Financing: Overview of Preferred Stock

Early Growth Financial Services

From time to time on Founders Workbench we give a brief primer on common terms and issues in venture financings. Today, we’re tackling participating versus non-participating preferred stock, a fundamental economic term in VC deals that goes to the heart of the business agreement between investors and management in connection with a sale of the company. This post by Ian Engstrand first appeared on Founders Workbench.

Punch & Pie: How Should Co-Founders Divide Equity?

Agile VC

Additionally, you should put whatever agreement you reach to paper, even if you have not yet incorporated or had your legal counsel draw up the founder stock paperwork. You can then work with your law firm to formally draw up founder common stock paperwork either then or subsequently. For example, when we started LinkedIn at the end of 2002, each member of the founding team essentially had a couple chunks of founders’ common stock.

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Founder’s Stock Is Gold, If You Know The Rules

Startup Professionals Musings

In reality, so-called “Founder’s” shares are simply common stock, issued at the time of startup incorporation, for a very low price, and normally allocated to the multiple initial players commensurate with their investment or role. Even though the class is common stock, Founders can negotiate special vesting and other terms as part of their stock restriction agreement upon venture investment. Stock dilution control.

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Payment Data Systems Buys Akimbo of San Antonio for $3 million

SiliconHills

Payment Data Systems is buying the company with common stock in two tranches with up to $300,000 in cash if any liabilities are assumed. Payment Data Systems, an online payments company, announced Tuesday it has acquired Akimbo Financial for $3 million. Akimbo, founded in 2010, has raised $850,000 in investment. The company, based at Geekdom, […] The post Payment Data Systems Buys Akimbo of San Antonio for $3 million appeared first on SiliconHills.

SolarWinds Announces $50 Million Stock Buyback

SiliconHills

Austin-based SolarWinds announced Monday that the software company plans to repurchase up to $50 million worth of its common stock. The post SolarWinds Announces $50 Million Stock Buyback appeared first on SiliconHills. “This share repurchase reflects the confidence of our management team and board of directors in the long term growth strategy that we have laid out and are executing on for SolarWinds,” Kevin Thompson, the company’s [.]

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Female Founders! Pitch for a Fast Track into Capital Factory with a $100,000 Investment

Austin Startup

It’s hard to describe in words the palpable energy when a room is this packed full of incredible female entrepreneurs at the Women in Tech Summit at Capital Factory.

Global Cash Access Acquires Austin-based Multimedia Games for $1.2 Billion

SiliconHills

Global Cash has agreed to acquire all outstanding common stock of Multimedia Games for $36.50 per share, 31 premium from the stock’s close on Sept. The news sent Multimedia Games’ stock which […] The post Global Cash Access Acquires Austin-based Multimedia Games for $1.2 Global Cash Access Holdings of Las Vegas announced Monday plans to buy Austin-based Multimedia Games Holding Co. for $1.2 billion in cash.

TSYS Acquires NetSpend of Austin for $1.4 billion

SiliconHills

The deal calls for TSYS, based in Columbus, Georgia, to pay $16 in cash for each share of NetSpend common stock. TSYS announced plans to acquire Austin-based NetSpend for $1.4 billion. Netspend, founded in 1999, sells prepaid debit cards and other financial services to customers without bank accountants in the United States. NetSpend, which sells [.] The post TSYS Acquires NetSpend of Austin for $1.4 billion appeared first on SiliconHills. Austin Technology

Venture Capital Term Sheets: Conversion Rights

Scott Edward Walker

Here are the issues I have addressed to date: common mistakes dealing with VC’s valuation liquidation preferences stock options exploding term sheets and no-shop provisions anti-dilution provisions dividends Board control protective provisions drag-along provisions pay-to-play and pull-up provisions In today’s post, I examine conversion rights of investors. As many of you know, VC investors are typically issued shares of preferred stock, not common stock.

What happens when a company is acquired for less money than it raised in funding?

Gust

5) Senior Preferred Stock and warrants. 7) Junior Preferred Stock and warrants. 9) Common Stock (including any Preferred that converted to Common, any exercised options, and all Founders stock) and Common stock warrants.

Cap Table Explained — What is it and How to Maintain it for Investors

Up and Running

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. Later, when the startup develops and becomes profitable, the value of that stock can double or triple. Common shares.

How do you pay an early stage board?

Berkonomics

The option price should be set by appraisal under IRS rule 409a, and certainly should be low enough to recognize that common stock options are not worth as much as preferred stock, given the many preferences of the latter. Inside board members, CEO and any other paid employees are not paid for board service in either stock options or cash. Give one percent equity to each outside board member vesting over four years of service.

Why Philosophy and Entrepreneurship?

Feld Thoughts

We didn’t have any financing except for Brad’s credit card and the $10 with which we had purchased our common stock.

The Killer Strategies That Will Make You Profits On Stock Trading

YoungUpstarts

You know how it feels to nail huge profits when stock trading, Right? When implemented properly, stock trading can become a lifetime investment. So if you are looking to become a better stock trader, learn How to Make Money Trading Stocks. With knowledge, you have a tool that will help you master the stock trading dynamics. For instance, you need to keep yourself updated when it comes to current stock news as well as events affecting stocks.

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As You Accumulate Bitcoin or Cash, Where Should Startups Invest It?

The Startup Magazine

While investing in stocks, cryptocurrency, and companies can boost your wealth in less time, choosing the right path to take is essential to avoid missing out on growth opportunities. Knowing where to invest your hard earned cash, crypto, real estate, and stocks help to prevent financial losses while providing you with more flexibility and financial freedom. Stock Options. Investing in stocks is another alternative to generate additional income streams.

How to Protect Your Startup Founder’s Shares

Startup Professionals Musings

In reality, so-called “founder’s” shares are simply common stock, issued at the time of startup incorporation, for a very low price, and normally allocated to the multiple initial players commensurate with their investment or role. Even though the class is common stock, founders can negotiate special vesting and other terms as part of their stock restriction agreement upon venture investment. Stock dilution control.

Why Uber is The Revenge of the Founders

Steve Blank

To turn your company’s stock into cash, you engaged a top-notch investment bank (Morgan Stanley, Goldman Sachs) and/or their Silicon Valley compatriots (Hambrecht & Quist, Montgomery Securities, Robertson Stephens). None of this was law, and nothing in writing required this; this was just how these firms did business to protect their large institutional customers who would buy the stock. Founders can now outvote the preferred stock holders (the investors).

Become A Profitable Investor With These Diverse Investment Plans In 2020

YoungUpstarts

Though they offer lower returns, bonds are considered safer than stocks. Stocks. Owning stocks has long been considered the best, yet a risky way to build one’s wealth. Investing in stocks is a way to increase your money and surpass inflation.

How to Raise Investor Funding for Your Startup

Early Growth Financial Services

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. We recently participated in a panel discussion and workshop at Ubifrance. Nicolas L.

7 Investor Term Sheet Demands Startups Need Not Fear

Startup Professionals Musings

For later investments, the price is equity, with a percentage of the owner stock to be assigned to the investor. Numbers in the 20 percent to 30 percent range are common. Type of stock assigned to the investor. Investors typically demand preferred stock, to give themselves certain voting and liquidation privileges over later shareholders. Even founder’s shares are common stock. entrepreneur investment preferred stock startup term sheet

How do venture capitalists feel about following a crowdfunding capital raise?

Gust

The answer to that question at the pre-conference speaker’s dinner implied unanimous agreement (from a group consisting of many of the top angels, VCs, lawyers, and pundits in the industry), that “direct, equity-based, common stock crowd funding as envisioned by the JOBS Act” would absolutely, positively preclude future investment by any serious professional investor, either angel or VC.

Legal Documents for Your Startup with Founder's Workbench

ReadWriteStart

Documents that can be created include a Certificate of Incorporation, Bylaws, Consent of Board of Directors, and Common Stock Certificates. The law firm Goodwin Procter has launched a new resource for entrepreneurs that will help them navigate some of the legal and organizational challenges that startups face. Called Founder's Workbench , the site includes a variety of free, self-service tools for generating basic legal documents.

How do startups decide who sits on the board?

Gust

In a larger startup post Series A or B, the board might be expanded to five people, with two directors chosen by the Common stock holders (the founders), two by the investors (often one by each of two VC funds), and one independent director agreed to by everyone. A company’s board of directors is technically elected by the company’s shareholders.

Three Startup Financing Myths You Should Avoid

YoungUpstarts

I used to think a valuation was kind of like a stock price of a public company. Setting aside the issues of valuation of common stock vs. preferred stock, what I really didn’t understand was that a valuation is a set of expectations.

Q1 2021 Portfolio Review

Version One Ventures

The company expects its direct listing to occur on April 14, 2021 with its Class A common stock trading on the NASDAQ under the ticker symbol COIN. Despite the obvious challenges, we ended 2020 on a strong note and, so far, our portfolio family has been riding a huge momentum wave. 2021 is proving to be an incredible year across our portfolio – from big funding announcements to significant product developments.

If I Launched a Startup

The Startup Lawyer

4) Type of Shares: Common Stock. (5) 5) Par Value of Common: $0.0001. (6) Here’s what I’d do in the beginning: Incorporation. (1) 1) Entity Choice: Corporation or Corporation. (2) 2) State of Incorporation: Delaware. (3) 3) Authorized Shares in Charter: 10,000,000 Shares. (4) 6) Initial Founders Issuance: 8,000,000 Shares. (7) 7) Founders Equity Split: Depends on the Team, But Quickly and After the Awkward & Difficult Conversations. (8)

If I Launched a Startup

The Startup Lawyer

4) Type of Shares: Common Stock. (5) 5) Par Value of Common: $0.0001. (6) Here’s what I’d do in the beginning: Incorporation. (1) 1) Entity Choice: Corporation or Corporation. (2) 2) State of Incorporation: Delaware. (3) 3) Authorized Shares in Charter: 10,000,000 Shares. (4) 6) Initial Founders Issuance: 8,000,000 Shares. (7) 7) Founders Equity Split: Depends on the Team, But Quickly and After the Awkward & Difficult Conversations. (8)