INDUSTRY INSIGHTS YOUR PEERS ARE READING
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. MORE
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 MORE
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. MORE
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) MORE
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. MORE
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. MORE
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. MORE
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 MORE
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). MORE
As a quick review, most startups begin life as corporations with a single class of equity securities, referred to as Common Stock , issued to founders, employees, and outside service providers. MORE
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. I get the same question a lot from entrepreneurs raising equity capital (venture capital or angel funding). MORE
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. Stock Options. Investing in stocks is another alternative to generate additional income streams. MORE
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. Stock dilution control. MORE
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. MORE
If accepted, each company will receive an equity investment of $20,000 in exchange for six percent of the company in common stock, which will be held by TechStars. As someone obsessed with human computer interaction, the Kinect is an important piece of hardware. Of all the various things Microsoft is working on these days, I find it the most interesting. MORE
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. MORE
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. MORE
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 MORE
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. Stock dilution control. MORE
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. Stock dilution control. MORE
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 MORE
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. MORE
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. MORE
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. MORE
The most common case is an equity investment, but there are many terms that can impact what request size is credible. I’m talking about things like anti-dilution clauses, preferred versus common stock, valuation tied to later round, warrants, and bridge loan options. MORE
This check is for The Community Foundation and for the Entrepreneurs Foundation of Colorado (EFCO) and results from a gift of 24,793 shares of common stock from Rally at the time of its first financing that represented approximately 1% of the equity of the company. MORE
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. MORE
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. Even founder’s shares are common stock. MORE
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. MORE
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. Stay Away From Penny Stocks. MORE
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. MORE
By Sean Greaney: sgreaney@stubbsalderton.com Originally published on Stubbs Alderton & Markiles, LLP Sean Greaney, attorney with Stubbs Alderton & Markiles, LLP gives an informative introduction to Restricted Stock for startup companies. What is founder restricted stock? Founder restricted stock refers to shares of common stock that are owned by a founder but are subject to forfeiture upon the occurrence of certain contractually agreed upon events. MORE
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. MORE
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. MORE
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 [.] MORE
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. MORE
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 MORE
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). Quick note: I’m not your lawyer. MORE
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. Make sure the government waits for a stock sale to collect taxes. MORE
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. MORE
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) MORE
Common Stock Related Topics The Startup Lawyer
DECEMBER 10, 2015
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
ithacaVC
APRIL 5, 2011
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.
Growthink Blog
JANUARY 24, 2011
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. I get the same question a lot from entrepreneurs raising equity capital (venture capital or angel funding).
Startup Professionals Musings
MAY 18, 2015
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. Make sure the government waits for a stock sale to collect taxes.
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Startup Company Lawyer
APRIL 23, 2009
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.
K9 Ventures
NOVEMBER 21, 2011
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.
Early Growth Financial Services
DECEMBER 17, 2012
By Sean Greaney: sgreaney@stubbsalderton.com Originally published on Stubbs Alderton & Markiles, LLP Sean Greaney, attorney with Stubbs Alderton & Markiles, LLP gives an informative introduction to Restricted Stock for startup companies. What is founder restricted stock? Founder restricted stock refers to shares of common stock that are owned by a founder but are subject to forfeiture upon the occurrence of certain contractually agreed upon events.
The Startup Lawyer
JANUARY 2, 2014
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
Steve Blank
APRIL 10, 2019
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.
View from Seed
DECEMBER 4, 2014
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.
SiliconHills
NOVEMBER 3, 2016
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
SiliconHills
NOVEMBER 4, 2015
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.
Agile VC
DECEMBER 4, 2014
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.
Gust
JUNE 7, 2014
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.
Feld Thoughts
OCTOBER 7, 2013
This check is for The Community Foundation and for the Entrepreneurs Foundation of Colorado (EFCO) and results from a gift of 24,793 shares of common stock from Rally at the time of its first financing that represented approximately 1% of the equity of the company.
Austin Startup
SEPTEMBER 8, 2014
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
Startup Professionals Musings
MARCH 23, 2014
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. Stock dilution control.
Agile VC
DECEMBER 4, 2014
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.
YoungUpstarts
AUGUST 14, 2019
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. Stay Away From Penny Stocks.
Berkonomics
MARCH 8, 2018
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.
SiliconHills
AUGUST 4, 2015
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 Professionals Musings
JANUARY 22, 2013
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. Stock dilution control.
The Startup Magazine
NOVEMBER 14, 2018
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. Stock Options. Investing in stocks is another alternative to generate additional income streams.
Startup Professionals Musings
SEPTEMBER 26, 2015
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. Even founder’s shares are common stock.
SiliconHills
DECEMBER 16, 2014
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.
SiliconHills
JULY 29, 2013
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 [.]
SiliconHills
FEBRUARY 19, 2013
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
Gust
JUNE 28, 2012
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.
Scott Edward Walker
JUNE 9, 2011
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.
Gust
MAY 31, 2014
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.
The Startup Lawyer
MARCH 17, 2010
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)
The Startup Lawyer
MARCH 17, 2010
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)
Steve Blank
OCTOBER 24, 2017
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).
Gust
MAY 24, 2012
As a quick review, most startups begin life as corporations with a single class of equity securities, referred to as Common Stock , issued to founders, employees, and outside service providers.
Gust
MARCH 16, 2014
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. Stock dilution control.
SiliconHills
SEPTEMBER 8, 2014
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.
Feld Thoughts
DECEMBER 28, 2011
If accepted, each company will receive an equity investment of $20,000 in exchange for six percent of the company in common stock, which will be held by TechStars. As someone obsessed with human computer interaction, the Kinect is an important piece of hardware. Of all the various things Microsoft is working on these days, I find it the most interesting.
Early Growth Financial Services
FEBRUARY 3, 2015
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.
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). Quick note: I’m not your lawyer.
Startup Professionals Musings
OCTOBER 29, 2013
The most common case is an equity investment, but there are many terms that can impact what request size is credible. I’m talking about things like anti-dilution clauses, preferred versus common stock, valuation tied to later round, warrants, and bridge loan options.
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