Up and Running

SEPTEMBER 19, 2017

They allow you to hire more people, purchase new technology, and establish new business connections, among many other benefits. That is to say, they’d want to be able to control costs and revenues at a high level. Capital investments are like gasoline on a startup business’s metaphorical fire.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

Up and Running

AUGUST 17, 2015

C Corp versus LLC, non-competes, liquidation preferences, preferred versus common stock, and so on). By the time of their restaurant’s grand opening, they were able to build a brand around their restaurant, perfect their menu, and develop a clear understanding of their operating costs.

Entrepreneur 60

Entrepreneur Cofounder Angel Investor eCommerce 60

Up and Running

DECEMBER 1, 2015

Typically, employers that offer employees equity compensation will do so in the form of common stock, preferred stock, or stock options. This type of stock is typically given to founders and early employees with the stock value is near zero. See Also: 10 Tips for Dealing With Startup Stock Options.

Equity 60

Equity Employee Stock Options Vesting 60

keen.io

FEBRUARY 5, 2013

On the other hand, this was new territory for the founders as well; they had zero experience making offers to new startup hires. As a founder, his salary was lower than any of those offered to the new hires; he also had substantially more equity. They decided to give this form of stock to all of the early employees.

Salary 50

Salary Equity Startup San Francisco 50

Both Sides of the Table

SEPTEMBER 5, 2012

they now have 4x the stock and thus 4x the liquidation preferences (since each share has liquidation preferences on it). The alternative is to give investors 1,2 & 3 the exact same amount of preferred Series A stock and give investors 1 & 2 more common stock (which doesn't have liquidation preferences) to adjust for the discount.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

venturehacks.com

MARCH 21, 2008

If an advisor can uncork a million dollars of your company’s latent value with 15 minutes of conversation or a single introduction, you should pay him appropriately. 0.25% of a company’s post-Series A stock. Advisory shares are normal common stock. The opportunity cost is probably too high.

Advisory Board 44

Advisory Board Cap Table Vesting Equity 44

venturehacks.com

OCTOBER 21, 2010

Use a hiring plan to justify a small option pool, increase your share price, and increase your effective valuation. If you don’t keep your eyes on the option pool, your investors will slip it in the pre-money and cost you millions of dollars of effective valuation. Solution: Use a hiring plan to size the option pool.

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68