Berkonomics

JANUARY 6, 2022

A rather common but small dividend rate of six percent becomes a massive amount after seven years, almost half again the value of the original investment. Conversely, I have praised and seen others praise VCs who volunteer to eliminate participation clauses even before knowing the ultimate sales price in a deal.

Dividend 62

Dividend IRR Preferred Stock Participating Preferred 62

keen.io

FEBRUARY 5, 2013

From there, I began googling things like “first employee startup equity” and “startup offer negotiation.” These were the best resources I found: Equity for Early Employees in Early Stage Startups. Startup Equity for Early Employees. The next Monday, I received the following email from Kyle. Paul Graham’s Equity Equation.

Salary 50

Salary Equity Startup San Francisco 50

www.inc.com

SEPTEMBER 24, 2011

Email address: Home. Employee Benefits. Jumpstart wasnt much at the time, just four employees working from home offices. But as Arizona Bay grew--it now has 40 employees and more than a dozen clients--Graham began to worry that he was missing out. Finance | Tuesdays. Innovation | Fridays. Leadership & Managing | Tuesdays.

Arizona 40

Arizona Equity Iowa Venture Capital 40

Berkonomics

OCTOBER 1, 2015

And some preferred investors have participation rights, where they take all of the above amounts, and then also convert their shares into common stock and participate again alongside the founders and option holders. No-one complains if the sales price is ten times the investment, since there is plenty to go around.

Dividend 48

Dividend Preferred Stock IRR Participating Preferred 48

Tim Keane

JANUARY 12, 2010

Especially in situations where the founders have a large position and are key employees, it is not uncommon for investors to request that they agree to have some portion of their holdings vest on a schedule.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

venturehacks.com

MARCH 21, 2008

If you have more questions, email us at ask@venturehacks.com. 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. Or they bring you a handful of great employees.

Advisory Board 44

Advisory Board Cap Table Vesting Equity 44

venturehacks.com

OCTOBER 21, 2010

As your lawyer explains that the so-called pre-money valuation always includes a large unallocated option pool for new employees, your stomach sinks. This reverse dilution benefits all classes of stock proportionally even though the common stock holders paid for all of the initial dilution in the first place!

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68