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. Retain the right to reclaim stock from anyone leaving the startup.

Stock 120

Stock Vesting Common Stock Founder Vesting 120

www.inc.com

SEPTEMBER 24, 2011

Entrepreneur news from reporter Eric Markowitz. Sales & Marketing | Wednesdays. SALES & MARKETING. Theres a huge opportunity cost in not taking equity," he says. In the 1990s, Graham was one of those entrepreneurs giving away equity in exchange for crucial services. The Goods: Your Business Toolbox | Thursdays.

Arizona 40

Arizona Equity Iowa Venture Capital 40

Startup Company Lawyer

AUGUST 31, 2012

Ted Wang believes that the “reason that capped convertible debt is the current market leader is that entrepreneurs have been conditioned over time to believe that convertible debt is (a) faster (b) cheaper and (c) better for them than equity investment.”

Convertible Security 73

Convertible Security Equity Security Preferred Stock 73

The Startup Magazine

JUNE 7, 2018

Just recently, WalletHub aimed to help aspiring entrepreneurs by comparing relative startup opportunities across over 180 cities in the U.S., and Jacksonville, Florida, which also happens to boast a comparatively low cost of living, ranked relatively high among the best places to start a business. Penny Stocks.

Small Business 102

Small Business Jacksonville Stock Florida 102

Startup Company Lawyer

MARCH 14, 2010

My general opinion is that anything that makes the financing process faster and easier or otherwise educates entrepreneurs is a good thing. (A Co-sale rights. These rights are missing, which is probably okay since I have never heard of a co-sale right being used before. Series Seed Financing Documents (by Fenwick & West).

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

Berkonomics

APRIL 4, 2019

On the other side, entrepreneurs and CEO’s usually have a natural fear of giving too much information to us investors after the initial investment is received. That burden is an ongoing cost of taking the investment, much as a public company takes on the additional burden of governmental reporting, both adding to costs over time.

Stock Options 48

Stock Options Balance Sheet Stock Common Stock 48

Lightspeed Venture Partners

OCTOBER 1, 2012

The company did $1M in sales last year, 90% from wholesale, and had a 10% profit margin. They wanted to get to $10M in sales and then get bought by a big food company. Price is always a consideration in investing, but particularly so if the entrepreneurs have shown an interest in an early exit. The entrepreneur took this offer.

Pre-Money Valuation 158

Pre-Money Valuation Valuation Participating Preferred Preferred Stock 158

Tim Keane

JANUARY 12, 2010

Please see later version of this post on May 16, 2010 Entrepreneurs are often not experts in the area of term-sheet negotiations and all of the surrounding issues.   Investors sometimes “present” the terms they’d like and expect the entrepreneurs to react. Term-sheets and Valuations: Thinking about Negotiations.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Gust

JULY 23, 2012

Donations of private company stock may be an effective and tax-efficient method of giving with significant benefits to the donor. These assets often have a relatively low cost basis (e.g. At a simple level, you can deduct up to 30% of your annual adjusted gross income for the value of a stock donation. The Tax Benefit.

Stock 114

Stock Capital Gains Warrant Stock Options 114

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. Don’t save starting costs by giving the business away.”. I’ll go into the difference between these in just a moment. Types of equity compensation. Pay the fees [for your vendors].

Equity 60

Equity Employee Stock Options Vesting 60

Startup Company Lawyer

MAY 4, 2009

Startup companies consume resources intelligently, put people to work in efficient ways, and produce market driven products at lower costs. The application fee is $50, which only partially offsets costs associated with processing applications. Philip Kaplan – Entrepreneur. Possess reasonable training or domain expertise.

Founder 28

Founder Warrant San Francisco Intellectual Property 28

Scott Edward Walker

APRIL 9, 2012

Why Can’t a Startup Issue Shares of Common Stock to Investors? In fact, many incubators like Y Combinator and TechStars are issued shares of common stock for their initial investment (usually about $20,000). Friends and family are also often issued shares of common stock. Speed, simplicity and cost.

Preferred Stock 87

Preferred Stock Finance Common Stock Liquidation Preference 87

Gust

DECEMBER 8, 2011

I urge all entrepreneurs to consult and develop a good working relationship with a qualified startup lawyer. Make escrow arrangements for restricted stock (i.e., Consummate the stock issuances, make any necessary securities filings and issue the corresponding stock certificates. Caveat entrepreneur !

Intellectual Property 139

Intellectual Property Non-disclosure Agreement Delaware Stock 139

Both Sides of the Table

SEPTEMBER 5, 2012

My initial reaction to Adeo when we spoke was that while it may have solved some issues (debt versus equity) it didn’t solve the ones that I’ve been warning entrepreneurs about most loudly. A standard entrepreneur retort I heard back then (2008-09) was “I don’t know what my company is worth now.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

Startup Company Lawyer

JULY 20, 2009

At some point, however, an entrepreneur will need to formally incorporate a company. In addition, if an entrepreneur needs to engage third party contractors, it generally makes sense to incorporate a company so that the third party enters into an agreement with a company instead of an individual. Issuing stock options.

IP 67

IP Stock Options Preferred Stock Capital Gains 67

Professor VC

FEBRUARY 18, 2011

It was going to be challenging to get scale with a model that charged on a per business card basis, a requirement given the amount of funding and cost for the crowdsourced labor. A stock acquisition is a bet that would provide significant upside (and possible downside) opportunity. Thus, I am raising my questions here. Steve Bennet.

Acquisition 31

Acquisition San Jose Angel Investor IPO 31