article thumbnail

How to Fund Your Startup Without Losing Control

Up and Running

Capital investments are like gasoline on a startup business’s metaphorical fire. They allow you to hire more people, purchase new technology, and establish new business connections, among many other benefits. If you’re like most startup CEOs, your startup has been your personal fiefdom and baby.

article thumbnail

Startup Stock Options – Why A Good Deal Has Gone Bad

Steve Blank

VC’s have just changed the ~50-year old social contract with startup employees. In doing so they may have removed one of the key incentives that made startups different from working in a large company. For most startup employee’s startup stock options are now a bad deal. Why Startups Offer Stock Options.

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

4 Deadly Legal Mistakes That Startups Make

Scott Edward Walker

And please don’t tell us to hire a lawyer.) Indeed, you must make sure that all of the shares of common stock issued by the corporation to the founders are subject to vesting restrictions – which means that ownership of the shares would vest over time (instead of all of the shares being owned outright on day one).

Vesting 89
article thumbnail

What’s a Fair 409A Discount?

VC Adventure

Most boards did some level of work to determine the FMV of a company’s stock but generally options were priced between 10% and 15% of a company’s then preferred price (because common equity sits behind preferred equity there is typically a discount applied to the FMV of common stock to account for this “overhang”).

article thumbnail

Building a new startup hub

Startup Lessons Learned

Lessons Learned by Eric Ries Wednesday, August 26, 2009 Building a new startup hub Last week, I had a unique opportunity to spend some time in Boulder at the behest of TechStars. It was a great experience to see a relatively new startup hub in action - and thriving. Their model looks like a key ingredient in the startup brew there.

article thumbnail

Want to Know How VC’s Calculate Valuation Differently from Founders?

Both Sides of the Table

You’ll need to hire and retain talen to grow your company. This means that participation truly only applies in downside scenarios and once your exit outcome is above a certain price investors would still be better off converting to common stock and not taking their preference. That’s normal.

Valuation 405
article thumbnail

How I negotiated my startup compensation

keen.io

How I negotiated my startup compensation. When I started thinking about joining Keen, I quickly realized there is a lot I don’t know about startups. For example: Don’t accept equity compensation (stock shares) without knowing the percentage of the company you’ll own. I knew enough to know I wanted to join a startup.

Salary 50