Both Sides of the Table

FEBRUARY 20, 2019

If angel investors are pressuring you to set up a board and if you don’t have the leverage to push back a little then I might suggest a 3-person board in which all 3 seats are appointed by the common stock and you agree to appoint one of these seats to the angel investor but perhaps make it either time based or event based.

Venture Capital 236

Venture Capital Startup Angel Investor Silicon Valley 236

Steve Blank

APRIL 26, 2022

Some even insisted that all prior preferred stock had to be converted to common stock. For the common shareholders (employees, advisors, and previous investors), a cram down is a big middle finger, as it comes with reverse split – meaning your common shares are now worth 1/10th, 1/100th or even 1/1000th of their previous value.

Cram Down 404

Cram Down Founder Venture Capital Recapitalization 404

Startup Company Lawyer

APRIL 23, 2009

Startup companies consume resources intelligently, put people to work in efficient ways, and produce market driven products at lower costs. These provisions include a special class of super-voting common stock, called “Class F&# common stock, which is named for “Founders.&#. Protective provisions.

Common Stock 33

Common Stock Stock Dividend Delaware 33

Both Sides of the Table

JULY 29, 2010

The A round was done in February 2000 (end of the bull market) and my B round was done in April 2001 (bear market). People buy companies for 3 primary reasons: 1) they want the management team / talent 2) they want the technology or 3) they want the market traction (revenue, customer base, profits, etc). Do it early.

Venture Capital 282

Venture Capital Term Sheet Valuation Stock Options 282

Up and Running

AUGUST 28, 2019

Stick to the basic requirements and save your unique flourishes for your mission statement and marketing materials. If you used an incorporation service, they might have sent you a nice binder with your bylaws template, stock certificates, and maybe even a nifty corporate seal embosser (neat!). Create a corporate record book.

Delaware 83

Delaware Stock Nevada Technical Review 83

Steve Blank

APRIL 10, 2019

The mechanics of a stock option was a simple idea – you received an option (an offer) to buy a part of the company via common stock options (called ISOs or NSOs ) at a low price (the “strike price”.) Not everyone got the same amount of stock. The founders got most of the common stock. That made sense.

Stock Options 333

Stock Options Stock Vesting Common Stock 333

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. Here are some typical special terms and considerations for Founder’s stock: Negligible real value.

Stock 256

Stock Vesting Common Stock Founder Vesting 256

The Startup Magazine

NOVEMBER 14, 2018

Before investing any of your hard earned cash or current stocks and real estate into cryptocoins , it is important to consider the possibility of losing out on your investment. Never invest any cash you are not okay with losing due to the volatility of the crypto market. Stock Options. Research Altcoins.

Common Stock 103

Common Stock Stock Stock Options Startup 103

Both Sides of the Table

JULY 22, 2010

Due to competitive markets we ended up with a pretty good term sheet until we needed to raise money in April 2001 and then we got completely screwed. The more senior members you have (say you already have a CEO, CTO, VP marketing, VP Biz Dev, VP Products) then the less options you’ll need and vice versa.

Valuation 405

Valuation Liquidation Preference Pre-Money Valuation Term Sheet 405

YoungUpstarts

AUGUST 14, 2019

Plus, you need time to track markets in addition to spotting opportunities. So, focus on one or two trading stocks. However, a beginner should observe the market first before making any move. Are you going to use market orders? Common Stock Trading Strategies. Don’t make it a side-hassle. Start Small.

Stock 113

Stock Common Stock Exit Strategy Marketing 113

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. Here are some typical special terms and considerations for founder’s stock: Negligible real value.

Vesting 245

Vesting Common Stock Stock Founder Vesting 245

Up and Running

SEPTEMBER 19, 2017

For a business that anticipates needing, for example, $500,000 in startup capital, that means that best-case scenario Klemm can expect to give up half of his business’s common stock (and an even larger percentage of control of the business once the deal’s fine print provisions are considered).

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

Austin Startup

JULY 6, 2018

More traditional and comprehensive programs often require 5–8% of common stock, but often provide between $20K and $100K up-front as well. Market Focus. One of the most common complaints I’ve heard from entrepreneurs, after having gone through an accelerator, is that it wasn’t helpful for their “type” of business.

Dilution 48

Dilution Startup Technical Review Equity 48

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.

San Antonio 48

San Antonio Stock Common Stock Marketing 48

YoungUpstarts

JANUARY 16, 2020

Investing in stocks carries higher risks than other investments, but it also gives large rewards. Shareholders also get dividends through some stocks. There are two types of stocks. Mutual funds. Conclusion. Having a brokerage account helps you to buy and sell investments more efficiently.

Dividend 147

Dividend Stock Common Stock Capital Gains 147

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. Startup owners need to assume a three to five year wait for a liquidity event, such as acquisition or going public, before they can cash out.

Stock 120

Stock Vesting Common Stock Founder Vesting 120

YoungUpstarts

JUNE 26, 2020

To do that you have to show how your market is big enough (a multi-billion dollar market) to support that kind of valuation. Like Mark Zuckerberg, who built a site only for college students, we are looking for a small, protected market that you as an entrepreneur, can dominate. Why does it need to be a small market?

Finance 205

Finance Silicon Valley Valuation Startup 205

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

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. Here are some typical special terms and considerations for Founder’s stock: Negligible real value.

Stock 175

Stock Vesting Common Stock Founder Vesting 175

Both Sides of the Table

SEPTEMBER 18, 2014

It’s simply what a market is willing to pay based on a future belief that your company will grow and non-linear rates and be worth much more in the future. If you want to give them a 50% discount offer them $1 of common-stock warrants (no liquidation preference) for every $1 of stock they buy. Cashflow projections?

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Startup Professionals Musings

OCTOBER 7, 2010

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. Here are some typical special terms for founder’s stock: Negligible par value.

Stock 214

Stock Vesting Common Stock Founder Vesting 214

K9 Ventures

NOVEMBER 21, 2011

3) Setting a precedent for the price of the Common Stock : This is the biggest issue with founder liquidity. Founders typically hold Common Stock in the company, but they (obviously) want to sell the Common Stock at the same price as the Preferred price or close to it.

Founder 87

Founder Common Stock Preferred Stock Stock 87

Ben's Blog

JULY 16, 2013

What about the efficient market hypothesis? Aren’t markets rational? If markets behave rationally, one might expect the ratio of price to earnings to be reasonably stable over the period (click here for complete data set). Because markets are not logical; markets are emotional. How could this be? Things change.

Down Round 78

Down Round Marketing Preferred Stock Post-Money Valuation 78

K9 Ventures

NOVEMBER 21, 2011

3) Setting a precedent for the price of the Common Stock : This is the biggest issue with founder liquidity. Founders typically hold Common Stock in the company, but they (obviously) want to sell the Common Stock at the same price as the Preferred price or close to it.

Founder 84

Founder Common Stock Preferred Stock Stock 84

Startup Professionals Musings

JANUARY 29, 2018

I’ll never forget that great sense of excitement I felt when I incorporated my first business, and realized that I was now the proud owner of 10 million shares of common stock. Even though initial stock has no market value today, it is extremely valuable in dividing equity ownership between co-founders, investors, and early partners.

Stock 129

Stock Vesting Preferred Stock Cofounder 129

The Equity Kicker

NOVEMBER 9, 2016

Additionally, they introduce a small amount of complexity and an element of misalignment between the investor and the common stock holder (usually the founder). This trade off is now so entrenched that it’s become a market standard that most investors and founders make unconsciously, but they are all aware of the implications.

Liquidation Preference 122

Liquidation Preference Silicon Valley Participating Preferred Common Stock 122

Steve Blank

OCTOBER 24, 2017

Uber , Zenefits , Tanium , Lending Club CEOs of companies with billion dollar market caps have been in the news – and not in a good way. This era was a “buyer’s market” – there were more good companies looking to get funded than there were VCs. And while new markets were created (i.e. Board Control.

Founder 245

Founder Technical Review CTO Hire IPO 245

www.inc.com

SEPTEMBER 24, 2011

Sales & Marketing | Wednesdays. SALES & MARKETING. Online Marketing. Bringing Innovation to Market. Even with the turmoil in the capital markets in the second half of 2007, it was another record year for merger and acquisition activity. Get and keep customers with affordable online marketing tools.

Arizona 40

Arizona Equity Iowa Venture Capital 40

Both Sides of the Table

APRIL 14, 2010

Liquidation preference is the amount of money that an investor gets paid before the common stock (e.g. It also gets the new investor concerned that management (common stock holders) will not be incentivized because they realize that the investors will take most of the money unless there is a big upside scenario.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Dividend 289

The Startup Magazine

JUNE 7, 2018

Penny Stocks. If you aren’t all that savvy when it comes to investments, start with penny stocks. As they aren’t worth much, a common stock sold for under a dollar on the market is a great way for a small business owner to learn the market and develop important skills.

Small Business 77

Small Business Jacksonville Stock Florida 77

Haystack

JULY 8, 2018

The private markets have ballooned, and the VC model is based on building a portfolio of companies such that the best ones can be acquired or go public. For employees at early-stage companies… the equity you’ve been granted is likely common stock, just like the founders. All of this activity is at-will.

Early Stage 95

Early Stage Dilution Private Equity Common Stock 95

Ben's Blog

JULY 16, 2013

What about the efficient market hypothesis? Aren’t markets rational? If markets behave rationally, one might expect the ratio of price to earnings to be reasonably stable over the period (click here for complete data set). Because markets are not logical; markets are emotional. How could this be? Things change.

Marketing 46

Marketing Preferred Stock Post-Money Valuation Down Round 46

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.

Preferred Stock 87

Preferred Stock Finance Common Stock Liquidation Preference 87

Up and Running

AUGUST 17, 2015

Between my experiences as a management consultant, as well as my product and marketing roles at multiple tech companies, I felt that I had enough operational experience to make that leap sooner than later. C Corp versus LLC, non-competes, liquidation preferences, preferred versus common stock, and so on).

Entrepreneur 60

Entrepreneur Cofounder Angel Investor eCommerce 60

Eric Friedman

JUNE 27, 2016

Setting The Option Strike Price Above Fair Market Value. A little bit of background first on options: In order to issue options, your company must have a valid 409A valuation setting the fair market value (“FMV”) of a share of common stock. This is putting them on the line to actually deliver for you.

Equity 98

Equity Vesting Cap Table Common Stock 98

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. Does it involve intellectual property, model innovation, speed to market, market positioning? Description: Know your market, your competitors, and your idea. Basic Research.

Founder 28

Founder Warrant San Francisco Intellectual Property 28

Berkonomics

APRIL 4, 2019

Others worry that we will latch onto individual line items within financial data and engage in inquisitions regarding telephone bills, marketing costs and other tactical line items in detailed financial statements. They worry that we will not keep the information confidential and that financial data will find its way into competitors’ hands.

Stock Options 48

Stock Options Balance Sheet Stock Common Stock 48