Techstars Equity Back Guarantee

Feld Thoughts

Today Techstars announced an “ equity back guarantee ” for any company that goes through the Techstars program starting in 2015. So we decided to launch an equity back guarantee. The post Techstars Equity Back Guarantee appeared first on Feld Thoughts.

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Equity for Early Employees in Early Stage Startups


I was asked by a reader how much equity he should give out to early employees and to service providers in a very early stage startup. Founders are likely not paid for a long time and have a sizeable equity percentage for early risk and having the concept.

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How does equity dilution work for startups?


Equity dilution works when the same pie is divided among more people. Over time, other people receive pieces of equity in exchange for work (employee stock options), money (seed, angel and venture investors), services (attorneys, directors, etc.).

Are You Getting Your Fair Share Of Startup Equity?

Startup Professionals Musings

So the first question I usually get is what percent of the company or equity is that person worth? Just because it was your idea doesn’t mean you “deserve” 90% of the equity. The value in a startup is all about tangible results, so I see no equity value in the idea alone.

Should You Offer Equity Compensation to Employees?

Up and Running

Of course, not every equity compensation story is a David Choe Story. If you’re thinking about extending equity to an employee or a vendor (as in the example above), you should know that the topic is multi-faceted. In this article, I’m going to examine: What equity compensation is.

Founder's Dilemmas: Equity Splits

Startup Lessons Learned

Having seen these dilemmas derail countless startups, I wish every entrepreneur and prospective founder would read this book." - Eric The following is an exclusive excerpt which sets up a common pitfall regarding equity splits.

Founder's Dilemmas: Equity Splits

Founders Dilemmas: Equity Splits. The following is an exclusive excerpt which sets up a common pitfall regarding equity splits. Setting the early equity split in stone is one of the biggest mistakes founders can make. Founders Dilemmas: Equity Splits. Lessons Learned.

For Equity Investors, A Startup Has To End To Win

Startup Professionals Musings

Yet one of the first things a potential equity investor asks about is your exit strategy. Equity investments are not loans, so there is no loan payback period or interest payments. Find a private equity firm or friendly individual. entrepreneur equity investors IPO startup exit

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How to Divide Founder Equity: 4 Criteria to Discuss

View from Seed

Editor’s note: Understanding how to divide founder equity at a startup can be tricky, even to the point of reaching emotional riffs between founders. Below, Lee Hower offers advice for approaching these equity discussions objectively and properly.

An Advisor Equity and Advisor Pool Breakdown

Eric Friedman

Bigger/better advisors who get more equity have things like; excellent domain expertise to help you avoid pitfalls, deep connections within the industry to help with the intros, partnerships, and more. As a potential advisor looking to get involved with the company; MORE EQUITY!

Punch & Pie: How Should Co-Founders Divide Equity?

Agile VC

As a result, one of the trickier things co-founders tackle is determining the equity split amongst the founding group of individuals. Sometimes co-founders put off the equity split question for some time. Both of these are typically reflected in the founder equity split.

Finance Fridays: Getting Started – Allocating Equity and Founder’s Investment

Feld Thoughts

Finance Friday’s gets off the ground with today’s post by introducing you to an imaginary startup, the entrepreneurs that we’ll being following throughout the series, and their first challenges: splitting up the founders’ equity and addressing the case where one of the founders provides the initial seed capital for the business. Jane and Dick each brings a similar level of skill and capability to the business, making it easy for them to agree to a 50/50 equity split.

Are You Ready for Equity Based Crowdfunding?

Up and Running

Then, the unveiling of the Securities and Exchange Commission’s proposed equity crowdfunding rules reveals a panacea for growing your business’s coffers. Equity crowdfunding vs. donation crowdfunding. Equity crowdfunding differs from donation crowdfunding in two major ways.

Opportunity Cost


While they differ in many ways from experience to risk tolerance, etc, you can boil them all down to one element – opportunity cost. with a large equity grant). And thus, you will be totally blindsided when the opportunity cost equation has them handing in their resignation.

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Startup Equity Crowdfunding Grows in Europe (NESTA Report)

VC Cafe

Amongst the different types of crowdfunding: Donation, Reward, Lending and Equity, the latter is on the rise as a fundraising mechanism for European startups. investors can then, through the platform, buy small parts of this equity stake. Decision on how much equity.

Free Startup Docs: How Much Equity Should Advisors Get?

Free Startup Docs: How Much Equity Should Advisors Get? Entrepreneurs want to compensate their mentors and advisors for the time they dedicate to helping their businesses grow, but they have no idea how much equity to offer. Startups. Mobile. Gadgets. Europe. Video. Enterprise. Venture.

Convertible Equity, A Better Alternative To Convertible Debt?

Convertible Equity, A Better Alternative To Convertible Debt? As a refresher, a convertible note is a loan that automatically converts into equity upon the closing of a Series A round of financing. Startups. Mobile. Gadgets. Europe. Video. Enterprise. Venture. Social. GreenTech. Gaming.

What Is a SAFE? A Closer Look at The Simple Agreement for Future Equity

Early Growth Financial Services

But sometimes the complexity and costs outweigh the benefits. Enter the SAFE, or Simple Agreement for Future Equity. SAFEs are not debt instruments It’s right there in the name: Simple Agreement for Future Equity. Without the involvement of debt, there … Continue reading → Investment Capital: Equity / Debt / VC Funding Early Stages SAFE equity y combinator convertible debtConvertible debt is a staple in startup funding.

Government Grants Cost No Equity, But are Not Free

Startup Professionals Musings

A grant is not an equity investment, so the entrepreneur doesn’t have to give up a stake in the company either. But before you conclude that your funding problems are solved with grants, you should consider the direct and indirect costs of grant funding: Grant applications are bureaucratic.

What is Sweat Equity Worth?

Franchises Franchises Home Franchise 500 Home-Based Low Cost Top New Fast Growing Top Global Biz Opportunities Franchises for Sale Franchises A Bright Forecast for a Solar Panel Installation Franchise. What is Sweat Equity Worth? Determining how to value sweat equity is key when negotiating with investors and employees. Entrepreneurs often ask me how to value the sweat equity invested in their startup. Sweat equity is just one component of early-stage valuation.

10 Partner Qualities to Test Before Sharing Equity

Startup Professionals Musings

If one of your core values is exceeding your customer expectations for quality and service, and your potential partner ascribes to the low cost, high profit mantra, a successful partnership is highly unlikely over the long-term. entrepreneur startup co-founder partner equity business

Startup Equity For Employees

Startup Equity For Employees. 7 Salary vs Equity. The re-heating of the venture funded tech market has pushed a heat up of the hiring market, and Im getting more calls from friends asking for help understanding startup stock (equity) offers. UPDATE: If youre a founder or near-founder, your equity terms are likely defined by the funding terms negotiated with the investors. Buying your stock would cost $200,000! Salary vs Equity.

Startups Should Be Responsible for Explaining Equity to New Employees

View from Seed

When someone goes to work for an early startup, the compensation package general includes an annual salary, health insurance, and, instead of fixed-cost performance upside, a percentage of unvested options to purchase equity in the company. Uncategorized equity VC

8 Secrets for Maximizing Startup Equity and Control

Startup Professionals Musings

Bootstrapping avoids all the cost, pain, and distractions of finding angels or VCs, and allows you to keep control and all your hard-earned equity for yourself. Every outside hire increases your cost and risk. startup control equity bootstrapping Rich Christiansen business

What is convertible equity (or a convertible security)?

Startup Company Lawyer

Quick answer: convertible equity (or a convertible security) is convertible debt without the repayment feature at maturity or interest. ” In response, Seth Levine wrote a very thoughtful post on convertible debt versus equity. Other folks, such as Mark Suster, have also written about whether convertible debt is preferable to equity. Fred Wilson has been openly critical of convertible debt , and prefers priced equity rounds. Making it equity removes this issue.

When should a convertible note be treated as a replacement for an equity round, and take on characteristics of an equity financing?


A convertible note and an equity round are two different things, done for different reasons. A large majority of serious investors will insist on an equity round, either lightly documented (such as a Series Seed) or fully documented (such as an NVCA Model Series A). If they are similar in range, go right for an equity round, instead of incurring the cost and hassle of double-papering a note and a preferred round. It doesn’t work that way.

11/29/2014 - Superfund Equities Report


11/29/2014 - Superfund Equities Report - The fund sold F (Ford) and piled up on TASR (Taser), SWHC (Smith & Wesson), ZNGA (Zynga) and ABR (Arbor REIT) Citi Group''s Index unit is for sale - LINK OPEC''s meeting in Vienna this week shook the oil markets. Seagate expects a total redemption cost of $362M. CH Chad Hagan CEO, Hagan Capital EIC, Superfund Equities

Is Dead Equity Crippling Your Company?


—————– Dead equityequity held by employees and founders no longer working at the company — is a large and growing problem. Choe opted to forgo a cash payment “in the thousands” for the equity equivalent at the time.

The Real Cost of Raising Money Through Equity

Inc Startups

Business finance runs along a continuum where the lowest cost of capital is a loan and the highest cost of capital is equity. Especially in technology, there is a misconception that equity is free because there is no legal obligation to pay it back

What Private Equity Investors Want: 5 Metrics

Inc Startups

Private equity funds are numbers-driven. This helps the new ownership figure out which products are selling and where the costs really are. Liquidity is going to become more of an issue, because the private equity fund probably used some leverage to buy your company.

There Is Such A Thing As Free Lunch - Free Lunch Is Opportunity Cost In Economics


Free Lunch Is Opportunity Cost In Economics - Just saying: there is such thing as a free lunch, it usually involves a trade off (free lunch at a bar if you order a muinimum of drinks). The above only makes sense in reference to equity speculators who expect no risk. I do not agree that the comment, acronym, or that the phrase replaces opportunity cost in economics.

Cost ratios as a measure of fund efficiency

The Equity Kicker

This applies to all classes of fund managers, including pension fund managers, IFAs, private equity fund managers, and venture capital fund managers. Fund managers are assessed, in part, on their ratio of expenses to assets under management.

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Professional Investors Qualms About Crowdfunding

Startup Professionals Musings

Granted, all the experience so far has been without the most anticipated feature of the JOBS Act – Equity Crowdfunding (Title III) , effective a few days ago with 685 pages of rules. These groups are now largely run by volunteers at no cost to entrepreneurs.

Why Your Customers Buy More When Value Outweighs Cost


This concept is illustrated in the heuristic below: Value force outweighs cost force. The post Why Your Customers Buy More When Value Outweighs Cost appeared first on ConversionXL. “At MECLABS we’ve spent years asking and trying to answer a simple question: ‘Why do people say yes?’.

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Do My Early Stage Investors Own Too Much Of The Company?

Ask The VC

Question: Most VCs commented that they can not fund current cap table where the CEO and COO would get 10% equity once fully vested while the current investors have 80%. Also, I have been offered 10% equity with 4 year vesting and 1 year cliff. If they are, then the hired CEO and COO getting 10% equity each is probably not unreasonable given that the founders are separate from the investors. Equity angel ceo early stage equity ownership

Basics of Unit Economics Analysis

Non-Linear Growth

Economics Growth Equity Investment Selection Raising Capital average customer lifetime capital expenditures churn contribution margin marginal operating costs unit economics When an investment passes our first-screen at Meritage Funds, the first deep-dive we typically do is on the unit economics of the business. Unit economics are the fundamental financial building blocks of a business.

Piercing the Corporate Veil of Sweat Equity

Piercing the Corporate Veil – Sweat Equity Consulting. But much like becoming a co-founder, getting paid sweat equity is essentially becoming an investor in the company. If you did, why would you be consulting for sweat equity instead of investing as a VC or for yourself?

Is Dead Equity Crippling Your Company?

Noam Wasserman

Dead equityequity held by employees and founders no longer working at the company — is a large and growing problem. Choe opted to forgo a cash payment “in the thousands” for the equity equivalent at the time. Anticipating and Avoiding the Dead-Equity Pitfalls.

The Real Cost of Capital

Inc Startups

But how much is their help going to cost you, really? What's the real cost of capital for your business? The concept of cost of capital comes straight out of Finance 101: When a business raises capital, how much does that capital cost? You've got investors lined up. Great!

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What is the ratio of equity received for sweat equity vs. cash investment in a new venture?


There is no specific ratio between “sweat equity” and cash in a venture, and that’s actually not a good way to think about the issue. You might have created that value by slaving 18 hours a day, seven days a week for five years (in which case the value of the sweat equity is $8.70 The second component is the replacement cost of the specific skills and effort that are involved in the particular work.