article thumbnail

Both sides must be fair in a term sheet negotiation.

Berkonomics

Just a few of these terms include vesting, corporate structure, governance principles, financing strategy, valuation and exit strategy. As an example, twenty five years ago, most VCs used common share deal structures. It was not until the later 1980s that the preferred share structure became popular.

article thumbnail

The Corrosive Downside of Acquihires

Both Sides of the Table

Chief Vesting Officers)? Many buying companies price these deals on the basis of $1 million per engineer on the team for an early-stage deal. And on many occasions I have passed on deals where it was clear that the founding team was over-optimizing the deal structure to focus on a quick exit.

article thumbnail

Should You Co-Found Your Company With a Software Development Shop (2 of 2)?

David Teten

I’ve been looking for suggestions for an initial deal structure that is appropriate for the theoretical case of a trusted dev shop putting in $100k in market-value of services over a 6 month period in time. Vesting equity equally divided into set milestones, in this case: 5% vest after design phase. 5% launch of v1.