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Founder Dilution

A VC : Venture Capital and Technology

I’ve written a bunch on this topic and here are two posts that address this exact issue: Founder Dilution – How Much Is “Normal”? Employee Equity: Dilution. I saw a blog post this weekend that looked at the IPO filings of 79 tech companies and calculated the ownerships of the founders and the VCs at IPO.

How does equity dilution work for startups?

Gust

Equity dilution works when the same pie is divided among more people. Uncategorized company equity dilution founder investors startup

Understanding How Dilution Affects You at a Startup

Both Sides of the Table

Dilution. million pre-money valuation, which is a $10 million post-money) you get diluted by 25% (2.5m / 10m). million at a $7.5 million.

Mathematical vs. Economic Dilution of Startup Equity: Thinner Slices of an Extra-Large Pizza

Gust

That’s the concept of what some call mathematical dilution. That is not economic dilution, but rather its opposite ( accretion ).

Brisbourne: The Math Behind Anti-Dilution (With Examples)

Ask The VC

Today’s post of the day is from Nic Brisbourne (DFJ Esprit) and it titled What is anti-dilution/downround protection? Nic covers narrow-based, broad-based, and full ratchet anti-dilution with real examples using real math. Well – I fell off that particular horse. I just fell of the horse.

Maker's Mark Dabbles in Diluting Its Brand

Fresh Inc.: The Staff Blog

But now there's a new wave of comments, this time from customers angry that the company would dilute the product they have come to expect.

Your Business Grew, Your Brand Got Diluted, Here's How To Avoid It

Fresh Inc.: The Staff Blog

Do you even know the voice and tone of your company's communications these days? Maybe it's time to have a 2nd look

Dilution and Investment - An Answer You May Not Expect

Taffy Williams

The companies with low prices either had to dilute investors in a financing, had enough to survive, or went out of business. So when you consider the Dilution Effects of a financing, remember the following advice delivered by many old timers; “ It is Better to Have 10% of a Lot of Money, than Have 100% of Nothing.”

The Dilution Concern for Founders

Recent Buzzes - VC Experts, Inc.

There are three phenomena that trivialize even the best of investment strategies: Dilution, Dilution, Dilution.". By Joseph W.

Anatomy of a Term Sheet: Conversion and Anti-dilution

VC Ready Blog

Anti-dilution Provisions. While the timing of conversion is not a very hot topic in negotiating a term sheet, the anti-dilution provision can be if the investors decide to play hardball. These adjustments are referred to as “price-based” anti-dilution protection. Optional Conversion and Mandatory Conversion.

Legal Basics: Fully-Diluted Capital

VC Ready Blog

When discussing a company’s capital structure, investors typically talk in terms of “fully-diluted capital” (a/k/a capitalization on a “fully-diluted basis”), rather than authorized or issued capital , because fully-diluted capital provides a more accurate picture of the company’s overall capitalization.

Finland's Tekes Re-Launches Tempo With 75% Non-Dilutive Funding

ArcticStartup

In 2011, Tekes Tempo launched with an idea to provide 50% non-dilutive funding to companies that would be building market-oriented services.

Co-founder dilution

StartupCFO

When entrepreneurs talk about dilution to their share ownership, most of the time they’re talking about dilution from outside investors. Yet, more dilution, especially early on, can come from adding co-founders which is something no one seems to talk about. I am in favour of having a co-founder. This is not fair.

Anti-Dilution Provisions - An Example

Recent Buzzes - VC Experts, Inc.

Anti-Dilution provisions can be a key negotiating point when it comes to the Deal Terms of a new round of financing, especially in the presence of a. View an example of Anti-Dilution Provisions By VC Experts Analyst Team. Down Round. Broad Based Weighted Average can be a more friendly provision as compared to.

Reminder: Entrepreneurs, use OwnYourVenture, an equity simulator to overcome your dilution fears or questions in no time!

Grade A Entrepreneurs

Book Review Bo Fishback David Szetela Dilution calculator Entrepreneur Esther Dyson OwnYourVentureGreat, great reminder for many entrepreneurs!

Strategy Roundtable For Entrepreneurs: Non-dilutive Financing Through Revenue Sharing

ReadWriteStart

Sponsor. Also, an Incubation Radar profile on CrowdEngineering explains more about this very, very cool company doing crowdsourced customer support.

The 3 Rules of Successful Business as Taught By Seth Godin (and Your Mother)

Fresh Inc.: The Staff Blog

In a world desensitized and diluted by incessant noise, has standing out from the crowdbecome a privilege preserved for the select few

Anatomy of a Term Sheet: Conversion and Anti-dilution

VC Ready Blog

Anti-dilution Provisions. While the timing of conversion is not a very hot topic in negotiating a term sheet, the anti-dilution provision can be if the investors decide to play hardball. These adjustments are referred to as “price-based” anti-dilution protection. Optional Conversion and Mandatory Conversion.

Convertible and SAFE Notes

A VC : Venture Capital and Technology

Here is why: They defer the issue of valuation and, more importantly, dilution, until a later date. I think dilution is way too important of an issue to defer, for even a second. They obfuscate the amount of dilution the founder(s) is taking. Paul Graham (@paulg) August 28, 2010. I think many investors actually like this.

The Most Common Way Entrepreneurs Kill Their Business

Nick O'Neill

Entrepreneurship DilutionThe ruler of the world is always a master at one thing: ruling the world. Sometimes you are forced to step away.

How Much Money To Raise

A VC : Venture Capital and Technology

It's too dilutive to you and your co-founders and angels. First, try to dilute in the 10-20% band whenever you raise money.

Size of Pie, a.k.a. What Type of Entrepreneur Are You?

OnlyOnce

Although David is talking about taking in outside capital and founder dilution in pursuit of larger business growth and objectives, he is also getting to the same point about entrepreneur type. Business Entrepreneurship Venture Capitalists dilution entrepreneur equity Founders scalingSize of Pie, a.k.a. Mmmm…pie. And, don?t

Email 17

Early Employee Dilution

ithacaVC

But here is one that I want to focus on in this post: “Can I ask for undiluted stock (non dilution clause)?” I am not even sure what “undiluted stock” is, but safe to say the person (I will call him Exec X) meant stock that his equity would not be dilutable in terms of ownership. Actually, I got many questions.

This Is How Successful Brands Reach More Ideal Customers

YFS Magazine

Grow Marketing & Sales brand positioning brand story brand strategy branding content marketing customer acquisition marketing target audience

8 Great Reasons to Bootstrap Your Startup

Early Growth Financial Services

Bootstrapping helps you to focus on your product in so much as … Continue reading → Financial Planning bootstrapping dilution enterpreneurship entrepreneurs equity fundraise profit margins self-fund small business financial planning startup startup financials vc venture capitalOriginally published in SoCalTech. Helps you to focus.

Founder Dilution Survey

Will Price

Sim over at Polaris Ventures is looking for founders to help him quantify dilution over the life of a company (financings, stock option refreshes, etc) and the impact of fund raising on the ultimate stakes founders enjoy in their companies. He will be sharing his findings on his blog. Take the survey here

Anti-Dilution Provisions - An Example

Recent Buzzes - VC Experts, Inc.

Anti-Dilution provisions can be a key negotiating point when it comes to the Deal Terms of a new round of financing, especially in the presence of a. Down Round

Is Dilution Considered When Talking About Equity Ranges?

Ask The VC

Model Cap Tables With VCHub

Ask The VC

In addition, he’s created a variety of interactive examples that help you understand things like: Anti Dilution – Broad-based Weighted Average. Anti Dilution – Narrow-based Weighted Average. Anti Dilution – Full Ratchet. A few days ago I answered a question on AsktheVC about modeling cap tables. Dividends.

The Dilution Concern for Founders

Recent Buzzes - VC Experts, Inc.

There are three phenomena that trivialize even the best of investment strategies: Dilution, Dilution, Dilution.". Then, I remind them of the old saying in the commercial real estate business: "There are three rules for making money in commercial real estate and they are Location, Location, Location."

What is it Like to Negotiate a VC Round?

Both Sides of the Table

When you do, my 20% becomes 15% and thus my true price for your round is actually higher than it appears when I invested because I already know I’m going to face more dilution for options. Option pool (likely dilution in the future, which is a function of a higher price just not yet defined). It’s very simple. million?

Quick Post on Post-Money Valuations

Rob Go

In the old world, this additional dilution would end up being shared, since the pre-money was fixed. Worst case, they say no.

Rare New Form of Procrastination Identified

Fresh Inc.: The Staff Blog

He dubs the condition "priority dilution" and reports on research by his firm into its prevalence. Are you guilty of priority dilution

How to Raise Investor Funding for Your Startup

Early Growth Financial Services

Pre-money valuation — The value of the company prior to investment, calculated on a fully-diluted basis. Nicolas L.

Reserves

A VC : Venture Capital and Technology

That means they will invest enough capital to avoid being diluted by the follow-on financing round. That hurts them because they get diluted by those rounds they can’t participate in. Reserves is the term VCs use to describe funds they “reserve” for follow-on financings of their portfolio companies.

LBO: Antidilution Protection For Investors

Recent Buzzes - VC Experts, Inc.

In the "modern era" of venture capital (1970 and beyond) the so–called anti–dilution provisions have become increasingly important. Like so many words in the glossary of venture capital, "dilution" has multiple meanings.

Wenger: Presenting Option Grants to Boards

Ask The VC

Percentage size of grant fully diluted. Total size of option pool and remaining available pool (absolute numbers and percentages fully diluted). Today’s VC post of the day is from Albert Wenger (USV) and titled Presenting Option Grants to Boards. This is feedback I give to CEOs 98% of the time after my first board meeting.

The Resetting of the Startup Industry

Both Sides of the Table

Optimize for a W more than % dilution in these circumstances. Founders hate them because they’re dilutive. Why does this matter?

How Often Do Employees Of VC-backed Startups Get Stock Options?

Ask The VC

In the previous post I talked some about “re-up grants” In some cases, especially if there is a lot of dilution from a financing, there are occasionally broad grants across all employees post financing. Question: How often do venture-backed start-up employees (let’s say non-executives) get stock option grants? Never?

The Trend Back Towards Smaller Seed Rounds

Rob Go

Dilution is the big question here. Raising a seed round half as big usually does not yield half the dilution at this early stage.