Both Sides of the Table

MARCH 11, 2011

In 1995 Netscape IPO’d and browsers started to become more prevalent. IdeaLab has created 75 companies, leading to 8 IPOs, 35 or so acquisitions and more than 5 companies worth in excess of $1 billion. In fact, IdeaLab employees around 50 people who are not necessarily dedicated to a single company. They are very hands on.

Product 350

Product Tuvalu Dilution Incubator 350

YoungUpstarts

MAY 6, 2019

By offering the advantages of your company, you will be able to find some great employees. If you are getting funded for the first time, which means that you have not diluted the shares of your company, you will be receiving Series A funding. There is a complete process to go for an IPO. Entering the Market. You set a goal.

Startup 101

Startup Technical Cofounder Merger Early Stage 101

YoungUpstarts

MAY 31, 2016

Hire smart, ambitious, get-it-done employees and lead them with emotionally intelligent innovation leadership skills. The single biggest reason that the average company struggles or even fails is due to their lack of focus and dilution of their greatest resource, which are people. Therefore, don’t overlook or under estimate small wins.

Technical Review 100

Technical Review Leadership Early Stage Initial Public Offering 100

Startup Professionals Musings

AUGUST 10, 2019

The downside is loss of control and financial dilution. The right motivated employees dilemma. If you take investor money, expect a push for hockey-stick growth and a liquidity event, like going public (IPO) or sale (M&A), to get the payback. Should you start a company solo or find co-founders to help you?

Hockey Stick 243

Hockey Stick Cofounder Liquidity Event Startup 243

abovethecrowd.com

APRIL 20, 2016

All Unicorn participants — founders, company employees, venture investors and their limited partners (LPs) — are seeing their fortunes put at risk from the very nature of the Unicorn phenomenon itself. In 1999, record valuations coexisted with record IPOs and shareholder liquidity. 2015 was the exact opposite.

IPO 40

IPO Term Sheet Valuation Silicon Valley 40

Hunter Walker

DECEMBER 18, 2015

Bloomberg’s article about lower-than-expected financial gains from startup IPOs for midlevel employees stuck in craw this week because there’s a handful of complex issues at play here. You join at an executive level pre-IPO for a company that already has huge potential. Post IPO, You Have Choices: Hold or Sell.

Equity 48

Equity Employee IPO Vesting 48

Both Sides of the Table

JUNE 17, 2017

70–80% of the costs of most startups are employee costs so what you’re really talking about when a company is unprofitable is that they are growing their staff ahead of their revenue. They got a bigger office space so their employees would feel comfortable and they could improve employee retention.

Stock Options 227

Stock Options Startup Dilution Venture Capital 227

Both Sides of the Table

SEPTEMBER 28, 2013

A cautious person wouldn’t try to pry people out of Twitter right before their IPO to” join my cause!!” An employee walks up to me and says, “Mark, I’m thinking about buying a house. Most employees want cruising altitude, most founders live in take off mode. Dilution / valuation. ” Yes.

Startup 417

Startup Dilution San Diego Stock Options 417

Startup Professionals Musings

DECEMBER 14, 2014

The downside is loss of control and financial dilution. The right motivated employees dilemma. If you take investor money, expect a push for hockey-stick growth and a liquidity event, like going public (IPO) or sale (M&A), to get the payback. Should you start a company solo or find co-Founders to help you?

Hockey Stick 268

Hockey Stick Cofounder Entrepreneur Liquidity Event 268

Haystack

JULY 8, 2018

So, that’s why I’m writing this short post specifically for 1) employees of early-stage startups and 2) the earliest investors in these startups, who are often themselves new to the entire sector. For employees at early-stage companies… the equity you’ve been granted is likely common stock, just like the founders.

Early Stage 95

Early Stage Dilution Private Equity Common Stock 95

Startup Professionals Musings

AUGUST 19, 2017

The downside is loss of control and financial dilution. The right motivated employees dilemma. If you take investor money, expect a push for hockey-stick growth and a liquidity event, like going public (IPO) or sale (M&A), to get the payback. Should you start a company solo or find co-founders to help you?

Hockey Stick 144

Hockey Stick Cofounder Entrepreneur Liquidity Event 144

Both Sides of the Table

SEPTEMBER 18, 2014

Less than you’ll probably grant your most junior employees in stock options? And now I have to explain to team that they’re taking more dilution than they expected if we do a down round. Me: More dilution? Maybe an IPO – who knows? Him: Not so good. Obviously he’d be pissed off. Me: I know.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Startup Professionals Musings

JULY 19, 2013

The downside is loss of control and financial dilution. The right motivated employees dilemma. If you take investor money, expect a push for hockey-stick growth and a liquidity event, like going public (IPO) or sale (M&A), to get the payback. Should you start a company solo or find co-Founders to help you?

Founder 245

Founder Hockey Stick Cofounder Liquidity Event 245

Startup Lessons Learned

JULY 5, 2010

I used to give copies of Four Steps out to my employees, in the hopes that it would instantly indoctrinate them into the methodology of Customer Development. Brant and Patrick undertook a difficult challenge: to provide a generally accessible introduction to Customer Development, without diluting its impact or dumbing-down its principles.

Customer Development 166

Customer Development Developer San Francisco Customer 166

Tim Keane

JANUARY 12, 2010

Next, they carefully consider the range of multiples being used today to value companies being acquired or doing IPOs in the market that the business is in.   A full ratchet anti-dilution clause is very unfriendly to entrepreneurs; it requires them to make up the entire difference in price from their own holdings.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

www.payne.org

SEPTEMBER 22, 2011

Startup Equity For Employees. 3 Dilution. NOTE: If youre an attorney or tax accountant with experience helping startup employees with stock and option issues, drop me a note. The preferred stock held by investors has (as the name implies) more rights and privileges than the common stock issued to employees. 4 Vesting.

Equity 56

Equity Employee Vesting Preferred Stock 56

www.paulgraham.com

APRIL 28, 2010

In an IPO, it might not merely addexpense, but change the outcome. Those remedial actions can delay, stall or even kill the IPO. Of course the odds of any given startup doing an IPO are small.But not as small as they might seem. Whatkind of anti-dilution protection do they want? They just want to invest in this startup.

Technical Review 76

Technical Review Startup Software Review Vesting 76

www.mattbartus.com

SEPTEMBER 24, 2011

We will grant him/her X% fully diluted shares up front, and every time he/she makes an introduction, he/she will vest in 100 shares.” People tend to underestimate how much record keeping is involved with managing employees and consultants, and this just adds an unacceptable extra burden. link] Casey Allen. Matt: Fantastic posts.

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

discuss.joelonsoftware.com

NOVEMBER 1, 2010

Right now, my business is just myself and a part-time employee who does support, testing, and product usability design. gl3nn chan Friday, October 10, 2008 Deleting … Approving … Perhaps a good way to think about this is that the sweat equity partner is a blend of angel investor and employee. The key here is motivation.

Sweat Equity 40

Sweat Equity Equity Angel Investor Affiliate 40

Austin Startup

NOVEMBER 25, 2018

My first day at Bazaarvoice was just a few weeks later, on May 2, 2005, and we built a company from inception to IPO on around $12m of capital use (out of the $24m we raised) in 7 years, creating over a thousand jobs and impacting clients all over the world?—?starting Below is a post I wrote on their Yahoo! Groups list on March 15, 2005.

Bootstrapping 48

Bootstrapping Austin Cofounder Equity 48

Startup Lessons Learned

OCTOBER 26, 2009

Every two months, the company would have a big end-of-milestone meeting, with our Board of Directors, Business Advisory Board, and all employees present. Every time you listen to customers, you fear diluting your vision. Every time you listen to customers, you fear diluting your vision. That’s natural.

Advisory Board 151

Advisory Board Customer San Francisco Lean 151

Reid Hoffman

JUNE 8, 2021

Airbnb was preparing for an IPO right when the pandemic hit, and everything changed in a matter of days. And then how would you prompt other entrepreneurial leaders to think more broadly about stakeholders than even just investors, employees, customers, which tends to be the typical trifecta? BC: Exactly, Reid.

Silicon Valley 69

Silicon Valley Hosting Rhode Island Design 69

The Equity Kicker

APRIL 13, 2012

Throughout our evolution, from privately held start-up to large, publicly listed company, we have managed Google for the long term — enjoying tremendous success as a result, especially since our IPO in 2004. Having the flexibility to use stock without diluting our structure will help ensure we are set up for success for decades to come.

Dilution 87

Dilution Stock Government SEC 87

Gust

SEPTEMBER 17, 2014

Less than you’ll probably grant your most junior employees in stock options? And now I have to explain to team that they’re taking more dilution than they expected if we do a down round. Me: More dilution? Maybe an IPO – who knows? Him: Not so good. Obviously he’d be pissed off. I hadn’t really thought about it.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Reid Hoffman

JUNE 8, 2021

Airbnb was preparing for an IPO right when the pandemic hit, and everything changed in a matter of days. And then how would you prompt other entrepreneurial leaders to think more broadly about stakeholders than even just investors, employees, customers, which tends to be the typical trifecta? BC: Exactly, Reid.

Silicon Valley 36

Silicon Valley Hosting Rhode Island Design 36

www.paulgraham.com

OCTOBER 23, 2010

They get the same kind of stock and get diluted the same amount in futurerounds. So the deals take longer, dilute you more, and imposemore onerous conditions. They didnt talkWall Streets language when they did their IPO, and Wall Streetdidnt buy. Usually angels are financially equivalent to founders. This is ridiculous, really.

Startup 105

Startup Cofounder Software Stock 105

www.mattbartus.com

DECEMBER 9, 2012

If you are a company that is fundraising, keep in mind that there are a few different levers you can pull to change the amount of dilution that the founders will experience. Let’s say you receive a term sheet for a $1 million investment at a $3 million fully diluted pre-money valuation, and you’re kind of disappointed.

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40

Austin Startup

AUGUST 1, 2017

By driving the valuation up, you’re usually not reducing your dilution in the round; you’re just increasing the size of the check they need to write in order to get to their desired %. When I hear someone complain that Texas hasn’t seen a lot of strong tech IPOs recently, my response is “so there’s no other way to be successful?”

Liquidation Preference 48

Liquidation Preference Common Stock Valuation Silicon Valley 48

www.paulgraham.com

APRIL 28, 2010

Dilution is normal. They cant dilute you without diluting themselves justas much. And they wont dilute themselves unless they end up net ahead. 5% of the company at the pointwhere it IPOs, and you are very happy because your $50,000 hasbecome $5 million. [ So its your choicewhether you get diluted. [

Angel Investor 63

Angel Investor Dilution Syndicate Syndication 63

Austin Startup

MARCH 7, 2021

In 2019 and 2020, we saw hundreds of millions of dollars in non-dilutive funding go to Texas startups, most of which had never worked with the government before. In 2020, the Google for Startups Black Founders Fund awarded $5M of non-dilutive capital to exceptional black founders and 8 Texas founders took a big chunk of it.

Texas 90

Texas San Antonio Houston Dallas 90