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5 Equity Distribution Parameters For Key Contributors

Startup Professionals Musings

You need to find the skills or experience you don’t have in business, technology, or money. Investors may not be called cofounders, but they always get equity, commensurate with their share of the total costs anticipated, or share of the current valuation. Giving a cofounder a salary won’t get you the “fire in the belly” you want.

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What Does the Post Crash VC Market Look Like?

Both Sides of the Table

We drew this conclusion after a meeting we had with Morgan Stanley where they showed us historical 15 & 20 year valuation trends and we all discussed what we thought this meant. But rest assured valuations get reset. When you look at how much median valuations were driven up in the past 5 years alone it’s bananas.

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Why a Company Can’t “Be More Like a Startup”

Steve Blank

As more and more companies face disruption from globalization, new technology, and startups that have more capital than the incumbents, the continuing cry from Wall Street investors is, “Why can’t companies be as innovative as startups?”. Tesla – current valuation $50 billion – sells cars directly through its own distribution channel.

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Is the Lean Startup Dead?

Steve Blank

NewTV will depend on partners like telcos to distribute the content. Given Verizon just shut down Go90 , its short form content video service, it will be interesting to see if Verizon distributes Katzenberg’s offerings.). Then the cycle repeats with a new set of technologies. But NewTV doesn’t plan on testing these hypotheses.

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Seed Stage Funding 101: What it Is & How it Works

The Startup Magazine

Analysts perform a valuation of the company in question before the beginning of any round of funding. The management of a company, its established track record, the size of the market, and the level of risk all play a role in determining a company’s valuation. What is the Evaluation of the Funding?

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Business Prenup: What To Do Before You Start A Company With A Partner

YoungUpstarts

If you stop working for the company, how will that impact your voting and distribution rights? Is it prudent to have a set formula for valuation before you know how the company will perform or will you require the company to pay for an expert to value the company if one side wants to sell? Plan for your company’s eventual valuation.

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Getting A Software Patent Is Valuable But Frustrating

Startup Professionals Musings

I still generally advise software startups to file a patent as a barrier to entry from competitors and to increase their valuation by investors, but every entrepreneur needs to understand the tradeoffs. That’s more than a lifetime in today’s technology. Patent offices can’t keep up with software technology.