Hunter Walker

MAY 7, 2014

That’s fine – early stage founders aren’t expected to know everything. Building a senior team but pushing back on having a healthy employee option pool? We like to get a feel for what attributes you’re prioritizing and do you know what questions to ask in order to assess. Won’t work out well.

Hiring 108

Hiring Option Pool Early Stage Term Sheet 108

The Startup Lawyer

FEBRUARY 4, 2011

As equity in the company tends to be the currency of early stage startups, the startup should have a good foundation for assigning value in terms of equity. Other incubators may want to set up an option pool. If so, the startup’s founders need to know this option pool lowers your pre-money valuation.

Incubator 105

Incubator Pre-Money Valuation Option Pool Advisory Board 105

techcrunch.com

FEBRUARY 25, 2010

You could make the same argument about acquisitions and option pools. This is probably why investors’ case for a company to sell early f ocuses exclusively on the founder : in most early-stage acquisitions, the liquidation preferences and deal-sweeteners only work for investors and founders.

Liquidation Preference 63

Liquidation Preference Founder Option Pool Acquisition 63

Tim Keane

JANUARY 12, 2010

For angel groups, the distinction between groups and VCs on this issue is dwindling, especially as angel groups do bigger rounds of financing.   Note that this applies only to earl stage Series A-type equity financings and assumes no cash dividends are paid to investors.   First , dividends.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

www.instigatorblog.com

OCTOBER 23, 2010

I recognize that it’s challenging to give much more than the accepted guidelines on equity to early startup employees. You can’t have an option pool that takes up 50% of the company’s shares, and you have to leave room for future employees as well. the better the startup will be. Thank you and great post bud.

Equity 41

Equity Employee Startup Vesting 41

Professor VC

JANUARY 17, 2008

He then went on to say that this type of financing was good for the entrepreneur (vs taking VC money) because they got to keep more of the company. At a $1 million, pre-money, with an investment of $500K, that would leave 67% of the company for the founders and initial option pool.

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

Both Sides of the Table

FEBRUARY 22, 2011

The most tempting thing to do in a financing is to find two investors to split a deal. When you consider that they’ll also want a 15-20% option pool in the company you’re talking about founders owning as little as 40% after just one round. If you select a lead VC make sure they’re stage appropriate.

Dilution 314

Dilution Cap Table Due Diligence Option Pool 314

www.payne.org

SEPTEMBER 22, 2011

The total preference is less of an issue in early stage companies (e.g. However, it can be a significant issue in later stage companies that have raised a lot of money. The common stock price is usually a fraction of the preferred price, at least in the early stages. Series A), because its relatively small.

Equity 56

Equity Employee Vesting Preferred Stock 56