Both Sides of the Table

SEPTEMBER 18, 2014

It’s like we need a finance 101 course for entrepreneurs. In finance they call it “terminal value” but the truth is the price is as arbitrary at your A round as it is at your seed round. There are a bunch of ways to offer cheaper pricing to people who commit early without notes. There were no metrics.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Duct Tape Marketing

FEBRUARY 27, 2014

Equity Crowdfunding: Your Solution for Small Business Financing? But in order to travel, add personnel, and execute on expansion plans in the coming year, many small businesses will need financing… which is where things get tricky. Crowdfunding for Small Business: Marketing and Financing. The first is marketing.

Equity 60

Equity Finance Small Business Accredited Investor 60

Up and Running

MAY 3, 2012

And besides, obtaining early-stage investment is no guarantee of success, either. This cheerleading often comes from those with vested interests, rather than from successful entrepreneurs who have successfully exited businesses and are looking to encourage the next generation. Surely we can do better?

Entrepreneur 82

Entrepreneur Technical Review Silicon Valley Lean 82

Hunter Walker

AUGUST 24, 2014

In retrospect I lost a lot of future gains by cashing out too early but what I gained was more important: peace of mind in removing the only debt I’d ever carried. The vast majority of my future savings was (a) not vested yet and (b) tied to hope for future stock grants I’d earn.

Founder 108

Founder San Francisco Liquidity Event LP 108

www.instigatorblog.com

OCTOBER 23, 2010

The more that those first employees feel like founders in terms of their ownership, emotional attachment, responsibility and overall understanding of the startup process (including financing , running day-to-day activities, etc.) I do believe that early employees should trade salary for equity. the better the startup will be.

Equity 41

Equity Employee Startup Vesting 41

Berkonomics

MAY 15, 2014

Just a few of these terms include vesting, corporate structure, governance principles, financing strategy, valuation and exit strategy. Basil Peters is perhaps the best known name in the world of early stage company exits.

Term Sheet 91

Term Sheet Angel Groups Angel Investor Deal Structure 91

Up and Running

AUGUST 10, 2016

Prior to this, if you were an entrepreneur, your options for financing came down to your own personal savings, credit cards, banks (if you qualified), and angels or VCs (if you were one of the lucky few). They were initially seeking $250,000 to finance the construction of the restaurant and working capital. times what they put in.

Securities and Exchange Commission 60

Securities and Exchange Commission Vesting Equity Houston 60

Austin Startup

AUGUST 20, 2017

Early stage startups have to survive one day at a time and are often presented with limited choices of the moment that enable them to continue. At early stages you probably don’t have an assembly line and can’t clearly define any particular job. But, later on they often wish they had the ability to erase many of them.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

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

Gust

SEPTEMBER 17, 2014

It’s like we need a finance 101 course for entrepreneurs. In finance they call it “terminal value” but the truth is the price is as arbitrary at your A round as it is at your seed round. There are a bunch of ways to offer cheaper pricing to people who commit early without notes. There were no metrics. Last year …. Truthfully.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

www.startuplessonslearned.com

MAY 4, 2012

They assume that the tasks that they are performing during the early stage of startup development are the same tasks that will be performed during the next and very different stages. They assume that their skills will remain as valuable to the startup as they are right now. How should founders deal with such developments?

Equity 72

Equity Founder Technical Cofounder Cofounder 72

The Startup Magazine

AUGUST 11, 2017

The press release lays out Joe Zhu’s business accomplishments, but we at the magazine have seen firsthand Joe Zhu’s work behind the scenes helping struggling startups with advice and counsel on both business strategy and funding, even when he has no vested interest.

Illinois 78

Illinois Chicago Entrepreneur Cofounder 78

www.payne.org

SEPTEMBER 22, 2011

4 Vesting. 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. You usually dont get all of your stock up front; it vests over a period of time, starting from your first day at work. 3 Dilution.

Equity 56

Equity Employee Vesting Preferred Stock 56

Both Sides of the Table

AUGUST 17, 2009

I had multiple term sheets to do my Series A financing. There was one firm that offered me an entrepreneur friendly “vanilla&# term sheet and that was True Ventures , which is why I believe they are attracting great early-stage entrepreneurs. Without proper vesting you also place a risk on all other co-founders.

Founder Vesting 252

Founder Vesting Vesting Founder Term Sheet 252

The Next Web

OCTOBER 7, 2013

However, at the very early stage, they are taking as much risk with their future as the founders. It is typical for employees to vest their options over four years with a one year cliff, which means a new hire must stay on the company for at least one year to see any shares. Engineer #1? How do you feel about that number?

Engineer 129

Engineer Dilution Option Pool Vesting 129

Startup Lessons Learned

APRIL 24, 2012

They assume that the tasks that they are performing during the early stage of startup development are the same tasks that will be performed during the next and very different stages. They assume that their skills will remain as valuable to the startup as they are right now. How should founders deal with such developments?

Equity 168

Equity Founder Cofounder Vesting 168

Professor VC

FEBRUARY 26, 2008

As I mentioned in the previous post, Jeff Fluhr (founder of StubHub) recently stopped by my Entrepreneurial Finance class to share his 4 Lessons of Entrepreneurship with the students. In the early days, Jeff spent a lot of time with state legislators to get beyond the stigma of "ticket scalping" and change regulations.

Technical Review 28

Technical Review San Jose Angel Investor Silicon Valley 28

techcrunch.com

FEBRUARY 25, 2010

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. The team gets another $3 million as a severance payment or an earn-out, to sweeten the acquisition offer.

Liquidation Preference 63

Liquidation Preference Founder Option Pool Acquisition 63

Rob Go

MARCH 20, 2013

Fourth, when major team members start vesting serious chunks of their equity and start finding themselves unmotivated or lured by other companies. Find good financing partners. You want to find financing partners who help you in the situations described above, don’t become yet another impediment.

Bootstrapping 46

Bootstrapping Finance Dividend Vesting 46

David Teten

DECEMBER 3, 2019

Data companies focused on early-stage startups include Aingel , fundsUP , Preseries , PredictLeads , and Sploda. The Pocket Negotiator is very early-stage attempt to aid in the negotiating process itself. ExitRound helps early stage companies identify buyers in smaller exits. . What’s Your VC Tech Stack?

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

David Teten

MARCH 12, 2012

The feature, titled “ Fitness Financed: Motion, Margin, Risk & Reward ,” offers an inside look into our office.). ” - MIR Weighted Vest (~$130 on up) for providing an additional option for exercising, both at home and at the office. Using a weighted vest while working at a standing desk can be a meaningful workout.

Product 166

Product Portfolio Venture Capital Vesting 166

dondodge.typepad.com

JANUARY 15, 2011

Entrepreneurs face some pretty tough questions at a very early stage. How much equity should I grant to early employees? It isnt always possible to have a competitive bidding situation at each financing round so here are some guidelines for funding sources and percentages. Should I take Angel or VC money? 5% Managers -.25%

Equity 40

Equity Employee Dilution Valuation 40

venturehacks.com

FEBRUARY 24, 2010

Two founders works because unanimity is possible, there are no founder politics, interests can easily align, and founder stakes are high post-financing. Build in founder vesting (a.k.a. How to build your core team for early-stage startup? When 4-5 founder companies work, it’s because two founders dominate.

Cofounder 101

Cofounder Founder Technical Cofounder Technical Review 101

Professor VC

SEPTEMBER 24, 2009

The point is their opinions werent clouded by any vested interest or lengthy analysis. I take CFO roles in early stage companies and participate on the management team during the early financings and business model development phases. I also teach Entrepreneurial Finance at San Jose State.

San Jose 33

San Jose Angel Investor Venture Capital Mezzanine 33

Up and Running

SEPTEMBER 20, 2021

The popularity of convertible notes is increasing in the world of startup financing, especially in seed-stage companies. It is attractive for seed-stage companies that have not had time to show much traction in terms of their product or revenue. For any (early stage) startup, the team is the most critical asset.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

www.quora.com

SEPTEMBER 22, 2011

Even better, executives will negotiate the acquisition price of their company down; in exchange for a larger amount of post-acquisition retentio n equity and accelerated vesting. Some finance guy said "12k a month minimum" and someone replied "I must be living in abject poverty" and its true.

Equity 40

Equity Employee Founder Cofounder 40

Professor VC

OCTOBER 11, 2010

Also, be sure to include vesting for all founders. If there are any promises (written, verbal or otherwise) regarding equity, address early rather than later. I take CFO roles in early stage companies and participate on the management team during the early financings and business model development phases.

Social Network 28

Social Network Networking Software Review San Jose 28

maplebutter.com

JANUARY 8, 2013

If you believe in it – then finance whatever you can yourself. When it comes to early stage investing – it’s all gut. Does it make sense to spend this time speaking about your early stage start-up when your product has not even entered Alpha testing? Other sources of capital.

Technical Review 44

Technical Review Startup Cofounder Software Review 44

www.readwriteweb.com

FEBRUARY 23, 2010

7: Invest in Advisors : Give away a small amount of stock to advisors (which they can vest after a few years) who you can call on in a pickle or for general advice as issues arise. Photo credit: althecat See Also The Startup Financing Dating Game: Courting Potential Investors Be Prepared!

Entrepreneur 69

Entrepreneur Venture Capital San Francisco New Zealand 69