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Equity for Early Employees in Early Stage Startups

SoCal CTO

I was asked by a reader how much equity he should give out to early employees and to service providers in a very early stage startup. Founders vs. Early Employees To help with this discussion, let me start with a definition of "early employee." I'll get to service providers in a later post.

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CMO CTO COO Equity and Compensation

SoCal CTO

I know a lot more about CTOs specifically CTO Salary and Equity Trends 2009-2011 , Visualization of Startup CTO Equity and Salary Data , Startup CTO Salary and Equity Data , but I've previously written about the issues with Equity for Early Employees in Early Stage Startups.

CTO Hire 329
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Want to Know How VC’s Calculate Valuation Differently from Founders?

Both Sides of the Table

I’m not sure I really even need to write this at length because Nivi absolutely nailed the topic in his article “ The Option Pool Shuffle.&#. When I went to raise money in 2006 I thought I knew every term in a term sheet but somehow I still got a bit duped by the option pool shuffle. No option pool shuffle.

Valuation 405
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Beware of Premature Merge Elation

Both Sides of the Table

The only thing worse than your early-stage company buying another early stage company is you trying to pull off a merger of equals. If they raise a bunch of capital little ole you isn’t going to be around to have your option pool topped up. Don’t trade your cat for somebody else’s dog.

Merger 276
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What is it Like to Negotiate a VC Round?

Both Sides of the Table

In the old days there usually weren’t convertible notes on early-stage deals and there weren’t party rounds with 20 angels or 6 seed funds. So how DOES a VC think about financings at early stages? How much is in the option pool? It’s very simple. Why do investors care about this?

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Why I left Wall Street to figure it out.

Austin Startup

So I have embraced it fully, and though we are still in the early stages (seed stage), it’s the hardest thing I have ever done yet it’s the most fulfilling thing to me. legal fees in the early stages. No class, no community project, and certainly no job straight of college can teach you all this?—?or

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Quick Post on Post-Money Valuations

Rob Go

When I first started out as a VC nearly 9 years ago, most early stage company valuations were expressed as pre-money valuations. Founders also had to do a little math on the new option pool to really understand what their ownership would be post investment, since it was typically taken out of the company pre-money.