Startup Professionals Musings

JULY 9, 2014

Founders stock, and stock options, will be worth nothing for the first several years, if not forever. The partner most obsessed with the startup lifestyle tests the water by going to work in an early-stage startup, similar to one they might hope to start someday. Who gets stock options, and how many?

Technical Review 250

Technical Review Stock Options Due Diligence Silicon Valley 250

View from Seed

APRIL 27, 2020

Others are just starting out, but the financial safety net they thought they had from a spouse’s job or highly appreciated stock options has disappeared. Some are staring into the abyss and they know they are not going to get out. This is scary. It’s going to last a while, and it’s going to be incredibly hard. Number of Investments.

Cofounder 194

Cofounder Software Review Portfolio Technical Review 194

Berkonomics

OCTOBER 26, 2010

Many early stage CEOs and board members have asked for some guidance regarding pay and time commitments for board members. Pay early stage board members of companies that are not lifestyle businesses one percent of the fully diluted equity in the form of an option that vests over four years of service.

Stock Options 66

Stock Options Early Stage Stock Vesting 66

Both Sides of the Table

JANUARY 21, 2010

Forget to get around to setting up that Employee Stock Option Plan and want to be able to give the early guys their options at a low strike price? They want to lock in future clients at an early stage. They usually ask for warrants (basically like a stock option) in exchange for taking a deferred fee.

Southern California 318

Southern California Silicon Valley IP Stock Options 318

Austin Startup

JULY 15, 2019

Capital Factory has been the most active early stage tech investor in Texas since 2013. Do you have an understanding of venture capital terminology and common structures such as convertible notes, SAFEs, stock options, warrants, and early stage equity transactions? We did 70 transactions in 2018 alone!

Texas 56

Texas Technical Review Silicon Valley Venture Capital 56

Startup Professionals Musings

OCTOBER 18, 2015

Founders stock, and stock options, will be worth nothing for the first several years, if not forever. The partner most obsessed with the startup lifestyle tests the water by going to work in an early-stage startup, similar to one they might hope to start someday. Who gets stock options, and how many?

Technical Review 120

Technical Review Entrepreneur Stock Options Due Diligence 120

Startup Professionals Musings

APRIL 10, 2016

Early stage burn rates over $50K per month, or a runway of less than six months may indicate an inefficient or desperate startup. Calculate employee stock option values and vesting times, as well as salary. Think twice before you jump in. How complex is the capitalization table?

Sweat Equity 120

Sweat Equity Burn Rate Technical Review Intellectual Property 120

YoungUpstarts

MAY 7, 2017

I think it’s important to establish who your mentors will be at the early stage of your career. I think that saying holds a lot of weight when I think back at the beginning stages of my career. There’s an old saying that it’s better to choose your next manager versus your next company.

Silicon Valley 183

Silicon Valley Technical Review Product Canada 183

Berkonomics

JUNE 29, 2017

Shortly thereafter, in a board meeting, I brought up the issue of starting to pay board members for service in cash or in stock options, typical for outside board members but rarely for investors. The entrepreneur was angry, abusive, in his negative reaction to even bringing the issue to the board for a discussion.

Early Stage 97

Early Stage Stock Options Stock Audio 97

Startup Professionals Musings

APRIL 8, 2015

Early stage burn rates over $50K per month, or a runway of less than six months may indicate an inefficient or desperate startup. Calculate employee stock option values and vesting times, as well as salary. Think twice before you jump in. How complex is the capitalization table?

Technical Review 120

Technical Review Due Diligence Sweat Equity Burn Rate 120

Berkonomics

DECEMBER 6, 2010

Use stock options and warrants to pay for service only rarely. Earlier, I stated that stock options are the currency of early stage business. When assessing the relative merit of using attractive non-cash forms of compensation for outside services, first be aware of the true value of your stock.

Stock Options 61

Stock Options Stock Warrant Common Stock 61

Startup Professionals Musings

FEBRUARY 7, 2020

Here are a few of my favorites sampling techniques that I have seen work out well over the years: Take a job for a while with an early-stage startup. Founders stock and stock options are worth nothing for the first few years. The upside is the long-term potential of changing the world and becoming a billionaire.

Silicon Valley 315

Silicon Valley Entrepreneur Stock Options Flash 315

Both Sides of the Table

MAY 27, 2013

I would say the norm for many early-stage companies is somewhere between 6-10 in-person meetings per year. The earlier stage the more likely it is 10 meetings and the later stage the more likely it is 6. Ask for short conference calls. In either case it is very helpful to have a series of 30-45 minute calls in between.

Advisory Board 365

Advisory Board CTO Hire Fractional CTO Los Angeles 365

Berkonomics

JUNE 26, 2014

Angel investors, particularly those in organized angel groups, are typically former entrepreneurs who have had successful liquidity events in their pasts, or executives of companies who’ve retired with the funds from their stock options.

Liquidity Event 76

Liquidity Event Technical Review Due Diligence Angel Groups 76

Up and Running

DECEMBER 1, 2015

If however you are giving a “normal employee” an incentive stock option plan (more on that later), that’s entirely different. Make sure you understand all of your options before making any decisions. When business owners decide to go down the route of equity compensation, there are two primary options to choose between.

Equity 60

Equity Employee Stock Options Vesting 60

Both Sides of the Table

MAY 2, 2015

What I love about my job is getting to see teams of super-early-stage companies develop ideas that while raw have potential to make an impact on the market. than to have to deal with healthcare benefit options, vacation policies, health-and-safety regulations and so forth. It literally can put you out of business.

Operations 150

Operations Metrics Early Stage Non-Compete 150

Women Entrepreneurs Can

NOVEMBER 23, 2023

These include health, dental, and vision insurance; retirement plans; paid time off; supplemental health and life insurance; and bonuses and stock options. Another popular retirement benefit is stock options, offered to early-stage companies before they go public.

Employee 52

Employee Stock Options Salary Hawaii 52

prosperati.com

OCTOBER 23, 2010

You work long hours at below-market rates for stock options, a chance to participate in the financial payout of the company’s success. In order for stock options to work, your employees must first have a vision of what stock options can do for them. Part 1 How To Evaluate Early-Stage Web 2.0

Offshore 40

Offshore Malaysia Developer Stock Options 40

Steve Blank

MARCH 16, 2016

Some quick VC math : If a VC invests in ten early stage startups, on average, five will fail, three will return capital, and one or two will be “winners” and make most of the money for the VC fund. You need at least a 5x return to generate rewards for investors and employee stock options. Don’t demoralize your employees.

Liquidity Event 120

Liquidity Event Founder Liquidation Preference Venture Capital 120

Scalable Startup

AUGUST 9, 2018

At this stage you’re essentially selling yourself and your cofounders. That’s why much early stage funding is “Friends and Family”; your friends and family naturally overrate you and/or can’t say no. You are being judged on your resume, trust and the excitement you can build. They’re betting on you.

Technical Cofounder 20

Technical Cofounder Silicon Valley Early Stage Cofounder 20

David Teten

AUGUST 1, 2019

Joining An Early Stage Startup? Negotiate Your Equity And Salary With Stock Option Counsel Tips. Private company stock option grants: a founder’s guide to who gets what, when. How to assign stock options in early-stage startups. Guide to Startup Stock Option Grants.

Private Equity 60

Private Equity Equity Due Diligence Portfolio 60

David Teten

SEPTEMBER 10, 2019

Joining An Early Stage Startup? Negotiate Your Equity And Salary With Stock Option Counsel Tips. Private company stock option grants: a founder’s guide to who gets what, when. How to assign stock options in early-stage startups. Guide to Startup Stock Option Grants.

Due Diligence 60

Due Diligence Stock Options Covenant Private Equity 60

Berkonomics

JANUARY 25, 2024

And some will willingly work for stock options, an amount to be negotiated based upon time spent and stage of corporate development. A warning about those willing to take advantage: There must be many more creative ways to pay a coach, especially for early-stage businesses. It is worth asking.

SBA 62

SBA Warrant Stock Options Vesting 62

Scalable Startup

OCTOBER 26, 2014

The Greenshoe is an over-allotment of stock options, up to 15% of the total offering at time of IPO. You can offer these options to virtually anyone, friends, family, people who helped your company. Since they’re options, acquirers only exercise if the stock goes up, and have no downside risk or capital outlay.

Silicon Valley 25

Silicon Valley Hawaii Angel Investor IPO 25

ReadWriteStart

FEBRUARY 13, 2020

Public venture funding has become a valuable avenue for growth for early-stage businesses in the sector, helping to put Canada’s tech industry on the map for professionals both locally and abroad. million for early-stage companies and the US $42.2 million for late-stage companies in the United States.

Canada 127

Canada Government Venture Capital Early Stage 127

Scalable Startup

OCTOBER 26, 2014

The Greenshoe is an over-allotment of stock options, up to 15% of the total offering at time of IPO. You can offer these options to virtually anyone, friends, family, people who helped your company. Since they’re options, acquirers only exercise if the stock goes up, and have no downside risk or capital outlay.

Silicon Valley 20

Silicon Valley Hawaii Angel Investor IPO 20

Berkonomics

JANUARY 7, 2021

Think of startups and early stage businesses whose entrepreneurs you know. Email readers, continue here…] Often, if not co-founders, this group is rewarded through issuance of stock options from a pool of available options that usually totals 15-20% of the total company’s equity divided among all employees.

Liquidity Event 96

Liquidity Event Pre-Money Valuation Cofounder Initial Public Offering 96

YoungUpstarts

MARCH 11, 2015

With the daily demands of running a business along with the financial pressures and challenges inherent in early-stage companies, a business valuation may not be the first thing an entrepreneur thinks of when he awakes each morning. The timing will vary depending on the purpose.

Valuation 100

Valuation Stock Options CPA Merger 100

Both Sides of the Table

JANUARY 2, 2014

And it’s why many early-stage companies blow up. It’s why I wrote a post outlining why the job of a CEO is often “chief psychologist” – especially if the company grows beyond 20 employees.

Startup 385

Startup Stock Options Cofounder Campaign 385

Both Sides of the Table

SEPTEMBER 18, 2014

Less than you’ll probably grant your most junior employees in stock options? Stock Option plans. How do you think they’ll feel if your next round is at a $50 million post money valuation and their hard-earned $25,000 is worth 0.05% of your company? Him: Not so good. Obviously he’d be pissed off.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Startup Professionals Musings

DECEMBER 16, 2013

If the company was incorporated five years ago, and is still in early stages, with the same founding team, chances are slim that it will suddenly get back on track with you as an employee, or you as an investor. What’s the total history of this company? Gaps in the history of a startup are big red flags, just like gaps in your resume.

Due Diligence 253

Due Diligence Sweat Equity Intellectual Property Burn Rate 253

Gust

APRIL 9, 2014

Over time, other people receive pieces of equity in exchange for work (employee stock options), money (seed, angel and venture investors), services (attorneys, directors, etc.). The Founder of a company starts by owning all the shares representing ownership of the company.

Dilution 150

Dilution Equity Vesting Stock Options 150

Startup Professionals Musings

NOVEMBER 2, 2012

If the company was incorporated five years ago, and is still in early stages, with the same founding team, chances are slim that it will suddenly get back on track with you as an employee, or you as an investor. What’s the total history of this company? Gaps in the history of a startup are big red flags, just like gaps in your resume.

Due Diligence 244

Due Diligence Sweat Equity Burn Rate Intellectual Property 244

Gust

JULY 23, 2012

Q: Wouldn’t a contribution of early-stage company stock have a very small impact? In fact, the contribution of early-stage company stock can have tremendous impact. Take an example where you donate 25,000 shares of common stock with a value of $0.20 per share.

Stock 114

Stock Capital Gains Warrant Stock Options 114

View from Seed

AUGUST 6, 2015

For startup employees who’ve not encountered equity before, there are resources online that will take you through the specific terms and changes in equity value over the lifetime of an early stage company. What’s the strike price ($ value per) of the options I’m being granted?

Equity 120

Equity Employee Cap Table Stock Options 120

View from Seed

AUGUST 6, 2015

For startup employees who’ve not encountered equity before, there are resources online that will take you through the specific terms and changes in equity value over the lifetime of an early stage company. What’s the strike price ($ value per) of the options I’m being granted?

Equity 120

Equity Employee Cap Table Stock Options 120

Both Sides of the Table

JUNE 28, 2011

They built industrial-scale funds dedicated to backing early-stage startups with $500k rather than $5 million. More recently great funds like IA Ventures, Floodgate, Rincon Ventures, Founder Collective, Freestyle Capital and others have raised money to focus on early-stage investing as a strategy.

Venture Capital 334

Venture Capital Software PHP Open Source 334