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Venture Capital Q&A Session

Both Sides of the Table

Mark Jeffrey - Q: “Is it more traditional to do your ESOP (employee stock option plan) before or after your angel or Series A funding?&# I talked about the need to have a restricted stock plan for your earliest employees. You’re not screwing me – you’re screwing your fellow employees.

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How do you pay an early stage board?

Berkonomics

The option price should be set by appraisal under IRS rule 409a, and certainly should be low enough to recognize that common stock options are not worth as much as preferred stock, given the many preferences of the latter. Expenses for travel are often reimbursed by the corporation.

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Equity for Consultants – Keep it Simple!

www.mattbartus.com

People tend to underestimate how much record keeping is involved with managing employees and consultants, and this just adds an unacceptable extra burden. Share this: Facebook Email Reddit StumbleUpon. First, you’d probably want them to receive common stock, not preferred stock (which is the likely next round).

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VC investors: Don’t be greedy even if you can.

Berkonomics

Most sophisticated investors will take either a promissory note or preferred stock, both of which come before founder or management stock in a sale or liquidation. The order of liquidation or payout. Here’s an example that will make your heart skip a beat.

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Angels and VCs: Don’t be greedy even if you can.

Berkonomics

Most sophisticated investors will take either a promissory note or preferred stock, both of which come before founder or management stock in a sale or liquidation. Further, preferred stock holders can be recipient of accrued dividends in a sale or liquidation.

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Early stage boards work for stock options, not cash.

Berkonomics

The option price should be set by appraisal under IRS rule 409a, and certainly should be low enough to recognize that common stock options are not worth as much as preferred stock, given the many preferences of the latter. Email readers continue here.] Expenses for travel are often reimbursed by the corporation.

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How to Raise a Seed Round: Three Basic Tips for Founders

Scott Edward Walker

Emailing or cold-calling them generally doesn’t work. Instead, you typically need a “warm referral” (or introduction) from someone they respect and trust — preferably a successful founder whom they have backed. The hard part, of course, is getting in front of “A” investors to pitch your startup.