article thumbnail

What Founders Need to Know: You Were Funded for a Liquidity Event – Start Looking

Steve Blank

While you might be interested in building a company that changes the world, regardless of how long it takes, your investors are interested in funding a company that changes the world so they can have a liquidity event within the life of their fund ~7-10 years. (A You’ve been funded to get to a liquidity event.

article thumbnail

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. Which means n = (i - 1)/i.

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

Why good people leave large tech companies

Steve Blank

After the director left, I must have looked pretty surprised as the CFO explained, “We have tens of thousands of employees, and at the rate we’re growing it’s almost impossible to keep up with our space needs in the Bay Area. This founder’s reality distortion field attracted a large number of employees who shared his vision.

article thumbnail

10 Startup Founder Decisions That Have No Good Answer

Startup Professionals Musings

The right motivated employees dilemma. If you take investor money, expect a push for hockey-stick growth and a liquidity event, like going public (IPO) or sale (M&A), to get the payback. No one wants to put in money until you have a product, and you need money to build the product. Later you need specialists and managers.

Founder 325
article thumbnail

Start a deal room and keep it current.

Berkonomics

Well-maintained deal rooms enhance a company’s image with a buyer, quicken the pace of the deal, help maintain secrecy from employees while due diligence is in process, and lower the stress levels of all parties during the process. The liquidity event and beyond' Email readers, continue here.]

article thumbnail

Have you heard the rule of the thirds?

Berkonomics

So, co-management is the second group to share in the bounty upon a liquidity event. 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.

article thumbnail

10 Startup Quandaries That May Redefine Your Business

Startup Professionals Musings

The right motivated employees dilemma. If you take investor money, expect a push for hockey-stick growth and a liquidity event, like going public (IPO) or sale (M&A), to get the payback. No one wants to put in money until you have a product, and you need money to build the product. Later you need specialists and managers.