David Teten

MARCH 14, 2018

Managers of VC funds typically want to grow their business aggressively, just like the founders we back. This is a model used in at least one case by China’s third-largest private equity firm, China Science & Merchants Investment Management Group ($12 billion+ AUM), which funded in 2015 CSC Upshot, a $400m seed fund through AngelList.

Private Equity 60

Private Equity Venture Capital Equity Cofounder 60

Startup Professionals Musings

AUGUST 10, 2019

The right motivated employees dilemma. Later you need specialists and managers. 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. Bootstrap if you can, otherwise climb the pyramid of family, friends, angels, and VCs.

Hockey Stick 243

Hockey Stick Cofounder Liquidity Event Startup 243

Board Effect

MAY 13, 2019

Let’s not waste time listing everything startups could be doing to more effectively manage their cap tables. When it comes to cap table management in startup companies, it’s unrealistic to expect perfection. The realistic demands of cap table management will increase as your business grows and matures—that much is a no-brainer.

Cap Table 40

Cap Table Management Liquidity Event Dilution 40

Hunter Walker

SEPTEMBER 29, 2022

Below I’ll share some of the principles we use at Homebrew , knowing that there’s not really a single ‘right’ answer for a fund manager. So for the most part a venture investor holds their equity until the company exits via an acquisition, IPO, or some sort of other liquidity event (management buyout, whatever).

Venture Capital 122

Venture Capital Cap Table LP Equity 122

Up and Running

SEPTEMBER 19, 2017

Background: Justin Klemm’s analytics and website uptime startup, Ghost Inspector , wants to revolutionize the way businesses manage their ecommerce funnels. practice in mid-sized or large organizations and act more as employees than owners of the medical practice. Rule 1: Bootstrap until you have a viable product. Conclusion.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

Berkonomics

AUGUST 27, 2020

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. When to start a data room? The payoff. The post What’s a “data room” and how do you use it?

Software Review 62

Software Review Due Diligence Intellectual Property IPO 62

Gust

JUNE 7, 2014

The technical term for this is the “liquidation waterfall”, because on a liquidation event (whether good, as in a large buyout, or bad, as in a distress sale, investors (and others) get paid out in a specified order. So, here is the typical payout order, from first to last: 1) Salaries owed to employees.

Warrant 157

Warrant Preferred Stock Early Stage Common Stock 157

Startup Professionals Musings

DECEMBER 14, 2014

The right motivated employees dilemma. Later you need specialists and managers. 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. Bootstrap if you can, otherwise climb the pyramid of family, friends, Angels, and VCs.

Hockey Stick 268

Hockey Stick Cofounder Entrepreneur Liquidity Event 268

Berkonomics

JUNE 12, 2014

It is rare when one person starts a company, supplies all the funding, and shares no management tasks or equity with others, and still grows the company to any significant size, worthy of a multi-million dollar opportunity to cash out at exit. So co-management is the second group to share in the bounty upon a liquidity event.

Liquidity Event 85

Liquidity Event Pre-Money Valuation Cofounder Initial Public Offering 85

Berkonomics

JULY 5, 2018

Or if you’re an employee with stock options, are you aware of the increases in value you can make with your efforts? Then again, you may be an architect or doctor or other professional managing your. Ever think about growing your business with the plan to sell it someday, cashing in on your hard-earned work over the years?

Intellectual Property 90

Intellectual Property Management Stock Options Stock 90

Berkonomics

NOVEMBER 1, 2018

Some companies, especially those financed by angel or VC investors, have good, formal stock option plans with properly priced options set to reward all employees and managers in the event of a corporate sale. The marginal exit is most difficult, and it would be rare for an entrepreneur to willingly share with other managers.

Stock Options 192

Stock Options Stock Distribution Programming 192

Hunter Walker

MARCH 8, 2014

There aren’t yet four layers of management between you and the founders. The Early Team Still There and They’ll Be Your Tribe for Years : The founders and early team are still in place because there hasn’t been a liquidity event and the work is still exciting for them.

Liquidity Event 134

Liquidity Event Early Stage Seed Stage Startup 134

Startup Professionals Musings

AUGUST 19, 2017

The right motivated employees dilemma. Later you need specialists and managers. 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. Bootstrap if you can, otherwise climb the pyramid of family, friends, angels, and VCs.

Hockey Stick 144

Hockey Stick Cofounder Entrepreneur Liquidity Event 144

Steve Blank

JULY 15, 2010

Number of Venture Backed Liquidity Events 1991-2000. This changed their interest from managing your board for their liquidity to managing the board for all shareholders. Number of Venture Backed Liquidity Events 2000-2010. Take a look at the chart below. (It Source: NVCA.).

Venture Capital 297

Venture Capital IPO Liquidity Event Entrepreneur 297

Up and Running

SEPTEMBER 20, 2021

A cap table will help you in the strategic management of business decisions. A convertible note is like a loan, but this amount can be converted into company equity later on, usually during a liquidation event, like the acquisition of the company. Outline your plans for future employee stock option pools. Let’s dive in.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

Startup Professionals Musings

JULY 19, 2013

The right motivated employees dilemma. Later you need specialists and managers. 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. Bootstrap if you can, otherwise climb the pyramid of family, friends, Angels, and VCs.

Founder 245

Founder Hockey Stick Cofounder Liquidity Event 245

Berkonomics

SEPTEMBER 5, 2013

Such thoughts just do not occur to most of us until the business is substantially far enough along in its growth to have multiple layers of management and enough employees and stakeholders that there is a board of directors and calls for key man insurance and succession planning. The liquidity event and beyond'

Liquidity Event 73

Liquidity Event Employee Conversion Management 73

Board Effect

MAY 10, 2019

Cap tables list a company’s authorized and outstanding shares, the parties to which those shares have been assigned, and the various metrics relevant to managing them. Such metrics can include an investor’s liquidation preference, option exercise windows and expiry dates, and shareholders’ fully diluted ownership percentages.

Cap Table 40

Cap Table Liquidation Preference Dilution Liquidity Event 40

Berkonomics

JUNE 2, 2010

How about incentives for employees all the way down the line and through the corporation? But how about awarding stock options to all employees? . Tech companies, particularly early stage and startups, still award options aggressively. Email readers continue here.]

Liquidity Event 86

Liquidity Event Stock Options IPO Stock 86

Berkonomics

MAY 26, 2010

In a previous insight, we explored the common percentage of a company’s fully diluted stock that is often granted in the form of options for new employees. (See Many skilled, experienced executives have jumped from mature companies to more risky positions in smaller, fast growing enterprises primarily for the options.

Employee 54

Employee Liquidity Event Stock Options Salary 54

Berkonomics

SEPTEMBER 26, 2013

You’ve informed your top management of the pending deal and they know they will be impacted and are a bit skittish. First, should you inform your employees of the deal? The liquidity event and beyond' Everyone on the board is anxious to close this. You’ve committed time to do whatever is needed.

Due Diligence 85

Due Diligence Liquidity Event Intellectual Property SEC 85

Hunter Walker

AUGUST 24, 2014

When Google went public in August of 2004 one of the first things I did with my employee grants was sell enough to pay off my student loans. Did I work any less hard the next day because of my liquidity event? Done properly I don’t believe it will disincentivize or send wrong signals to employees or future investors.

Founder 109

Founder San Francisco Liquidity Event LP 109

Berkonomics

SEPTEMBER 14, 2011

Each book is dedicated to one subject: Starting up, raising money, positioning for success, growing your business, building great boards, protecting your business, managing your workforce, and finally – cashing out. Managing your message. MANAGING YOUR WORKFORCE. Styles of management. Managing bottlenecks.

Advisory Board 67

Advisory Board Small Business Investment Bankers Liquidity Event 67

Berkonomics

JANUARY 6, 2022

The order of liquidation or payout. 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. One tool often used: the “cutout” for management. Here comes the headline: So, this advice is directed to those investors.

Dividend 62

Dividend IRR Preferred Stock Participating Preferred 62

Berkonomics

SEPTEMBER 8, 2022

For corporate boards, even those not looking for a buyer at this time, I often help to manage this exercise in board meetings once every few years. Some potential buyers or strategic partners might want your intellectual property, or revenues, or profitability, geographic advantage, or sale force, or your employee base.

Partner 62

Partner Intellectual Property .Net Distribution 62

abovethecrowd.com

APRIL 20, 2016

All Unicorn participants — founders, company employees, venture investors and their limited partners (LPs) — are seeing their fortunes put at risk from the very nature of the Unicorn phenomenon itself. These mutual funds “mark-to-market” every day, and fund managers are compensated periodically on this performance.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Seeing Both Sides

SEPTEMBER 15, 2015

to build the satellite office and to personally oversee the recruitment and management of American executives who can lead the sales and marketing efforts. Companies should strengthen the Israeli management team with local talent who understand how to define the market, how to sell into it, and how to gather feedback.

Cofounder 20

Cofounder Technical Review United States 20

dondodge.typepad.com

JANUARY 15, 2011

Community is more powerful than money or technology » August 11, 2007 How much equity for investors and employees? How much equity should I grant to early employees? Founders usually end up with 10% to 20%, all the other employees end up with about 15%, and the VCs end up with about 60% to 75%. 5% Managers -.25%

Equity 40

Equity Employee Dilution Valuation 40

Berkonomics

AUGUST 20, 2020

You’ve informed your top management of the pending but still secret deal and they know they will be impacted and are a bit skittish. Email readers, continue here…] First, should you inform your employees of the deal? Everyone on the board is anxious to close this. You’ve committed time to do whatever is needed.

Due Diligence 71

Due Diligence Intellectual Property SEC Lean 71

Berkonomics

JANUARY 13, 2022

I often advise managers, CEOs and entrepreneurs always to part on a positive note and never burn the bridges of any past relationship. Call an early key employee and take that person to dinner as a thank you for those hard times. Remember the lessons learned, and friendships gained. Here are some thoughts for you. Write a book.

Dilution 62

Dilution .Net Sales Entrepreneur 62

www.vccafe.com

MARCH 11, 2013

Task Management. Project Management Tools. Subscription Payments / Management. Managing APIs. Customer Relationship Management. Contractor Management. Private beta invitations & management: Prefinery. Scanning / Document Management. Project Management tools. Part 4- Closing.

Software Review 53

Software Review Technical Review Startup 53

VC Cafe

NOVEMBER 9, 2011

The host was William Bowmer, a Managing Director at Barclays Capital. Going public is not easy : companies should be preparing for IPO in terms of media communication and internal management over a year ahead of IPO. Stay private only if you can grow fast enough to pay your employees and investors. Manage expectations.

IPO 92

IPO Cofounder Europe 92

The Next Web

SEPTEMBER 29, 2013

Howard Marks is a serial entrepreneur and Managing Director of LA tech accelerator StartEngine. They feel the money can and should be spent on ways to grow the company, so they shift into growth mode by hiring more employees, paying themselves, hiring salespeople, running paid ad campaigns, and spending on overhead.

Metrics 136

Metrics Cofounder Cram Down Liquidity Event 136

Berkonomics

OCTOBER 1, 2015

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. That further reduces the amount available to founders if not still in the ranks of management. So this advice is directed to the investors.

Dividend 48

Dividend Preferred Stock IRR Participating Preferred 48

Berkonomics

OCTOBER 7, 2011

For employees, a late or missed payroll is the ultimate test of corporate loyalty, divorced even from an employee’s ability to make do without a paycheck. And it is that disconnected employee, usually one or more of the better performers, that starts looking for a job when times look bad for a company.

Valuation 54

Valuation Dilution Down Round Employee 54

Duct Tape Marketing

FEBRUARY 22, 2018

So it can live on for multiple generations and continue the legacy, take care of the employees, take care of the customers, and create a liquidity event for the present ownership so they can view it as a success as well. One is an employee survey. I’ve had the privilege of leading eight companies. How do I do it?”

Leadership 41

Leadership Conversion Missouri Liquidity Event 41

www.quora.com

JANUARY 16, 2011

The code behind airline reservations, visa transactions, and warehouse management systems, really did change the world beyond all recognition. Let's assume (for the sake of the argument) that I'm a complete failure at entrepreneurship and management. Leadership and management ability. Obviously not. So it can be done.

Developer 42

Developer Technical Review Cofounder Technical Cofounder 42