Up and Running

DECEMBER 1, 2015

If you’re thinking about extending equity to an employee or a vendor (as in the example above), you should know that the topic is multi-faceted. If however you are giving a “normal employee” an incentive stock option plan (more on that later), that’s entirely different. Finding great employees first.

Equity 60

Equity Employee Stock Options Vesting 60

Steve Blank

APRIL 10, 2019

VC’s have just changed the ~50-year old social contract with startup employees. For most startup employee’s startup stock options are now a bad deal. As Venture Capital emerged as an industry in the mid 1970’s, investors in venture-funded startups began to give stock options to all their employees.

Stock Options 334

Stock Options Stock Vesting Common Stock 334

www.mattbartus.com

SEPTEMBER 24, 2011

We will grant him/her X% fully diluted shares up front, and every time he/she makes an introduction, he/she will vest in 100 shares.” People tend to underestimate how much record keeping is involved with managing employees and consultants, and this just adds an unacceptable extra burden. link] Casey Allen. Categories.

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

www.payne.org

SEPTEMBER 22, 2011

Startup Equity For Employees. 2 Stock Classes: Common and Preferred. 4 Vesting. 5 Stock vs Options. 6 Founders / Restricted Stock. NOTE: If youre an attorney or tax accountant with experience helping startup employees with stock and option issues, drop me a note. From Payne.org Wiki.

Equity 56

Equity Employee Vesting Preferred Stock 56

Steve Blank

OCTOBER 24, 2017

A founder’s lack of credibility/experience in growing and managing a large company hindered a company that wanted to go public. The founders along with all the other employees would vest their stock over 4 years (earning 1/48 a month). Some founders have three-year vesting. Some have no cliff.

Founder 274

Founder Technical Review CTO Hire IPO 274

Startup Company Lawyer

FEBRUARY 21, 2010

Due to aggregate liquidation preferences that may exceed the acquisition price in an M&A deal, common stock may be rendered worthless. If you can’t figure this out yourself, you should probably build a liquidation preference spreadsheet to model how liquidation preferences work depending on M&A transaction value.

Retention 31

Retention Liquidation Preference Employee Common Stock 31

ithacaVC

JUNE 20, 2011

2. You need (or think you need) a stock option plan: granting stock options (and other forms of equity compensation to employees like restricted stock) should be done under a written equity incentive plan. And each award to a given employee requires a separate grant agreement laying out the terms of the grant.

Stock Options 58

Stock Options Vesting Subscription Agreement Founder Vesting 58