article thumbnail

Should You Offer Equity Compensation to Employees?

Up and Running

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
article thumbnail

Cram Down – A Test of Character for VCs and Founders

Steve Blank

They offered desperate founders more cash but insisted on new terms, rewriting all the old stock agreements that previous investors and employees had. Some even insisted that all prior preferred stock had to be converted to common stock. Founders rationalize it’s good for their employees. You’re not.

Cram Down 404
Insiders

Sign Up for our Newsletter

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

article thumbnail

8 Entrepreneur Mistakes That Turn Off Real Investors

Startup Professionals Musings

Experienced entrepreneurs understand investor expectations of Board representation, preferred stock, and payments based on interim milestones. Due diligence also normally involves onsite visits and employee discussions, so the entire team needs to be fully aware of expectations. Ask only for the money you can justify.

article thumbnail

8 Funding Proposal Red Flags Every Startup Can Avoid

Startup Professionals Musings

Experienced entrepreneurs understand investor expectations of Board representation, preferred stock, and payments based on interim milestones. Due diligence also normally involves onsite visits and employee discussions, so the entire team needs to be fully aware of expectations. Ask only for the money you can justify.

article thumbnail

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.

article thumbnail

5 Keys To Mitigating New Venture Tax And Legal Issues

Startup Professionals Musings

Proper record keeping is especially important if you have employees and contractors, as you’ll need to manage W-2s, Form 1099s, employment agreements, attendance records, termination letters, and any settlement or ownership documents with former employees. Don’t overlook business tax filing requirements and dates.

LLC 210
article thumbnail

Cliff Notes S-1: Kayak ? AGILEVC

Agile VC

5) High Productivity: Kayak had 148 employees at the end of 2010. That means that Kayak generates roughly $1.15M in revenue for each employee which puts it in the same league as Google and Apple (both >$1M/head). One can infer valuations based on per share prices of preferred stock and oustanding common shares (~5.3M