David Teten

MARCH 14, 2018

I’ve listed a few more below which require meaningful startup and ongoing costs. Andreessen Horowitz’s compromise: they have a half-dozen “ board partners ” who serve on the boards of their portfolio companies, representing A16Z, but who are not full-time employees of A16Z. For more, see the Startup Studio Playbook.

Private Equity 60

Private Equity Venture Capital Equity Cofounder 60

Startup Professionals Musings

MARCH 11, 2013

If you aren’t so sure, need something fast, or need to keep your costs low, then an LLC is the best legal and taxable entity to facilitate your startup. Incorporate your startup after the business plan, but before you spend a dollar on product development. Every startup business needs annual tax return coverage.

LLC 234

LLC Nevada Delaware Limited Liability Company 234

Agile VC

APRIL 17, 2011

AGILEVC My idle thoughts on tech startups. 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). How to Evaluate Firms for a Seed VC. How To Think About The Future.

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

www.payne.org

SEPTEMBER 22, 2011

Startup Equity For Employees. 2 Stock Classes: Common and Preferred. 5 Stock vs Options. 6 Founders / Restricted Stock. Important disclaimer: Ive got experience negotiating stock compensation packages from both sides of the table. Your offer will almost surely be for common stock. 3 Dilution.

Equity 56

Equity Employee Vesting Preferred Stock 56

Gust

JUNE 7, 2014

So, here is the typical payout order, from first to last: 1) Salaries owed to employees. 5) Senior Preferred Stock and warrants. 6) Any preference multiple on (5). 7) Junior Preferred Stock and warrants. 8) Any preference multiple on (7). 2) Secured creditors. 3) Un-secured trade creditors.

Warrant 157

Warrant Preferred Stock Early Stage Common Stock 157

Both Sides of the Table

MARCH 21, 2010

This is part of my ongoing series on Startup Advice. As startup entrepreneurs we all want to work with them because having their name as reference clients makes it so much easier for marketing, PR, selling to other customers, fund raising and even recruiting. Think of it as similar to an employee stock option.

Warrant 298

Warrant Dilution Startup Stock Options 298

View from Seed

DECEMBER 4, 2014

Editor’s note: Understanding how to divide founder equity at a startup can be tricky, even to the point of reaching emotional riffs between founders. Across both the startups I’ve personally been involved in (PayPal and LinkedIn) and the startups in which I’ve been an investor, I’ve seen a broad range of co-founder equity splits.

Equity 315

Equity Founder Sweat Equity Cofounder 315

Startup Professionals Musings

AUGUST 1, 2016

Experienced entrepreneurs understand investor expectations of Board representation, preferred stock, and payments based on interim milestones. Being first to market is not a strong competitive argument for startups, since larger existing players can easily overrun this position. Ask only for the money you can justify.

Due Diligence 120

Due Diligence Intellectual Property Preferred Stock Seed Stage 120

Agile VC

DECEMBER 4, 2014

Across both the startups I’ve personally been involved in (PayPal and LinkedIn) and the startups in which I’ve been an investor, I’ve seen a broad range of co-founder equity splits. As a result, one of the trickier things co-founders tackle is determining the equity split amongst the founding group of individuals.

Cofounder 255

Cofounder Equity Founder Sweat Equity 255

Steve Blank

OCTOBER 24, 2017

. — Unremarked and unheralded, the balance of power between startup CEOs and their investors has radically changed: IPOs/M&A without a profit (or at times revenue) have become the norm. The startup process has become demystified – information is everywhere. Not every startup ended up this way. Board Control.

Founder 245

Founder Technical Review CTO Hire IPO 245

Startup Company Lawyer

MARCH 12, 2009

C corps, LLCs, and S corps differ significantly in the areas of taxation, ownership, fundraising, governance and structure, and employee compensation. Almost all technology startup companies that I work with are C corps. Any company that raises venture financing will need to be a C corp in order to issue preferred stock.

LLC 61

LLC Stock Options Preferred Stock Stock 61

www.mattbartus.com

SEPTEMBER 24, 2011

Perspectives on issues affecting founders, startups and investors from a veteran startup lawyer in Silicon Valley. People tend to underestimate how much record keeping is involved with managing employees and consultants, and this just adds an unacceptable extra burden. I have moved my startup practice to Cooley from Dorsey.

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

ithacaVC

JUNE 29, 2018

Our portfolio companies routinely adopt carve out plans when the founders/employees equity values are not likely to provide enough incentive to get a company to an exit. This typically results when the company has raised a lot of money and the preferred stock liquidation preference would absorb an out sized portion of the exit proceeds.

Management 40

Management Liquidation Preference Preferred Stock Dilution 40

Tim Keane

JANUARY 12, 2010

Startups and angels: Along the way to success. Term-sheets for preferred stock offerings are designed to protect the investor in case things don’t go as well as planned. These include: ·       Vesting of Founder Stock.   Posted at 04:19 PM in Funding startups | Permalink.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Agile VC

DECEMBER 4, 2014

Across both the startups I’ve personally been involved in (PayPal and LinkedIn) and the startups in which I’ve been an investor, I’ve seen a broad range of co-founder equity splits. As a result, one of the trickier things co-founders tackle is determining the equity split amongst the founding group of individuals.

Cofounder 173

Cofounder Equity Founder Sweat Equity 173

Both Sides of the Table

APRIL 6, 2020

If your US-based business is adversely affected by Covid-19 such that you would need to lay off employees imminently and having access to capital would enable you to keep more employees on the payroll then you might be eligible. Am I eligible for the PPP Loan? One thing that is clear. shouldn’t I? The short answer is “no.”

Programming 279

Programming Affiliate SBA Government 279

Gust

JULY 18, 2012

Yet I’ve rarely seen entrepreneurs more fired up than when recounting war stories of startups whose founders had control of the company wrested from them, were forced to take financing or compensation deals on outrageously onerous terms , or worst of all, fired from their own companies.

Stock Options 188

Stock Options SEC Stock Government 188

K9 Ventures

NOVEMBER 21, 2011

Let’s say you’re the founder (I use a solo-founder in my example to keep things simple, but this could just as well apply to a founding team) of a startup called Blood, Sweat and Tears, Inc. They want to keep the founders “all-in” in the startup, because they feel that otherwise the founders won’t be motivated enough.

Founder 87

Founder Common Stock Preferred Stock Stock 87

K9 Ventures

NOVEMBER 21, 2011

Let’s say you’re the founder (I use a solo-founder in my example to keep things simple, but this could just as well apply to a founding team) of a startup called Blood, Sweat and Tears, Inc. They want to keep the founders “all-in” in the startup, because they feel that otherwise the founders won’t be motivated enough.

Founder 84

Founder Common Stock Preferred Stock Stock 84

K9 Ventures

MAY 14, 2011

The companies go through a 3-6 month long startup bootcamp and then typically try to raise angel/seed funding. Most angels invest for a couple of reasons – some do it because they genuinely love the startup space and this is their way of continuing to be involved in a startup, sometimes vicariously. Common Stock.

Preferred Stock 125

Preferred Stock Seed Stage Incubator Early Stage 125

ithacaVC

JUNE 20, 2011

Cost is the overriding issue for startups when it comes to properly engaging a lawyer. And each award to a given employee requires a separate grant agreement laying out the terms of the grant. and (v) how to properly fire employees. My general retort on this point is this: expect to incur real lawyer costs and get over it.

Stock Options 58

Stock Options Vesting Subscription Agreement Founder Vesting 58

Growthink Blog

APRIL 7, 2010

The name "Series A" refers to the class of preferred stock that you sell to investors in return for their cash. Your Series A round is typically the first series of stock issued after common stock (which is typically issued and/or sold to company founders, employees, friends and family, and initial angel investors).

Angel Investor 54

Angel Investor Preferred Stock Venture Capital Common Stock 54

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

Ben's Blog

JULY 16, 2013

If you run a startup and are currently raising money, you probably planned for a somewhat different fundraising environment than the one you find yourself in today. First, if you did not understand how radically the fundraising environment might change, then there is no chance that your employees would have understood it. Outkast, Ms.

Down Round 78

Down Round Marketing Preferred Stock Post-Money Valuation 78

Startup Company Lawyer

JULY 20, 2009

Founders of startup companies often wait to incorporate a company until they are confident that their concept is viable or fundable. Incorporating a company and issuing stock to the founders will help prevent misunderstandings among the founders about equity splits. Hiring employees or third party contractors. If a non-U.S.

IP 67

IP Stock Options Preferred Stock Capital Gains 67

Ben's Blog

JULY 16, 2013

If you run a startup and are currently raising money, you probably planned for a somewhat different fundraising environment than the one you find yourself in today. First, if you did not understand how radically the fundraising environment might change, then there is no chance that your employees would have understood it. Outkast, Ms.

Marketing 46

Marketing Preferred Stock Post-Money Valuation Down Round 46

www.paulgraham.com

APRIL 28, 2010

Want to start a startup? A typical startup goes throughseveral rounds of funding, and at each round you want to take justenough money to reach the speed where you can shift into the nextgear. Few startups get it quite right. 1 ] A startups life will be more complicated, legally, if any of theinvestors arent accredited.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

ReadWriteStart

JANUARY 28, 2022

With the rise of startups and growing businesses , it has become more critical for investors to have a thorough understanding of equity to be aware of all of the advantages they are receiving from the companies they have invested in. Why do startups issue company equity? You have a financial stake in a startup if you have equity.

Valuation 108

Valuation Equity Warrant Common Stock 108

ithacaVC

FEBRUARY 23, 2011

As the investors’ aggregate liquidation preference (ALP) increases typically the need for a MCOP also increases. The ALP is the total amount of $ that preferred stock holders are owed on a sale of the company under their liquidation preferences. A few key points to consider: 1.

Liquidation Preference 55

Liquidation Preference Management Preferred Stock Dividend 55

Growthink Blog

MAY 10, 2012

Nevertheless, this is when you get the startup money to kickstart your business with the bare essentials needed to begin making and fulfilling your first sales. The name is derived from the class of preferred stock investors receive in return for their capital.

Equity 88

Equity Mezzanine Later Stage Venture Capital 88

Up and Running

SEPTEMBER 20, 2021

Since almost all startups do not possess traditional debt lenders, the list usually consists of data of the shareholders and the percentage they own. Furthermore, there are various forms of equity, such as preferred stock, common stock, and convertible notes, which influence the present and potential future investors.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

Gust

MAY 24, 2012

As a quick review, most startups begin life as corporations with a single class of equity securities, referred to as Common Stock , issued to founders, employees, and outside service providers. Options and warrants, when issued, are also typically exercisable for shares of Common Stock.

IPO 159

IPO Equity Common Stock Stock 159

www.mattbartus.com

DECEMBER 9, 2012

Perspectives on issues affecting founders, startups and investors from a veteran startup lawyer in Silicon Valley. an option to purchase shares in the future at a pre-determined price) to the investor to purchase preferred stock at the Series A price. Home About Matt Client references Contact. A View from the Valley.

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40

Hunter Walker

SEPTEMBER 29, 2022

As more growth and crossover investors came into the startup ecosystem they were often eager to put capital to work and happy to consolidate their positions with common or preferred shares from early employees, founders and previous investors. We’re aligned with the founders and the rest of the cap table until we aren’t.

Venture Capital 122

Venture Capital Cap Table LP Equity 122

Up and Running

MAY 23, 2016

To give you a better idea of what entrepreneurs in this industry are thinking about during each phase of the startup process, I interviewed SaaS entrepreneurs from all over the world, including our own COO Noah Parsons. Eric Ries, a Silicon Valley entrepreneur and author of The Lean Startup, popularized this strategy for web applications.

Software Review 74

Software Review Software Delaware Forecast 74

Board Effect

MAY 10, 2019

In the early days, tracking the percentage of ownership in a startup is easy. There’s the owner—maybe a partner or two—but unless employees are offered equity from the get-go, there’s typically not a whole lot of dilution. Things can escalate quickly, however, when a startup decides to seek investors. Why do cap tables matter?

Cap Table 40

Cap Table Liquidation Preference Dilution Liquidity Event 40

Scott Edward Walker

NOVEMBER 26, 2017

Despite all the hype in the press (including with respect to the latest ICO craze), raising funds for your startup is still tough – particularly if you’re not located in San Francisco or Silicon Valley. The hard part, of course, is getting in front of “A” investors to pitch your startup. Tip #1: Get Warm Referrals to “A” Investors.

Term Sheet 63

Term Sheet San Francisco Founder Investment Bankers 63