The Next Web

OCTOBER 21, 2013

As the European startup ecosystem matures, you would expect young entrepreneurs to enjoy ever-increasing access to useful advice from mentors, business leaders, experienced entrepreneurs, legal advisors and investors. In most cases entrepreneurs – especially first-time entrepreneurs – are naïve about fundraising.

Cap Table 128

Cap Table Option Pool Angel Investor Entrepreneur 128

crowdSPRING Blog

NOVEMBER 15, 2013

The 10 Best Conference Call Services for Entrepreneurs – crowdspring.co/1eIUvyQ. 10 things Entrepreneurs Can Learn From Coach – crowdspring.co/1bkxKuq. The 10 Best Conference Call Services for Entrepreneurs – crowdspring.co/1eIUvyQ. 10 things Entrepreneurs Can Learn From Coach – crowdspring.co/1bkxKuq.

Social Media 93

Social Media Small Business Design Media 93

Both Sides of the Table

AUGUST 3, 2010

There is a telltale sign of an inexperienced startup entrepreneur. I’m doing due diligence on a company of another entrepreneur in LA whose company was apparently doing very well. If they raise a bunch of capital little ole you isn’t going to be around to have your option pool topped up. I understand this.

Merger 276

Merger Technical Review Early Stage Dilution 276

Both Sides of the Table

JUNE 5, 2015

How much is in the option pool? Well, if you have an option pool of only 6% and have many more execs to hire to build out your team you’re going to ask for more options to be created in the future. Option pool (likely dilution in the future, which is a function of a higher price just not yet defined).

Pre-Money Valuation 150

Pre-Money Valuation Option Pool Post-Money Valuation Dilution 150

ReadWriteStart

SEPTEMBER 2, 2011

Therefore, going down the fundraising path is something many technology entrepreneurs will need to do and a critical step in the development of their business. Including things like liquidation preferences impact both future rounds and ultimate liquidity to why VCs ask to expand an option pool before investing as part of their term sheet.

Cap Table 125

Cap Table Term Sheet Liquidation Preference Technical Review 125

Pascal's View

JULY 9, 2017

Andrew Krowne and I recently co-wrote an article in Tech Crunch , Why SAFE Notes Are Not Safe for Entrepreneurs. At its core, this issue points to the lack of understanding about the importance of post-money valuation by both entrepreneurs and investors. Many entrepreneurs lose track of what they have been cooking up in the cap table.

Post-Money Valuation 49

Post-Money Valuation Valuation Cap Table Covenant 49

The Next Web

SEPTEMBER 30, 2014

In one instance, I told a CEO that we typically recommend a 15 percent stock options pool at seed/Series A stage. Entrepreneur Insider Analysis and Opinion tunein' She rolled her eyes in disbelief. When I try to illustrate that this. This story continues at The Next Web.

Equity 154

Equity Employee Option Pool Stock Options 154

The Next Web

JUNE 15, 2012

Any decision to hand out stock or stock options should be made within the big picture context of your company’s valuation and the total number of shares you’ll be granting. It’s wise to create a stock options pool that includes all the employees and contractors you plan on hiring in the next 18 months and how many shares each might get.

Equity 116

Equity Stock Options Vesting Stock 116

Gust

AUGUST 30, 2012

Characteristics of the Entrepreneur. Valuation, Size of Raise, Amount of Investment, Form of Investment, Liquidation Waterfall, Option Pool, Board Composition, Anti-Dilution Rights, Protective Provisions, Founder Vesting, *original post can be found on Quora @ : [link] *. Characteristics of the Venture.

Founder Vesting 144

Founder Vesting Option Pool Exit Strategy Vesting 144

View from Seed

DECEMBER 4, 2014

In addition to being a co-founder of NextView Ventures, Lee was an early member of PayPal and a founding team member at LinkedIn, so he speaks as both a former entrepreneur and a VC. Below, Lee Hower offers advice for approaching these equity discussions objectively and properly.

Equity 315

Equity Founder Sweat Equity Cofounder 315

Agile VC

APRIL 17, 2011

Precise valuations are impossible to determine because of adjustments to employee option pools, possible buybacks of common stock, etc. Im a former Silicon Valley entrepreneur turned East Coast VC. One can infer valuations based on per share prices of preferred stock and oustanding common shares (~5.3M as of 12/31/09).

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

venturehacks.com

FEBRUARY 24, 2010

Breakups are hard If you’re going to fall out with your co-founder, do it early, recover the equity into the option pool to keep the company going, and recruit someone else great to fill the missing slot. I know a lot of people who want to be an entrepreneur but many do not have what I call the “survival gene&#.

Cofounder 101

Cofounder Founder Technical Cofounder Technical Review 101

Agile VC

DECEMBER 4, 2014

You don’t really need to worry about how much common stock will be set aside for an employee option pool or how much preferred stock might be issued from raising future VC rounds in order to determine an equitable founder stock division.

Cofounder 255

Cofounder Equity Founder Sweat Equity 255

www.readwriteweb.com

DECEMBER 29, 2011

Therefore, going down the fundraising path is something many technology entrepreneurs will need to do and is a critical step in the development of their business. Too many entrepreneurs focus exclusive on the valuation number and this book can really help you understand all the implications around the term sheet you receive.

Cap Table 47

Cap Table Term Sheet Liquidation Preference Technical Review 47

Early Growth Financial Services

JUNE 26, 2014

The role of a CEO — As an entrepreneur, in addition to setting and communicating your vision and mission, one of your main roles is selling your company to investors. Option Pool — An important piece of your hiring and compensation … Continue reading → Videos'

Pre-Money Valuation 51

Pre-Money Valuation Option Pool Dilution Common Stock 51

The Equity Kicker

OCTOBER 8, 2014

We have taken their feedback and tweaked the termsheet as appropriate with the result that on all terms bar valuation, option pool and details of founder vesting our termsheet is now, in effect, very close to fully negotiated before we send it to companies. Forward Partners Venture Capital'

Founder Vesting 92

Founder Vesting Vesting Option Pool Institutional Investors 92

David Teten

DECEMBER 3, 2019

Small investment firms often have interns and entrepreneurs in residence passing through, each of which is a security risk. Chris Dixon, Partner, A16Z, observes , “Success in VC is probably 10% about picking, and 90% about sourcing the right deals and having entrepreneurs choose your firm as a partner”. 2) Market .

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Business Plan Blog

NOVEMBER 20, 2013

When it comes to the division of equity in startup, there is a similar process every entrepreneur must follow beginning with raising the first round of startup funding and, if you’re lucky, finishing at the point of IPO. Raising Funding From Family and Friends: Division of Equity.

Equity 61

Equity Option Pool Cofounder Vesting 61

Agile VC

DECEMBER 4, 2014

You don’t really need to worry about how much common stock will be set aside for an employee option pool or how much preferred stock might be issued from raising future VC rounds in order to determine an equitable founder stock division.

Cofounder 173

Cofounder Equity Founder Sweat Equity 173

The Equity Kicker

APRIL 10, 2015

Investors and entrepreneurs alike want to present the progress in the best light by showing the biggest multiple they can and they often default to comparing the post-money valuation of the new round with the post-money valuation of the last round. Venice Project'

Valuation 60

Valuation Pre-Money Valuation Post-Money Valuation Option Pool 60

www.inc.com

SEPTEMBER 24, 2011

Entrepreneur news from reporter Eric Markowitz. These days, start-up entrepreneurs like Parker do sometimes use equity not only to motivate key employees but also to help pay for consulting and other services. Create an options pool, if nothing more than in your mind, so you have some parameters to work within," Durkin says.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

Both Sides of the Table

NOVEMBER 4, 2009

I often have career discussions with entrepreneurs – both young and more mature – whether they should join company “X&# or not. When we next spoke he had found out that the CEO had about 5% and there was no management option pool in place. Tags: Entrepreneur Advice Startup Advice.

Stock Options 418

Stock Options Stock Liquidation Preference Option Pool 418

The Equity Kicker

OCTOBER 8, 2014

We have taken their feedback and tweaked the termsheet as appropriate with the result that on all terms bar valuation, option pool and details of founder vesting our termsheet is now, in effect, very close to fully negotiated before we send it to companies. Forward Partners Venture Capital'

Founder Vesting 68

Founder Vesting Vesting Option Pool Institutional Investors 68

Tim Keane

JANUARY 12, 2010

Please see later version of this post on May 16, 2010 Entrepreneurs are often not experts in the area of term-sheet negotiations and all of the surrounding issues.   Investors sometimes “present” the terms they’d like and expect the entrepreneurs to react. Term-sheets and Valuations: Thinking about Negotiations.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Seeing Both Sides

JULY 15, 2009

Thus, the universe of financings that even the most experienced entrepreneurs get directly exposed to is typically 5-10 financings over a 15-20 year career. Year in, year out, Thus, VCs and entrepreneurs are not operating on an equal playing field when it comes to negotiating financings and interpreting the impact of the terms involved.

Pre-Money Valuation 49

Pre-Money Valuation Option Pool Stock Options Post-Money Valuation 49

Professor VC

JANUARY 17, 2008

I think the title of this post is a TV show, but fitting as there has been much debate in the venture community as to the whether angel investors are good or bad for entrepreneurs and VCs. One group charges entrepreneurs "an administrative fee" to present to the group. Touched by an Angel.

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

Hunter Walker

MAY 7, 2014

“Growing the team” is almost always one of the ways entrepreneurs utilize new investment dollars. The entrepreneurs had some ties into the broader startup community so weren’t completely on an island but hadn’t sourced or vetted any candidates. Building a senior team but pushing back on having a healthy employee option pool?

Hiring 108

Hiring Option Pool Early Stage Term Sheet 108

techcrunch.com

FEBRUARY 25, 2010

You could make the same argument about acquisitions and option pools. Now consider what would happen if the same company raises another $10 million, expands the employee option pool to hire more executives and to support 300 people. VCs want their pound of flesh, and entrepreneurs do too.

Liquidation Preference 63

Liquidation Preference Founder Option Pool Acquisition 63

Scott Edward Walker

AUGUST 31, 2011

Introduction This post was originally part of the “ Ask the Attorney ” series which I am writing for VentureBeat (one of my favorite websites for entrepreneurs). We’re first time entrepreneurs, and we don’t know if this is standard practice and what we should do. Any advice would be appreciated.

Silicon Valley 45

Silicon Valley Term Sheet Liquidation Preference Redemption 45

Business Plan Blog

DECEMBER 26, 2013

The entrepreneur will need to be ready and able to respond to due diligence information requests. A capitalization table showing the post-investment ownership structure of the business to include founders, option pool and investors in the current round. Professional fees and costs. Exclusivity period and timescales. -

Angel Investor 51

Angel Investor Due Diligence Pre-Money Valuation Angel Groups 51

thinkspace.com

SEPTEMBER 7, 2012

Percent of the outstanding option pool: meaningless. Strike price of options: meaningless. Are there other tools that you’ve used that you think would be helpful to share with other entrepreneurs and founders? Your equity in relation to other employees: meaningless. link] Peter Chee. link] Joseph. Great Job Peter!

Equity 62

Equity Employee Founder CTO Hire 62

Rob Go

AUGUST 29, 2016

Founders also had to do a little math on the new option pool to really understand what their ownership would be post investment, since it was typically taken out of the company pre-money. Most term sheets talked about the valuation in these terms, and you added the dollars invested to get a post-money valuation.

Post-Money Valuation 52

Post-Money Valuation Valuation Cap Table Term Sheet 52

venturehacks.com

MARCH 21, 2008

Normal advisors are also assembled by naive entrepreneurs who think the mere presence of an advisory board will create social proof and help them raise money. Many advisors want options they can exercise immediately —that’s fine. For example, they introduce the company to a key customer or investor.

Advisory Board 44

Advisory Board Cap Table Vesting Equity 44

The Next Web

AUGUST 14, 2013

You’ll hear terminology getting bandied about left and right about things like convertible notes, capped vs. uncapped, stock option pools, board observer rights, maturity dates, priced equity. Entrepreneur How-To''s' This is certainly most confusing part about raising money – at least it was for me. Image Credit / Shutterstock.

Founder 142

Founder Incubator Cofounder Accredited Investor 142

www.mattbartus.com

DECEMBER 9, 2012

You have a 20% option pool, so you know this will take your ownership down from 80% to 60%, and the VC will get 25%. Option Pool. Option Pool. My question is, can you elaborate on the benefits you see for the entrepreneur in trying to sell this to the investors? Take a look at the numbers: Pre-Money.

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40

Both Sides of the Table

AUGUST 17, 2009

I often talk with entrepreneurs who are kicking around their next idea. When I hear entrepreneurs say that they’re kicking around ideas with friends I ask, “have you legally registered a company?&# But these people seldom make retirement money from the stock options on these companies. Register a company.

Founder Vesting 365

Founder Vesting Intellectual Property Stock Options IP 365

venturehacks.com

DECEMBER 9, 2012

Some entrepreneurs set up quarterly advisory board meetings and that probably works well for them. But we find savvy entrepreneurs tend to be transactional—they ping their advisors as needed and skip the advisory board meetings. Including advice from successful entrepreneurs. The Option Pool Shuffle. Part 2: Deck.

Advisory Board 50

Advisory Board Cap Table RSS Cofounder 50