Techstars Equity Back Guarantee

Feld Thoughts

Today Techstars announced an “ equity back guarantee ” for any company that goes through the Techstars program starting in 2015. So we decided to launch an equity back guarantee. The post Techstars Equity Back Guarantee appeared first on Feld Thoughts.

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Using Debt Like Growth Equity

A VC : Venture Capital and Technology

ModCloth effectively treated the debt like growth equity, rather than recognizing the time bomb it could become. When the debt first came due in April 2015, existing ModCloth investors pumped in new equity to, in part, kick repayment down the road for two years. Once the income statement returned to the red, ModCloth again tried raising equity ― but prospective investors cited the debt overhang as their reason for passing on a company whose unit economics were otherwise fundable.

Trending Sources

Employee Equity

A VC : Venture Capital and Technology

Wealthfront Equity Plan from Wealthfront. The important similarities are that Andy and I both encourage companies to not only grant equity at the start date but also on an ongoing basis so that employees' equity ownership grows as their tenure and contributions grow. Where Andy and I differ a bit is how to calculate how much equity should be granted. I prefer to issue equity based on a multiple of current cash comp divided by the current valuation of the business.

Issues with Equity Misalignment

Ask The VC

The two founders with the least equity happen to be the two tech founders. Some of us feel that we made a mistake when allocating shares in the beginning – there is one founder in particular who does not do any work, and he has the second-most equity (the split goes like this: 32%, 26%, 10%, 7.5% Then, each of you will end up with an increase of your pro-rata percentage of his equity. If you have equity alignments early in your company, deal with them.

What VC Can Learn From Private Equity

A VC : Venture Capital and Technology

I spent a week in Europe a few weeks ago with our friend Eric who is a managing partner in a private equity firm. I’ve also had the pleasure of working on a board of one of our portfolio companies with a private equity investor who is making a few minority investments. Venture Capital and Private Equity are very different investment disciplines. 2/ Private equity can’t afford to lose money on an investment.

CTO Salary and Equity Trends 2009-2011

SoCal CTO

Todd Gitlin of Safire Partners - a go to resource here in LA for recruiting C-level positions at startups - was nice enough to compile some data again this year (see last year's Startup CTO Salary and Equity Data ). You can also enter salary and equity data to see where you stand.

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How does equity dilution work for startups?

Gust

Equity dilution works when the same pie is divided among more people. Over time, other people receive pieces of equity in exchange for work (employee stock options), money (seed, angel and venture investors), services (attorneys, directors, etc.).

Should You Offer Equity Compensation to Employees?

Up and Running

Of course, not every equity compensation story is a David Choe Story. 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. In this article, I’m going to examine: What equity compensation is.

How to Divide Founder Equity: 4 Criteria to Discuss

View from Seed

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. Below, Lee Hower offers advice for approaching these equity discussions objectively and properly.

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Startup CTO Salary and Equity Data

SoCal CTO

Todd Gitlin of Safire Partners was nice enough to compile some data on Start CTO Salary and Equity at Venture Backed Companies for the LA CTO Forum and present last year. You can find a public Google Spreadsheet with the data: CTO Equity Compensation Google Spreadsheet.

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An Advisor Equity and Advisor Pool Breakdown

Eric Friedman

Bigger/better advisors who get more equity have things like; excellent domain expertise to help you avoid pitfalls, deep connections within the industry to help with the intros, partnerships, and more. As a potential advisor looking to get involved with the company; MORE EQUITY!

Founder's Dilemmas: Equity Splits

Startup Lessons Learned

Having seen these dilemmas derail countless startups, I wish every entrepreneur and prospective founder would read this book." - Eric The following is an exclusive excerpt which sets up a common pitfall regarding equity splits.

Founder's Dilemmas: Equity Splits

www.startuplessonslearned.com

Founders Dilemmas: Equity Splits. The following is an exclusive excerpt which sets up a common pitfall regarding equity splits. Setting the early equity split in stone is one of the biggest mistakes founders can make. Founders Dilemmas: Equity Splits. Lessons Learned.

Punch & Pie: How Should Co-Founders Divide Equity?

Agile VC

As a result, one of the trickier things co-founders tackle is determining the equity split amongst the founding group of individuals. Sometimes co-founders put off the equity split question for some time. Both of these are typically reflected in the founder equity split.

Texas Approves Equity-Based Crowdfunding Rules

SiliconHills

The Texas State Securities Board voted 4-0 on Wednesday to approve new intrastate equity-based crowdfunding rules. The […] The post Texas Approves Equity-Based Crowdfunding Rules appeared first on SiliconHills. Austin San Antonio Crowdfunding Rules equity-based crowdfunding Texas State Securities Board By LAURA LOREK Reporter with Silicon Hills News Texas companies will soon be able to raise money from the average investor.

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For Equity Investors, A Startup Has To End To Win

Startup Professionals Musings

Yet one of the first things a potential equity investor asks about is your exit strategy. Equity investments are not loans, so there is no loan payback period or interest payments. Find a private equity firm or friendly individual. entrepreneur equity investors IPO startup exit

CTO Equity and Compensation at Venture Backed Companies

SoCal CTO

Todd Gitlin of Safire Partners was nice enough to compile some data on CTO Equity and Compensation at Venture Backed Companies for the LA CTO Forum and present last year. You can find a public Google Spreadsheet with the data: CTO Equity Compensation Google Spreadsheet.

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Does Being The First Full-Time Paid Employee Affect That Founder’s Equity In The Company?

Ask The VC

The question is, does being the first full-time paid employee affect that founder’s equity in the company? I can see two sides to this issue. The first is the founders that are not yet paid employees would think that the other is getting paid so FTE’s equity should decrease. Assuming this is the case, I think you can comfortably separate out the equity as a separate concept. Equity compensation equity founders

A VC Puts On His Equity Crowdfunding Hat

YoungUpstarts

It’s been about three months since equity crowdfunding was opened up to all Americans. This change means that virtually any individual, not just the wealthy, will have opportunities to make equity investments in early stage companies. By Tom Walker, CEO Rev1 Ventures.

Kindred Disciplines: Growth Equity and Growth Hacking

Non-Linear Growth

Growth Equity and Growth Hacking: A Symbiotic Relationship Growth equity and growth hacking enjoy a symbiotic relationship. Although there are capital efficient ways to growth hack that don’t require growth equity, some growth hacks absolutely require capital.

Equity Crowdfunding: Is it Right for Your Business?

Early Growth Financial Services

Though still not fully phased in, the Jumpstart Our Business Startups Act (JOBS Act) which Congress passed in January 2012, kicked off a wave of business and investor interest in (and platforms to facilitate) equity crowdfunding.

Founder Liquidity and Growth Equity

Non-Linear Growth

I’m seeing more and more growth equity financings come to market with an over-sized component of the financing allocated to existing shareholder liquidity. … Read more › The post Founder Liquidity and Growth Equity appeared first on Non-Linear.

Equity value

Chris Dixon

This is a useful way to understand the meaning of “equity value” You learn in finance that equity value is the overall value of a the stock (i.e. equity) of a business, which in turn is the present value of all future profits. So equity value is a function of the degree to which you can make your market inefficient by making your business hard to copy (so called “defensibility”).

Equity basics: vesting, cliffs, acceleration, and exits

The Startup Toolkit

false As a cheatsheet, the “normal” equity structure is: Founder terms: 4 year vesting, 1 year cliff, for everyone, including you. Getting equity structures right. When it comes to equity terms, there are only 3 things to understand: vesting, cliffs, and acceleration.

Can A Hoodie Increase Brand Equity?

crowdSPRING Blog

From a brand equity perspective, the purple hoodie was a unique way to acquire 2,000 die-hard brand advocates. Startups have been using branded apparel as a way to build brand equity for years. Image credit: Twitch.

Why It's Better to Raise Debt than Equity

Inc Startups

Why It's Better to Raise Debt than Equity

Equity-Only CTO and Equity-Only Developers

SoCal CTO

Understand where they were in terms of being able to pay or was this equity-only (sweat equity only). And he was still in the process of raising additional capital, so it was equity only. However, when I told him that the level of engagement required from me and the fact that equity-only development was required, he seemed to be a bit offended. There are cases where I will do equity-only deals.

Mathematical vs. Economic Dilution of Startup Equity: Thinner Slices of an Extra-Large Pizza

Gust

Let’s get right down to business: Dilution of founders’ and other early shareholders’ equity in startups is frequently a subject of intense interest and debate. Back from a hiatus, it’s time to venture forward once more.

Growth Equity Investors are Hedgehogs; VCs are Foxes

Non-Linear Growth

Growth equity is increasingly being recognized as an investing discipline that is separate and distinct from venture capital. That being the case, how does one distinguish between a venture capitalist and a growth equity investor.

Visualization of Startup CTO Equity and Salary Data

SoCal CTO

A long-time friend and colleague, Steve Wexler, who is great at visualization took my Startup CTO Salary and Equity Data and produced a really need interactive visualization via Tableau. Of course, as you would suspect, equity percentages dilute based on years in business.

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How To Allocate Founder and Employee Equity

A VC : Venture Capital and Technology

It never makes sense to give anyone equity without vesting. The thing I love the most about Joel's post is he throws darts into a lot of conventional wisdom about founder equity allocation. I particularly like his notion that the person with the idea should not command a premium on equity allocation. Founding teams that allocate the founders equity fairly stay together a lot more than founding teams where one founder has a much better deal than the others.

Equity Crowdfunding by the Numbers

Inc Startups

A dive into the statistics and lessons from the first two years of equity crowdfunding in the USA and the future of the new Title III Equity Crowdfunding rules

Financing your business: Debt vs Equity

StartupCFO

VentureBeat wrote a post recently on debt versus equity which one is right for your business. So what I would like to do here is layout a more comprehensive framework for the pros and cons of debt versus equity and when you could look at each for financing your business. Equity.

Texas Proposes Equity-based Crowdfunding Rules

SiliconHills

Last year, Austin companies received $626 million in venture capital, or 49 percent of the venture capital dollars for Texas, said Michele Skelding, senior vice president of […] The post Texas Proposes Equity-based Crowdfunding Rules appeared first on SiliconHills. By LAURA LOREK Founder of Silicon Hills News In Austin, one of the big issues facing startups, particularly in the technology industry, is lack of access to capital.

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Marketing Sweat Equity: Getting Your Startup’s First Sales—Without Spending Money on Consultants and PR

Up and Running

After all, sweat equity can make up for a trim marketing budget, but it would be hard to make up for cuts in product development and customer service without sacrificing customer experience. Accessing capital to launch a business is brutal for entrepreneurs just starting out along the path.

Convertible Debt, Priced Equity Rounds and Deal Timing

Gust

An impromptu Twitter debate arose among Fred Wilson, Dave McClure, Mark Suster, Chris Dixon and others about convertible debt, priced equity rounds, and the nuances of early stage financing. Invested Interests angel investment convertible debt convertible note deal terms due diligence financials fundraising priced equity priced rounds tactics valuation valuations VCs venture capital

Series AA Equity Financing Documents

ycombinator.com

Series AA Equity Financing Documents Y Combinator and Wilson Sonsini Goodrich & Rosati are happy toannounce the Series AA Equity Financing Documents.

Accelerator Investments Should Be Convertible Equity

The Startup Lawyer

In other words, the more difficult the terms or onboarding process (including the investment documents), the more likely the best startups would choose a different … Continue reading → The post Accelerator Investments Should Be Convertible Equity appeared first on Startup Lawyer.

Startups Should Be Responsible for Explaining Equity to New Employees

View from Seed

When someone goes to work for an early startup, the compensation package general includes an annual salary, health insurance, and, instead of fixed-cost performance upside, a percentage of unvested options to purchase equity in the company. Uncategorized equity VC

How to think about cash vs. equity compensation

A Smart Bear: Startups and Marketing for Geeks

It’s among the most-asked questions on startup forums, and an issue we’re dealing with right now at WPEngine as we bring on new employees: How do you decide how much equity (shares) to give a new employee or partner?

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