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.

Equity 190

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.

Equity 166

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.

Equity 150

Enhancing the Co-founder Equity Split Conversation

Gust

Today we’re proud to release an updated Co-founder Equity Split tool. The post Enhancing the Co-founder Equity Split Conversation appeared first on The Gust Blog.

Equity 169

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.

Equity 140

Private Equity Requires Careful Consideration

Inc Startups

Is private equity all that it's made out to be? Money

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.

Equity 183

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.).

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.

Equity 100

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

Equity 183

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.

CTO 227

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.

CTO 254

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

Equity 117

Equity for Early Employees in Early Stage Startups

SoCal CTO

I was asked by a reader how much equity he should give out to early employees and to service providers in a very early stage startup. Founders are likely not paid for a long time and have a sizeable equity percentage for early risk and having the concept.

Equity, tokens and working for free

Start Up Blog

Ten years ago I used to get offered equity to work for free, now I get offered tokens in upcoming ICO’s. I used to say yes to many equity offers if: (A) I liked the project (B) I liked the people As you can imagine most of these projects never went anywhere.

Raising Money Using Convertible Equity

YFS Magazine

Lately, more founders are inquiring about convertible equity. Finance Grow convertible equity investment pitch money raising startup capital seed funding seep capitalSome wonder if it is a good replacement for convertible debt (which has become ubiquitous in seed stage startup funding).

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.

Gust Launches Comprehensive Equity Management Platform for Cap Table Management and 409A Valuations

Gust

Gust announces acquisitions of Sharewave and Preferred Return; creates the most robust and affordable equity management solution for early-stage startups. June 22, 2016 – NEW YORK, NY – Gust, the global service provider powering the entrepreneurial ecosystem, announced today the launch of a comprehensive equity management platform, Gust Equity Management. Gust News Starting Your Company 409A valuations cap table management equity management

5 Ways to Improve Your Brand Equity

Blogtrepreneur | Entrepreneur Blog

If you had to right now, how would you rate your brand equity? Brand equity refers to the inherent value that a brand presents. This loosely represents your brand equity. So how can you measure your brand equity, and why is it important to know? And perhaps most importantly, how can you improve your brand equity if it’s not optimal for your company? The Importance of Brand Equity. High brand equity is usually correlated with high brand recognition.

Vista Equity Partners Backs Austin-based YouEarnedIt

SiliconHills

YouEarnedIt, a startup focused on rewarding employees at companies, has landed an investment from Vista Equity Partners, based in Austin. The post Vista Equity Partners Backs Austin-based YouEarnedIt appeared first on SiliconHills.

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.

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.

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.

CTO 254

Are You Ready for Equity Based Crowdfunding?

Up and Running

Then, the unveiling of the Securities and Exchange Commission’s proposed equity crowdfunding rules reveals a panacea for growing your business’s coffers. Equity crowdfunding vs. donation crowdfunding. Equity crowdfunding differs from donation crowdfunding in two major ways.

CTO Equity - Negotiation After Funding

SoCal CTO

During that time one of the founders had mentioned that for the initial agreed time (3 months, equivalent dollars could be translated to 2% of equity but no agreement was reached at that time). When finally, I sat down and started talking, they basically tallied up the hours I spent and gave a choice to get equity at current $3 mil valuation or get full cash for my time or blend of both cash/equity. Likely this greatly affects cash vs. equity.

CTO 150

CTO Equity - Negotiation After Funding

SoCal CTO

During that time one of the founders had mentioned that for the initial agreed time (3 months, equivalent dollars could be translated to 2% of equity but no agreement was reached at that time). When finally, I sat down and started talking, they basically tallied up the hours I spent and gave a choice to get equity at current $3 mil valuation or get full cash for my time or blend of both cash/equity. Likely this greatly affects cash vs. equity.

CTO 150

How much stake (equity) is an idea worth?

Gust

Invested Interests entrepreneur equity equity distribution idea startupIt depends on the quality of the idea. I’m a firm believer in Derek Sivers ‘ calculus, which goes like this: AWFUL IDEA = -$1. WEAK IDEA = $1. SO-SO IDEA = $5. GOOD IDEA = $10. GREAT IDEA = $15. BRILLIANT IDEA = $20. The real value, of course (as other answers here have noted), comes from executing on the idea.

Equity 105

Dancing the Political Brand Equity Tango on Social Media

crowdSPRING Blog

Marketing and branding brand equity branding brands Donald Trump Hillary Clinton politics presidential campaign Social media social media marketingbThis year’s American presidential race has been one of the most contentious in modern history.

Equity Based Crowdfunding Starts Nationwide Today

SiliconHills

That means companies, ranging from restaurants and bars to video game makers and software companies, can now raise funds through equity crowdfunding portals from mom […] The post Equity Based Crowdfunding Starts Nationwide Today appeared first on SiliconHills.

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.

Don’t Expect An Equity Investor For Your Non-Profit

Startup Professionals Musings

What options do they have available to them, since they can’t sell a share of the company (no equity investment)? There is no discussion of equity, or return on investment. equity funding investor non-profit philanthropist

Equity 119

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!

How to Scale a Venture Capital (or Private Equity) Fund

David Teten

For ideas on scaling, see PEHub: How to Scale a Venture Capital (or Private Equity) Fund. The post How to Scale a Venture Capital (or Private Equity) Fund appeared first on David Teten. Contributed Articles Fund Management Private Equity Venture CapitalVC fund managers typically want to grow their businesses aggressively, just like the founders we back.

3 Ways to Raise Money Without Giving Up Equity

Inc Startups

Here are 3 ways to raise money without giving up a dime in equity. Startup

What is the ratio of equity received for sweat equity vs. cash investment in a new venture?

Gust

There is no specific ratio between “sweat equity” and cash in a venture, and that’s actually not a good way to think about the issue. You might have created that value by slaving 18 hours a day, seven days a week for five years (in which case the value of the sweat equity is $8.70 Invested Interests Angels cash equity effort ownership startup sweat equity VCs

Limited Partner Due Diligence on Venture Capital and Private Equity Funds

David Teten

The biggest risk for many VC and private equity funds is team risk. – Specifically if you’re in the process of joining a fund: How to Negotiate a Partner Role at a Venture Capital or Private Equity Firm. DUE DILIGENCE ON PRIVATE EQUITY FUNDS.

Superfund Equities Report - 12/01/2104

Chaganomics

Superfund Equities Report SIGN UP AT WWW.TINYLETTER.COM/SUPERFUND Greetings December! CH Chad Hagan CEO, Hagan Capital EIC, Superfund Equities Today in Atlanta it was unseasonably warm. I like weather benchmarks, and today we blew one out. That will change with night fall. Come on strong winter! What is up with commodities? Are traders in Zurich shutting shop? Perhaps switching to Saudi only oil and for that fact, eastern demand for precious metals?

11/29/2014 - Superfund Equities Report

Chaganomics

11/29/2014 - Superfund Equities Report - www.tinyletter.com/superfund The fund sold F (Ford) and piled up on TASR (Taser), SWHC (Smith & Wesson), ZNGA (Zynga) and ABR (Arbor REIT) Citi Group''s Index unit is for sale - LINK OPEC''s meeting in Vienna this week shook the oil markets. CH Chad Hagan CEO, Hagan Capital EIC, Superfund Equities www.tinyletter.com/superfund

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.

Texas 63