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Should You Share Equity with Consultants?

www.inc.com

Finance | Tuesdays. Financing a Small Business. Financing A Small Business. Personal Finance. Should You Share Equity with Consultants? To grow his cash-strapped start-up, Parker ended up sharing equity -- not only with employees, but also with consultants and vendors. Start-up | Mondays. How to Incorporate.

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How to Evaluate an Offer from a Startup Incubator

The Startup Lawyer

If an incubator offers your startup $25,000 in exchange for 6% equity, the pre-money valuation is a whopping $391,667. Rather than assign a monetary value to the intangibles, a startup should instead assign an equity percentage value to intangibles like mentorship. Other incubators may want to set up an option pool.

Incubator 105
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ProfessorVC: Touched by an Angel

Professor VC

He then went on to say that this type of financing was good for the entrepreneur (vs taking VC money) because they got to keep more of the company. There needs to be enough equity to go around for founders, early investors, later investors, and employees. I also teach Entrepreneurial Finance at San Jose State. Help, please.

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Cap Table Explained — What is it and How to Maintain it for Investors

Up and Running

The use of a cap table for a company comes into play when it has to track the total amount of shares, the value of shares, and the equity ownership of all the shareholders. The data of the company, such as debt and the company’s equity ownership, is laid out with the help of a cap table. Convertible notes. Example of a cap table.

Cap Table 112
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How to pick a co-founder

venturehacks.com

Two founders works because unanimity is possible, there are no founder politics, interests can easily align, and founder stakes are high post-financing. As a corporate lawyer for 15+ years, I just wanted to echo your sound advice that co-founders should impose reasonable vesting restrictions on the equity issued them. Date first.

Cofounder 101
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Everything you ever wanted to know about advisors: Part 2.

venturehacks.com

Most of their companies would probably give 6% of their shares to YC for free, just to participate in the program. If your company hasn’t raised a Series A, increase the advisor’s equity by roughly 30%-50% to account for dilution from seed investors, Series A investors, option pools, swimming pools, and the like.