Feld Thoughts

JULY 29, 2011

Finance Friday’s gets off the ground with today’s post by introducing you to an imaginary startup, the entrepreneurs that we’ll being following throughout the series, and their first challenges: splitting up the founders’ equity and addressing the case where one of the founders provides the initial seed capital for the business.

Equity 137

Equity Finance Pre-Money Valuation Denver 137

David Teten

JULY 10, 2019

pre-launch, BIG equity, big peeps involved–ANY TIPS?? Would you like to have a salary from day one that you work full-time on your startup? We agree on an equity split, vesting, and initial compensation structure. And how do you split the equity? Do you want to make America functional again ?

America 60

America Technical Review Advisory Board Due Diligence 60

www.instigatorblog.com

OCTOBER 23, 2010

Changing Equity Structures for Early Startup Employees Tweet Recently someone asked me for advice on how much equity they should give to their early employees. 1% but they’re not going to be overwhelmed by it, or insanely incentivized by that equity alone. I do believe that early employees should trade salary for equity.

Equity 41

Equity Employee Startup Vesting 41

www.payne.org

SEPTEMBER 22, 2011

Startup Equity For Employees. 4 Vesting. 7 Salary vs Equity. The re-heating of the venture funded tech market has pushed a heat up of the hiring market, and Im getting more calls from friends asking for help understanding startup stock (equity) offers. From Payne.org Wiki. 2 Stock Classes: Common and Preferred.

Equity 56

Equity Employee Vesting Preferred Stock 56

Hunter Walker

AUGUST 24, 2014

The vast majority of my future savings was (a) not vested yet and (b) tied to hope for future stock grants I’d earn. It’s for reasons like these that I support getting startup founders some liquidity during their company’s first few years, perhaps as early as Series A financing when appropriate.

Founder 108

Founder San Francisco Liquidity Event LP 108

Austin Startup

AUGUST 20, 2017

They’re looking to be paid properly in the context of the overall salary structure, including cash, benefits, and equity, and to be paid commensurate with performance. Set any vesting schedules and expiration dates on roughly similar terms, if for no other reason just so you can track all of them correctly.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

The Next Web

OCTOBER 7, 2013

Quite frankly, waiting provides more assurance around employment risk without the commensurate sacrifice in equity comp. It is typical for employees to vest their options over four years with a one year cliff, which means a new hire must stay on the company for at least one year to see any shares.

Engineer 129

Engineer Dilution Option Pool Vesting 129

Business Plan Blog

OCTOBER 9, 2012

Employee Ownership: Offering an Employee Stock Ownership Plan (ESOP) is a means of raising finances and saving money on payroll by offering shares of company stock to employees. An ESOP allows business owners to offer equity in the company in exchange for, most often, a reduced salary.

Vesting 51

Vesting Government Stock Salary 51

OnlyOnce

MAY 5, 2022

But that post raised questions for me like “Why do you spend money on things like that when all people care about is their salary? For cash compensation, start with base salary and any cash incentive comp plans. All of that adds up to a much larger total than base salary. How many options are vested? It happens.

Salary 62

Salary Equity Vesting Employee 62

www.quora.com

SEPTEMBER 22, 2011

Type to Add and Search Questions; Search Topics and People Startups Startup Compensation Entrepreneurship Compensation Stock Options Major Internet Companies Silicon Valley Why is there such a large founder to early employee equity drop-off? This ties into this Paul Graham article: [link] /equity. Login if you already have an account.

Equity 40

Equity Employee Founder Cofounder 40

Startup Company Lawyer

FEBRUARY 21, 2010

For example, if a company has raised $20M in venture financings by issuing non-participating preferred stock , the holders of common stock will not receive any proceeds from an M&A transaction unless the transaction value exceeds $20M. 50% of base salary if still employed 6 months later). Last Man Standing.

Retention 31

Retention Liquidation Preference Employee Common Stock 31

www.chubbybrain.com

SEPTEMBER 28, 2011

created a vastly higher cost structure; I had 80 people mostly on base salaries under $100,000 and was bringing in revenue at the rate of $20 million annually. The ArsDigita of Greylock, General Atlantic, and Allen had nearly 200 with lots of new executive positions at $200,000 or over, programmers at base salaries of $125,000, etc.

Software Review 79

Software Review Startup Technical Review Vesting 79

www.paulgraham.com

OCTOBER 23, 2010

The sixth largest center for oil, or finance, or publishing?Whatever It happens so oftenthat weve reversed our attitude to vesting. We still dont requireit, but now we advise founders to vest so there will be an orderlyway for people to quit. In townslike Houston and Chicago and Detroit its too small to measure.

Startup 108

Startup Software Review Hiring Detroit 108

maplebutter.com

JANUARY 8, 2013

If you believe in it – then finance whatever you can yourself. Ideally you can pay them based + equity so that you’ll get their attention and focus on the project. There’s no formula however I do know … the more you build before you need to hire / partner, the more equity you can keep. Offer equity to a programmer?

Technical Review 44

Technical Review Startup Cofounder Software Review 44

Both Sides of the Table

FEBRUARY 14, 2016

” “Mark has a vested interest in talking down valuations of startups.” In the case of startups the “buyer” is the VC looking to part cash for “purchasing” equity in your startup. Why Financing in Falling Markets is So Damn Difficult. ” “Sure, prices are dropping.

Valuation 150

Valuation Down Round Startup Later Stage 150