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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. We periodically encounter founders during the selection process who question the value of Techstars. Techstars equity back guarantee

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Co-founder Equity Split: A New Framework to Objectively Divide Startup Ownership and Get Back to Building a Business

Gust

We’ve just released our free Co-founder Equity Split tool. It’ll give you a fair and objective recommendation about how to divide your startup’s ownership, so you and your co-founders will have a sensible, real starting point for this notoriously hard, crucially important conversation. Many startup founders find themselves lacking clarity and direction when it comes time to divide their. Starting Your Company co-founders equity starting a company startups

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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Issues with Equity Misalignment

Ask The VC

Q: In our startup we have 4 founders, two of whom are not full time. 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% In your case, you feel like the 32% founder doesn’t do any work.

Founder's Dilemmas: Equity Splits

Startup Lessons Learned

The following is an excerpt from HBS Professor Noam Wasserman’s new book, The Founder's Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup. On average, the founders who keep the most control over their company make the least amount of money.

How does equity dilution work for startups?

Gust

Equity dilution works when the same pie is divided among more people. The Founder of a company starts by owning all the shares representing ownership of the company. Uncategorized company equity dilution founder investors startup

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.

Founder Dilution

A VC : Venture Capital and Technology

I saw a blog post this weekend that looked at the IPO filings of 79 tech companies and calculated the ownerships of the founders and the VCs at IPO. The result of that analysis is that the average founder ownership at IPO was 17% and the average VC ownership at IPO was 56%. I’ve written a bunch on this topic and here are two posts that address this exact issue: Founder Dilution – How Much Is “Normal”? Employee Equity: Dilution.

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 vs. Early Employees To help with this discussion, let me start with a definition of "early employee."

Are You Getting Your Fair Share Of Startup Equity?

Startup Professionals Musings

I always tell entrepreneurs that two heads are better than one, so the first task in many startups is finding a co-founder or two. So the first question I usually get is what percent of the company or equity is that person worth? entrepreneur fair share startup startup equity

Finance Fridays: Getting Started – Allocating Equity and Founder’s Investment

Feld Thoughts

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 foundersequity and addressing the case where one of the founders provides the initial seed capital for the business. Jane and Dick each brings a similar level of skill and capability to the business, making it easy for them to agree to a 50/50 equity split.

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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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 Allocate Founder and Employee Equity

A VC : Venture Capital and Technology

Before factoring in dilution from investors, the founders should end up with about 50% of the company, total. It never makes sense to give anyone equity without vesting. Nobody who is not working full time counts as a founder. The thing I love the most about Joel's post is he throws darts into a lot of conventional wisdom about founder equity allocation.

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!

How to Divide Equity to Startup Founders, Advisors, and Employees

thinkspace.com

How to Divide Equity to Startup Founders, Advisors, and Employees. The part that I’d like to zero in on is when you’ve got a high growth company what are some of the best practices out there to distribute equity to the founders, advisors, and employees?

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.

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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What Founders Need to Know About Startup Equity

Early Growth Financial Services

Equity is a startup’s lifeblood. One thing to remember: your equity is precious: don’t be lavish in giving it away. There’s no single best … Continue reading → Equity / Debt / Venture Funding And, just as with any other element of building a successful business — putting the right team in place, setting and hitting milestones, and effectively managing cash — developing your capital strategy is an important a piece to get right.

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.

What Founders Need to Know About Equity Grants

Early Growth Financial Services

Equity plays a key role in aligning incentives, clarifying expectations, and deliverables between companies and employees. Annie Webber, Founder and CEO of LegalHero, and David Ehrenberg, Founder and CEO of EGFS, took us through the ins and out of Sharing the Pie.

Founders Circle

A VC : Venture Capital and Technology

Last week my friend Chris Albinson formed an interesting new firm called Founders Circle Capital. In a nutshell, Founders Circle provides liquidity for the founders and employees of a “breakaway growth companies” so they don’t need to sell or take the company public prematurely. It takes time for the equity value to get to a point where it makes sense for the founders and employees to take a bit of their equity value off the table.

What is an effective “pre-incorporation-agreement” between possible founders of a startup?

Gust

Then sit down with your co-founders and divvy up the equity based on the contributions you all believe each of you will make…providing for reverse vesting, a large option pool, and a clear decision-making structure. Pivotal Moments equity Founder equity founder relationships founders incorporation agreement startups

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.

Equity-Only CTO and Equity-Only Developers

SoCal CTO

I had a recent email dialog with the founder of a company looking for a CTO for their startup. And I tried to evaluate the idea and figure out: What did the founder really need here? Was it a Startup Founder Developer Gap ? And do I fit as a Part-Time CTO , Technology Advisor , CTO Founder , Acting CTO ? Understand where they were in terms of being able to pay or was this equity-only (sweat equity only). There are cases where I will do equity-only deals.

How Much Founder Stock Should You Offer Co-Founders?

Startup Professionals Musings

Two heads are better than one, so the first task in many startups is finding a co-founder or two. The first question I usually get is what percent of the company or equity is that person worth? Giving a co-founder a salary won’t get you the “fire in the belly” you want.

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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.

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. Most non-founders have less than 2%. Most Founders have greater than 5%.

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Rethinking Founder Vesting

K9 Ventures

One of these norms is how founder vesting and employee vesting works. Here is a good summary post from Cooley GO on Founder Vesting. There are two main reasons for founder vesting: To ensure founders stick around and build the company. To protect the founders (and investors) when a member of the founding team separates from the company prematurely. IMHO the former — having a cliff, is better for founders than the latter — not having a cliff).

Texas Proposes Equity-based Crowdfunding Rules

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. 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.

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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.

10 Partner Qualities to Test Before Sharing Equity

Startup Professionals Musings

A while back I talked about how and where to find a co-founder in “ For a Startup, Two Heads are Always Better Than One.” In this context, I’m broadening the definition of partner from co-founder to “business partner.” entrepreneur startup co-founder partner equity business

The Perils of Founder Fighting

Both Sides of the Table

Nowhere is the politics more difficult than with co-founders, which is why for years I’ve spoken publicly about “ the co-founder mythology.” ” Of course we all go into businesses expecting to be aligned with our co-founders but over time life changes.

4 Things Every Founder Should Know About Convertible Equity

Early Growth Financial Services

Lately I‘ve been getting more and more questions about convertible equity: “What is it?” In short, convertible equity is a form of financing that gives investors the right to preferred stock once a triggering event occurs. Issuance takes the form of a short-term note that converts to equity (usually at a discount of 15-20%) at a later date, typically when a startup raises a minimum specified amount of Series A financing.

Book: The Founder’s Dilemmas

Feld Thoughts

The Founder’s Dilemmas by Noam Wasserman is another book that belongs on every entrepreneur’s bookshelf. The Founder’s Dilemmas was the first. I get asked endless questions about founder dynamics, solo founders, optimal number of founders, equity allocations between founders, roles of founders, alignment between founders, and investor – founder relationships.

Free Startup Docs: How Much Equity Should Advisors Get?

techcrunch.com

Free Startup Docs: How Much Equity Should Advisors Get? This is where a lot of founders get stuck. Entrepreneurs want to compensate their mentors and advisors for the time they dedicate to helping their businesses grow, but they have no idea how much equity to offer. Startups.

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. Most non-founders have less than 2%. Most Founders have greater than 5%.

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Convertible Equity, A Better Alternative To Convertible Debt?

techcrunch.com

Convertible Equity, A Better Alternative To Convertible Debt? As a refresher, a convertible note is a loan that automatically converts into equity upon the closing of a Series A round of financing. FOUNDER INSTITUTE. Company: Founder Institute. Startups. Mobile. Gadgets.

Startup compensation: flat salaries and equity/options work best

The Equity Kicker

We had some success with this system, most notably at Zeus Technology, which was a good exit for my old firm Draper Esprit, but these days I recommend flat salaries with upside coming from options or founder shares. With those caveats the best structures are flat salaries and a share of the equity. Hat tip to Gail McManus of PER , a recruitment firm for private equity professionals.