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.

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. Andy suggests using market comps. Longtime readers will know this is a topic near and dear to my heart.

Trending Sources

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.

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.

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.

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. How to market your company as an investment.

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. In comparison, the crowdfunding market totals $.5B

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.

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.

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!

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. In perfectly competitive markets, all profit margins tend toward zero. ” In a competitve labor market, service businesses tend to have low margins and therefore low equity values.

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.

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

thinkspace.com

Marketing Intern. 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?

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.

Startup Equity Crowdfunding Grows in Europe (NESTA Report)

VC Cafe

Amongst the different types of crowdfunding: Donation, Reward, Lending and Equity, the latter is on the rise as a fundraising mechanism for European startups. investors can then, through the platform, buy small parts of this equity stake. Decision on how much equity.

Will New Equity-based Crowdfunding Regulations Cool the UK Market?

Early Growth Financial Services

New UK regulations for equity-based crowdfunding While the U.S. market waits for the Securities and Exchange Commission (SEC) to complete its rulemaking, new rules brought in by the UK’s Financial Conduct Authority (FCA) have divided the opinion of its peer-to-peer lenders and crowd-funding websites. It involves large numbers of people contributing small amounts over online platforms as equity investment or cash loans to support new business initiatives.

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Free Startup Docs: How Much Equity Should Advisors Get?

techcrunch.com

Free Startup Docs: How Much Equity Should Advisors Get? 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. Marketing Lead at drchrono (Mountain View, CA) drchrono.

Equity Compensation Offers Alternatives to Market Salaries

The Entrepreneurial Mind

Breaking Business : Chris Sloan and I chat about Equity Compensation. Tweet Facebook LinkedIn Tumblr Stumble Digg Delicious The post Equity Compensation Offers Alternatives to Market Salaries appeared first on Dr Jeff Cornwall

The slowdown in equity financing is changing venture debt too

Version One Ventures

Debt funding is an interesting option for start-ups in two scenarios: you can increase your funding base while times are good in order to maximize growth or you can use it stretch your runway when equity raises are tougher (or you don’t want to price your equity). But as the equity funding market is cooling down, we see the impact rippling over to the venture debt market as well. And, equity markets were providing cheap alternatives for raising capital.

What is Sweat Equity Worth?

www.entrepreneur.com

Money Money Home Financing Taxes Accounting Basics Personal Finance Money Management Payments & Collections IPOs and DPOs Will Crazy Market Moves Kill IPOs and Slash VC Investment? Marketing Sales & Marketing Home Marketing Basics Sales Online Marketing Finding Customers Social Media Branding Social Media Does Your Companys Social Personality Need a Makeover? Posted in Franchises 30+ days ago Which Franchise Markets Are Most Profitable?

9 Marketing Buzzwords That You Need To Know

Brandanew

This is the third part in the series of marketing buzzwords we keep sharing with you. With so many new ideas, topics and terms that the marketing community comes up with, it’s only fair to take a step back and think through the basics. 9 Marketing Buzzwords That You Need To Know.

Startup Equity For Employees

www.payne.org

Startup Equity For Employees. 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. UPDATE: If youre a founder or near-founder, your equity terms are likely defined by the funding terms negotiated with the investors. Salary vs Equity. I get asked all the time: how much equity should I expect?

10 Partner Qualities to Test Before Sharing Equity

Startup Professionals Musings

If both of you are experts at software development, even though one loves design and the other loves coding, that still won’t get the marketing done. Look at the big picture first of development, finance, and marketing/sales. entrepreneur startup co-founder partner equity business

Equity Crowdfunding: Your Solution for Small Business Financing?

Duct Tape Marketing

Equity Crowdfunding: Your Solution for Small Business Financing? written by Guest Post read more at Small Business Marketing Blog from Duct Tape Marketing Thursday is guest post day here at Duct Tape Marketing and today’s guest is Salomon Wancier – Enjoy!

What is convertible equity (or a convertible security)?

Startup Company Lawyer

Quick answer: convertible equity (or a convertible security) is convertible debt without the repayment feature at maturity or interest. ” In response, Seth Levine wrote a very thoughtful post on convertible debt versus equity. Other folks, such as Mark Suster, have also written about whether convertible debt is preferable to equity. Fred Wilson has been openly critical of convertible debt , and prefers priced equity rounds. Making it equity removes this issue.

Announcing Volition Capital’s Newest $250 Million Growth Equity Fund, Volition Capital Fund III

Thinking About Thinking

This fund will have substantially the same strategy and focus as all of our prior funds – which we call small cap technology growth equity. We invest in high growth, principally bootstrapped, technology companies that are poised for market leadership. Our small cap technology growth equity strategy is not a marketing pitch – it’s our genuine, feel-it-in-our bones, part-of-our-DNA, belief about how to best steward the capital of our investors.

Announcing Volition Capital’s Newest $250 Million Growth Equity Fund, Volition Capital Fund III

Thinking About Thinking

This fund will have substantially the same strategy and focus as all of our prior funds – which we call small cap technology growth equity. We invest in high growth, principally bootstrapped, technology companies that are poised for market leadership. Our small cap technology growth equity strategy is not a marketing pitch – it’s our genuine, feel-it-in-our bones, part-of-our-DNA, belief about how to best steward the capital of our investors.

Equity Compensation at a Startup is a Big Gamble

Startup Professionals Musings

Plus you have to remember that these 200,000 shares could still be worth nothing in four years, depending on the “strike price” today, compared to the market price four years from now. Obviously, what you get will vary depending on what you bring to the company, and what the market will bear.

Second-Class Investor Citizens: Facebook’s IPO and Dual-Class Equity Structures

Gust

Some commentators have suggested this is the wave of the future, signifying a shift in the balance of power from investors to founders of the relatively small, elite group of growth companies that make it to public markets.

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8 Secrets for Maximizing Startup Equity and Control

Startup Professionals Musings

Bootstrapping avoids all the cost, pain, and distractions of finding angels or VCs, and allows you to keep control and all your hard-earned equity for yourself. Creative marketing. startup control equity bootstrapping Rich Christiansen business

How Much Equity a Technical Cofounder Should Get - Nathan Hurst's Blog

Nathan Hurst

This covers one of the most common situations I encounter: For a pre-funding web startup whose team includes only a non-technical cofounder, how much equity should an incoming technical cofounder get? 6a] Salary upon funding -0%: No extra equity for getting a salary upon funding.

Sorry Startup Employee #100, Your Equity Probably Won’t Make You Rich

Hunter Walker

In no particular order: Startup Equity Is Unlikely to Make You Fabulously Wealthy After Four Years Unless One or More of the Following Apply… You were a founder. Even in successful companies, most initial equity grants will be worth a few hundred thousand dollars to perhaps $1-2m, when fully vested. On the employee end they should realize there’s often a tradeoff between salary and equity.

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See, Think, Do, Care Wining Combo: Content + Marketing + Measurement!

Occam's Razor

I passionately dislike how most Marketers have become selfish – because most companies set deeply selfish goals for them! Imagine how much more focused your digital marketing will be once you give that Think definition to your team/agency. Good marketing is not free.

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

Superfund Equities Report - 12/01/2104

Chaganomics

Superfund Equities Report SIGN UP AT WWW.TINYLETTER.COM/SUPERFUND Greetings December! Del Frisco''s Restaurant Group Inc (NASDAQ:DFRG) was upgraded by analysts at Raymond James from a "market perform" rating to an "outperform" rating. 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?

Is Convertible Debt Preferable to Equity?

Both Sides of the Table

I have to say that I didn’t take the question to mean that convertible debt had won for the entire market, but either way it’s clear that convertible debt has become an increasing trend. prefer equity to convertible debt): If you’re an early stage investor (e.g.

Is Dead Equity Crippling Your Company?

Altgate

—————– Dead equityequity held by employees and founders no longer working at the company — is a large and growing problem. Choe opted to forgo a cash payment “in the thousands” for the equity equivalent at the time.

DealMarket.com – Making Private Equity A Big Deal

YoungUpstarts

Online platforms that connect startups and entrepreneurs are common, but one that connects private equity professionals? But DealMarket ( www.dealmarket.com ), launched in March this year, looks set to be the way that private equity and investment types will work in the future.