Steve Blank

OCTOBER 23, 2023

Advisory Board members are often paid in a balance of equity (stock options) and cash (“cash” is the industry term for money wired to your bank account). If they won’t discuss any aspects of runway or value of the equity package they’re offering, look elsewhere. A Board of Directors has a formal and legal role.

Government 212

Government Advisory Board Salary Sales Cycle 212

Startup Professionals Musings

SEPTEMBER 22, 2012

Thus, stock doesn’t “pay the mortgage” today, so to speak. Unless you have a sizable nest egg, or a working spouse with an income to support you, I would recommend that you consider any stock options as a “bonus,” rather than a key part of your compensation for joining a startup. Advisory Board Member, 1% Senior Engineer,3 -.7%

Stock Options 230

Stock Options Stock Advisory Board Startup 230

Startup Professionals Musings

SEPTEMBER 25, 2019

Thus, options don’t “pay the mortgage” today, so to speak. Unless you have a sizable nest egg, or a working spouse with an income to support you, I would recommend that you consider any stock options as a “potential bonus,” rather than a key part of your compensation for joining a startup. 7% Product Manager,2 -.3%

Equity 237

Equity Stock Options Advisory Board Stock 237

Startup Professionals Musings

JULY 1, 2022

Thus, options don’t “pay the mortgage” today, so to speak. Unless you have a sizable nest egg, or a working spouse with an income to support you, I would recommend that you consider any stock options as a “potential bonus,” rather than a key part of your compensation for joining a startup. 7% Product Manager,2 -.3%

Stock Options 343

Stock Options Advisory Board Stock Startup 343

Startup Professionals Musings

MARCH 29, 2015

Thus, options don’t “pay the mortgage” today, so to speak. Unless you have a sizable nest egg, or a working spouse with an income to support you, I would recommend that you consider any stock options as a “potential bonus,” rather than a key part of your compensation for joining a startup. 7% Product Manager,2 -.3%

Stock Options 120

Stock Options Stock Advisory Board Startup 120

Both Sides of the Table

AUGUST 14, 2017

Boards are not appointed to be founder-friendly lapdogs for the 1–3 founders who start companies and usually own the largest equity positions in the company. Executives run the day-to-day so often the board is more involved as a sparring partner at key intervals. The administrative work we actually do at board meetings?

Cofounder 217

Cofounder Stock Options Equity Technical Review 217

Startup Professionals Musings

FEBRUARY 18, 2018

Being the leader doesn’t mean more equity, nor does it mean the leader will necessarily be CEO. The rest can come from early hires (with stock options to assure commitment), equity investors, or even strategic partners. It just means that the cofounders trust one of their own and are willing to follow.

Technical Cofounder 144

Technical Cofounder Cofounder Advisory Board Startup 144

Startup Professionals Musings

JUNE 11, 2014

Being the leader doesn’t mean more equity, nor does it mean the leader will necessarily be CEO. The rest can come from early hires (with stock options to assure commitment), equity investors, or even strategic partners. It just means that the cofounders trust one of their own and are willing to follow.

Technical Cofounder 245

Technical Cofounder Cofounder Advisory Board Startup 245

Feld Thoughts

JANUARY 17, 2013

I’ve never really understood why the majority of stock option refresh grants are stacked grants mid-way through the granting process. Assume you hire someone and grant them 10,000 options with monthly vesting of four years with a one year cliff. One thing, however, has always baffled me. Let me give an example.

Stock Options 134

Stock Options Stock Vesting Retention 134

David Teten

AUGUST 1, 2019

Negotiating Employment with a Private Equity Firm – 7 Surprises to Expect. Negotiate Your Equity And Salary With Stock Option Counsel Tips. Here’s How Startup Founders Should Offer Employee Equity. Private company stock option grants: a founder’s guide to who gets what, when. Starting Work.

Private Equity 60

Private Equity Equity Due Diligence Portfolio 60

Startup Professionals Musings

MAY 8, 2022

You have very little money, and you don’t want to give away your equity. Giving equity is realistic, but base it on contribution and role, with vesting after time and milestones. Offer low cash early, with bonuses or stock options for milestones, to people in your personal network. Later you need specialists and managers.

Founder 325

Founder Hockey Stick Cofounder Liquidity Event 325

The Startup Magazine

MAY 19, 2020

For many entrepreneurs and startups, investing in stocks is a good option for building more capital. So knowing more about stocks and trading is critical. A stock, which can also be referred to as a share or equity, is a proof of ownership of a fraction or part of a business entity.

Stock 90

Stock Securities and Exchange Commission United Kingdom Technical Review 90

www.inc.com

SEPTEMBER 24, 2011

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. Parker found that equity as compensation helped build loyalty to his company -- even among consultants. But sharing equity can have pitfalls, too.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

The Next Web

SEPTEMBER 30, 2014

Dealing almost exclusively with first time startup founders, we tackle the following question with nearly all of our CEOs: How much equity should they give to the employees? In one instance, I told a CEO that we typically recommend a 15 percent stock options pool at seed/Series A stage. She rolled her eyes in disbelief.

Equity 154

Equity Employee Option Pool Stock Options 154

Feld Thoughts

SEPTEMBER 2, 2011

Equity is split 55% and 45%, but where is that officially recorded? They come up with two options: Hire Praveena as an employee and offer her stock options. Bring Praveena in as a founder and offer 10-20% of the company as stock. Praveena wants to invest $20,000 and get 20% equity.

Cap Table 133

Cap Table CTO Hire Technical Cofounder Cofounder 133

Gust

APRIL 9, 2014

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.). Uncategorized company equity dilution founder investors startup'

Dilution 150

Dilution Equity Vesting Stock Options 150

Startup Professionals Musings

JULY 24, 2011

Thus, stock doesn’t “pay the mortgage” today, so to speak. Unless you have a sizable nest egg, or a working spouse with an income to support you, I would recommend that you consider any stock options as a “bonus,” rather than a key part of your compensation for joining a startup. Advisory Board Member, 1% Senior Engineer,3 -.7%

Equity 234

Equity Stock Options Advisory Board Stock 234

View from Seed

AUGUST 6, 2015

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. It falls on the hiring company to thoroughly explain equity options to their new employees.

Equity 120

Equity Employee Cap Table Stock Options 120

View from Seed

AUGUST 6, 2015

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. It falls on the hiring company to thoroughly explain equity options to their new employees.

Equity 120

Equity Employee Cap Table Stock Options 120

Austin Startup

JULY 15, 2019

Do you have an understanding of venture capital terminology and common structures such as convertible notes, SAFEs, stock options, warrants, and early stage equity transactions? Do you catch mistakes that other people miss? Are you more efficient and responsive by email than most other people you know?

Texas 56

Texas Technical Review Silicon Valley Venture Capital 56

Berkonomics

DECEMBER 14, 2023

But how about awarding stock options to all employees? These plans are not as popular today because of their complexity and difficulty to manage, lost in favor of simple stock option plans. How do we align them to the goals and strategies of the enterprise? Show everyone financials? Yes, sometimes the news is not good.

Employee 62

Employee Stock Options Stock Equity 62

Business Plan Blog

SEPTEMBER 18, 2012

Reserve 10-20% Of Your Company’s Outstanding Equity For A Stock Option Plan. Equity incentives are a major form of compensation for most emerging growth and technology companies. It is critical for a start-up to consider this reality and reserve 10-20% of its outstanding equity for a stock option plan.

Stock Options 61

Stock Options Stock Option Pool Dilution 61

Startup Professionals Musings

SEPTEMBER 13, 2015

Being the leader doesn’t mean more equity, nor does it mean the leader will necessarily be CEO. The rest can come from early hires (with stock options to assure commitment), equity investors, or even strategic partners. It just means that the cofounders trust one of their own and are willing to follow.

Technical Cofounder 120

Technical Cofounder Cofounder Advisory Board Stock Options 120

Steve Blank

MARCH 16, 2016

Risk capital takes equity (stock ownership) in your company instead of debt (loans) in exchange for cash. Founders can now access the largest pool of risk capital that ever existed –in the form of Private Equity (Angel Investors, family offices , Venture Capitalists (VC’s) and Hedge Funds.). The Bad News.

Liquidity Event 120

Liquidity Event Founder Liquidation Preference Venture Capital 120

Up and Running

OCTOBER 19, 2021

If your team’s starting salaries leave something to be desired, consider adding equity to your compensation packages, as well. Stock options, restricted stock, or performance shares can make your offer more attractive to the right candidate. Offer unconventional but practical employee benefits.

Startup 127

Startup Salary Stock Options Employee 127

Startup Professionals Musings

APRIL 10, 2016

Most founders like to talk about their many months or years of sweat-equity , but cash invested is a stronger commitment. Calculate employee stock option values and vesting times, as well as salary. When did this effort really start, including pivots?

Burn Rate 120

Burn Rate Technical Review Sweat Equity Intellectual Property 120

chrischandler.name

NOVEMBER 1, 2010

If you’ve considered finding and asking a developer for his or her time in exchange for sweat equity, I’m going to strongly advise you against it. All the engineers I trust to execute a project swiftly, professionally and with quality, especially under startup conditions, will not touch an upfront equity deal with a 10-foot pole.

Equity 40

Equity Developer Entrepreneur Syndicate 40

Up and Running

DECEMBER 16, 2021

Some reasons why include needing a more detailed picture of your company’s value, submitting taxes, outlining employee stock option plans, or presenting to investors or creditors. For many business owners, getting a formal valuation is worth the investment. Rules of thumb in business valuation.

Valuation 86

Valuation .Net Metrics Balance Sheet 86

Startup Professionals Musings

APRIL 8, 2015

Most founders like to talk about their many months or years of sweat-equity , but cash invested is a stronger commitment. Calculate employee stock option values and vesting times, as well as salary. When did this effort really start, including pivots?

Technical Review 120

Technical Review Due Diligence Burn Rate Sweat Equity 120

The Next Web

OCTOBER 8, 2015

As a rule, entrepreneurs are very protective of their equity, and try to keep 100 percent ownership for themselves. lucrative sales commission plan, profit share plan), and sometimes that comes in the form of equity or equity linked incentives (e.g., stock, options, warrants). stock, options, warrants).

Equity 60

Equity Employee Warrant Stock Options 60

www.drowningamerican.com

JUNE 22, 2012

Next → How we Hire for Sweat Equity (Part 2)… Posted on April 7, 2011 by Travis Biziorek. I’m not FaceBook or Twitter and have a s**t-ton of potentially imminent IPO stock options to offer someone. equity in the company. Musings on Life and the American Dream. Skip to primary content. Post navigation.

Sweat Equity 40

Sweat Equity Equity Hiring Technical Review 40

Berkonomics

OCTOBER 26, 2010

Give one percent equity to each outside board member vesting over four years of service. Pay early stage board members of companies that are not lifestyle businesses one percent of the fully diluted equity in the form of an option that vests over four years of service.

Stock Options 66

Stock Options Early Stage Stock Vesting 66

Startup Professionals Musings

OCTOBER 21, 2017

Thus, options don’t “pay the mortgage” today, so to speak. Unless you have a sizable nest egg, or a working spouse with an income to support you, I would recommend that you consider any stock options as a “potential bonus,” rather than a key part of your compensation for joining a startup. 7% Product Manager,2 -.3%

Stock 140

Stock Stock Options Advisory Board Startup 140

Both Sides of the Table

JANUARY 21, 2010

You never got around to agreeing exact equity splits but you had many conversations about it. Forget to get around to setting up that Employee Stock Option Plan and want to be able to give the early guys their options at a low strike price? I write about some of the lessons in my post on Startup Mistakes.

Southern California 318

Southern California Silicon Valley IP Stock Options 318

VC Adventure

AUGUST 15, 2018

Most boards did some level of work to determine the FMV of a company’s stock but generally options were priced between 10% and 15% of a company’s then preferred price (because common equity sits behind preferred equity there is typically a discount applied to the FMV of common stock to account for this “overhang”).

Valuation 48

Valuation Common Stock Cap Table Software Review 48

Both Sides of the Table

MAY 27, 2013

And you can often throw in a separate action like approving stock-option grants, getting approval for CAPEX spend, discussing fund raising timing – whatever. You may know how much to pay in cash or equity for your new VP Engineering. Always seek input. You may have an opinion on your market-entry strategy for Europe.

Advisory Board 365

Advisory Board CTO Hire Fractional CTO Los Angeles 365

Feld Thoughts

OCTOBER 8, 2013

Even better, consider using equity compensation as the bonus. Figure out an equation for converting the bonus amount (in current cash terms) to stock option awards. Then, the CEO and the leadership get to allocate the bonus to each person on a direct performance basis at the end of the year.

Stock Options 146

Stock Options Technical Review Leadership Equity 146