article thumbnail

Introducing the Cap Table and Hiring the CTO

Feld Thoughts

As Finance Fridays continues, we are introducing the concept of the Cap Table. This week they set out to create their cap table and hire a CTO. As first time entrepreneurs they did not create an employee options pool; we’ll fix that in a little while. The founders each have common shares that will vest over four years.

Cap Table 133
article thumbnail

Option Pools and VC Negotiations

Rob Go

In my last post about raising seed vs. jumping straight to A, I received a good comment from Chris Woods that my analysis neglected to include the impact of option pools that are created at each financing round. Essentially, the new investor wants there to be a certain % of options available to employees after they invest.

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

Equity for Early Employees in Early Stage Startups

SoCal CTO

For your first key hires, three, five, maybe as much as ten, you will probably not be able to use any kind of formula. For example, suppose you're just two founders and you want to hire an additional hacker who's so good you feel he'll increase the average outcome of the whole company by 20%. n = (1.2 - 1)/1.2 =.167. and we have 11.1%

article thumbnail

Founders Should Set Aside More Equity for Their Team & “Split the Pain” With Investors

Hunter Walker

But employee option pool is important enough that I wanted to briefly expand upon my comment above. While you should expect these sorts of hires to take below market cash comp versus what Google is paying them, this tradeoff needs to be replaced with equity upside.

Equity 94
article thumbnail

What is it Like to Negotiate a VC Round?

Both Sides of the Table

I am reminded of this problem every time my firm does a financing where a note went before us but more specifically I was reminded by this great post by Brad Feld to talk about the pre-money vs. post-money conversion issue. So how DOES a VC think about financings at early stages? How much is in the option pool?

article thumbnail

When The VC Asks: About Your Hiring Plan

Hunter Walker

Whether it’s adding capacity to an existing function (#MawrEngineers) or bringing new talents onboard (“we intend to make our first marketing hire”), glossing over these bullet points towards the back of the pitch deck would be a mistake. I’m interested in not just what these people will be doing but how and when they’ll be hired.

Hiring 108
article thumbnail

Should You Share Equity with Consultants?

www.inc.com

Finance | Tuesdays. Financing a Small Business. Financing A Small Business. Personal Finance. Back in 1997, Randy Parker was staring at a blank whiteboard, wondering where hed find the money to hire the employees and consultants he needed to build his new product. "We Start-up | Mondays. Technology | Thursdays.