Agile VC

DECEMBER 4, 2014

I like to say that “there are only co-founders” — it’s extraordinarily rare for a successful business to have just a sole founder. But not all co-founders are equal in terms of title, ownership, responsibilities, and so forth. Sometimes co-founders put off the equity split question for some time.

Cofounder 255

Cofounder Equity Founder Sweat Equity 255

Eric Friedman

DECEMBER 27, 2021

Maybe the founders are the micro VCs we have been waiting for? Funds and people are looking to take a set multiple on SaaS companies and provide liquidity to founders and VCs and run the underlying companies for profit with their own infrastructure. This sort of happened. 6/ I don’t get the vaccine for COVID19 (but want too!).

Balance Sheet 97

Balance Sheet Stock Private Equity Option Pool 97

Agile VC

DECEMBER 4, 2014

I like to say that “there are only co-founders” — it’s extraordinarily rare for a successful business to have just a sole founder. But not all co-founders are equal in terms of title, ownership, responsibilities, and so forth. Sometimes co-founders put off the equity split question for some time.

Cofounder 173

Cofounder Equity Founder Sweat Equity 173

Hunter Walker

AUGUST 7, 2017

But employee option pool is important enough that I wanted to briefly expand upon my comment above. Since Homebrew typically leads/co-leads seed rounds, we assist in helping founders design and manage their pool against their hiring forecast. As you can see, Weekend VC Twitter gets pretty wild and crazy!!!!

Equity 94

Equity Pre-Money Valuation Option Pool Founder 94

Gust

NOVEMBER 8, 2012

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. original post can be found on Quora @ : [link] *.

Founder 134

Founder Option Pool Vesting Cofounder 134

Both Sides of the Table

AUGUST 3, 2010

years ago and told me, “I just got offered the chance to buy this company because the founder doesn’t want to continue. During the weekend Alan Patricoff , the famed investor & founder of Greycroft said, “don’t trade your cat for somebody else’s dog&# when talking about merging early stage companies.

Merger 276

Merger Technical Review Early Stage Dilution 276

Both Sides of the Table

JUNE 5, 2015

How much is in the option pool? Well, if you have an option pool of only 6% and have many more execs to hire to build out your team you’re going to ask for more options to be created in the future. If you’re a solo founder and haven’t built out your team or engineers I’m likely to want 15+%.

Pre-Money Valuation 150

Pre-Money Valuation Option Pool Post-Money Valuation Dilution 150

Pascal's View

JULY 9, 2017

Unfortunately, what the CEO/founder forgets most often is that the notes have a multiplier effect in the post-money calculation; the more notes and the further the cap is from the new priced equity, the greater the variance between actual and nominal pre- and post-money valuations.

Post-Money Valuation 49

Post-Money Valuation Valuation Cap Table Covenant 49

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

Agile VC

APRIL 17, 2011

Kayak was started here in my backyard of Boston… co-founder & CTO Paul English and the product/engineering team is based here in Concord MA. Co-founder & CEO Steve Hafner and the business team are based in Norwalk, CT. Led by General Catalyst with participation by co-founders Steve Hafner & Paul English.

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

The Next Web

OCTOBER 21, 2013

Neil Rimer is a Partner and co-founder of Index Ventures. Yet, surprisingly, we continue to come across founders who have made significant mistakes in their early capital raises that we suspect go against their own instincts and jeopardize the foundations of the businesses they are building.

Cap Table 128

Cap Table Option Pool Angel Investor Entrepreneur 128

This is going to be BIG.

AUGUST 21, 2023

Before we get into a debate about how much a founder should own, there’s a context implicit in the question that is easily overlooked. Now that we’ve established that, let’s talk about founder blind spots. That doesn’t make you a bad founder. And as for the founder incentive thing, I have two comments. Did you spot it?

Cap Table 78

Cap Table Term Sheet Database Option Pool 78

Gust

AUGUST 30, 2012

Valuation, Size of Raise, Amount of Investment, Form of Investment, Liquidation Waterfall, Option Pool, Board Composition, Anti-Dilution Rights, Protective Provisions, Founder Vesting, *original post can be found on Quora @ : [link] *.

Founder Vesting 144

Founder Vesting Option Pool Exit Strategy Vesting 144

techcrunch.com

FEBRUARY 25, 2010

You could make the same argument about acquisitions and option pools. This is probably why investors’ case for a company to sell early f ocuses exclusively on the founder : in most early-stage acquisitions, the liquidation preferences and deal-sweeteners only work for investors and founders.

Liquidation Preference 63

Liquidation Preference Founder Option Pool Acquisition 63

Austin Startup

JANUARY 25, 2020

Other founders say having a baby beats it, but we’ll have to wait and see about that. Going through this, I realized this is a huge pain point, and I hope someone (another founder) comes up with a better product to help startup founders with this?—?legal Those could help out a lot of founders.

Delaware 62

Delaware SEC New York City New York 62

Hippoland

APRIL 10, 2016

Dear elizy : I started a company in school with two co-founders. But, Ada wants to split the equity 50% her, 20% Bob and 20% me with a 10% option pool. Although there are no set numbers, your professor should be considered as an active advisor or a co-founder who has left rather than a full-time co-founder.

Cofounder 48

Cofounder Cap Table Equity Vesting 48

Eric Friedman

DECEMBER 30, 2020

This is a fun area for me as there are founders and companies I am supporting in the space, and its great to see how they have grown during the “crypto winter” of the last few years. 4/ Streaming equity – venture funds + employee stock becomes more liquid. 7/ SaaS roll-ups and micro-private equity become huge.

Stock 120

Stock Private Equity Option Pool LP 120

The Equity Kicker

OCTOBER 8, 2014

In our case we set out to be founder friendly and wrote a termsheet that has the minimal set of investor protections that we can get away with as an institutional investor – we need some protections because we have a duty of care to the people who invest in our fund.

Founder Vesting 92

Founder Vesting Vesting Option Pool Institutional Investors 92

venturehacks.com

OCTOBER 21, 2010

SUPPORTED BY Products Archives @venturehacks Books AngelList About RSS The Option Pool Shuffle by Nivi on April 10th, 2007 “Follow the money card!&# – The Inside Man, Three-Card Shuffle Summary: Don’t let your investors determine the size of the option pool for you. Don’t lose this game. share to $1.00/share:

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68

ithacaVC

DECEMBER 13, 2013

They are typically pretty simple: (i) shares owned by founders and (ii) shares authorized for issuance in a stock option pool, some of which may be issued to employees already and some of which will be available for future issuance. times more equity than Founder X. times more equity than Founder X.

Cap Table 67

Cap Table Pre-Money Valuation Option Pool Liquidation Preference 67

Business Plan Blog

NOVEMBER 20, 2013

Stage 2: Co-Founder. You do not have the funds to pay this person, so you decided to add them on as a co-founder. In reality, your company is probably worth close to nothing and your new co-founder is taking a huge risk. You bring someone in and quickly see the added value of this person. Stage 3: Friends and Family Funding.

Equity 61

Equity Option Pool Cofounder Vesting 61

www.paulgraham.com

OCTOBER 23, 2010

Whichis good news for founders: theyll get to keep more of the company. Leads could (and did) use a fixed size round as alegitimate-seeming way of saying what all founders hate to hear:Ill invest if other people will. So ifyou want to predict what the future of venture funding will be like,just ask: how would founders like it to be?

Startup 93

Startup Valuation Non-Compete Deal Flow 93

The Equity Kicker

OCTOBER 8, 2014

In our case we set out to be founder friendly and wrote a termsheet that has the minimal set of investor protections that we can get away with as an institutional investor – we need some protections because we have a duty of care to the people who invest in our fund.

Founder Vesting 68

Founder Vesting Vesting Option Pool Institutional Investors 68

www.startupnorth.ca

OCTOBER 23, 2010

Home Events Contact Jobs StartupIndex Founders versus early employees by David Crow on September 10th, 2009 in Resources Not everyone can be a founder. We talk about the founders of startups and companies. We focus on the founders. The founders get press coverage. The founders will each take a major chunk (e.g.

Employee 41

Employee Founder Salary Equity 41

The Startup Lawyer

FEBRUARY 4, 2011

But before your startup signs up and cashes that $[XX,000] check, your startup’s co-founders should sit down and evaluate the incubator’s offer. Most incubators take common stock and sit “side-by-side&# with the founders, but some may want some (weak) preferred stock and/or dilution protection.

Incubator 105

Incubator Pre-Money Valuation Option Pool Advisory Board 105

Hunter Walker

MAY 7, 2014

I recommend to founders that if there’s a unicorn you need who isn’t on founding team, (a) start identifying those people in advance of fundraising and (b) prepare to compensate them generously via equity. Many first time founders haven’t run hiring processes before, especially outside of their functional discipline.

Hiring 108

Hiring Option Pool Early Stage Term Sheet 108

Business Plan Blog

SEPTEMBER 18, 2012

Most sophisticated investors will require a stock option pool upon investment, and a company that fails to reserve a sufficient amount of equity up-front runs the risk of being forced to establish a pool at a later date that may dilute the founders’ ownership. 2: Issue Options According To Value Added And Risk Taken.

Stock Options 61

Stock Options Stock Option Pool Dilution 61

www.inc.com

SEPTEMBER 24, 2011

If youre offering the consultant stock options, youll also want to take into consideration what the exercise price is going to be and how long the options will be outstanding. Create an options pool, if nothing more than in your mind, so you have some parameters to work within," Durkin says.

Fractional CTO 40

Fractional CTO Equity Iowa Technical Cofounder 40

The Next Web

OCTOBER 7, 2013

They were referring to non-founder engineers, most commonly the first hire for technology businesses. In exchange, the engineer is likely offered the promise that his or her option shares will one day turn into big money. is frequently granted ownership significantly less than that of the founders. Engineer #1?

Engineer 129

Engineer Dilution Option Pool Vesting 129

ithacaVC

JANUARY 24, 2013

Let’s assume the following: Common Stock outstanding: 3,400,000 shares owned by the founders. Option pool: 500,000 shares (some issued, some reserved, but that is typically irrelevant as the whole pool is normally factored into the premoney share price calculation). So, $3mm/(3,400,000+500,000) = $.7692

Valuation 53

Valuation Balance Sheet Option Pool Dilution 53

venturehacks.com

FEBRUARY 24, 2010

SUPPORTED BY Products Archives @venturehacks Books AngelList About RSS How to pick a co-founder by Naval Ravikant on November 12th, 2009 Update : Also see our 40-minute interview on this topic. Picking a co-founder is your most important decision. One founder companies can work, against the odds (hello, Mark Zuckerberg).

Cofounder 101

Cofounder Founder Technical Cofounder Technical Review 101

VC Cafe

OCTOBER 16, 2010

Instead of a 20% option pool, we created a 40% option pool, and gave out half of it to the first half-dozen hires who came on and were willing to work without salary for a period of time, forming the core team. How do startup founders know when to quit, stick or pivot? How do bootstrapped companies hire talent?

Option Pool 88

Option Pool Analytics LLC Startup 88

Both Sides of the Table

NOVEMBER 4, 2009

When we next spoke he had found out that the CEO had about 5% and there was no management option pool in place. Best to be a founder. I asked him how much of the company would be owned by the parent company and how much would be owned by management. He hadn’t thought to ask. My advice was … run!

Stock Options 418

Stock Options Stock Liquidation Preference Option Pool 418

ithacaVC

SEPTEMBER 4, 2011

Note how the new CTO Praveena implicitly negotiated to get her 15% founders shares after creation of the stock option pool. This is significant because Jane and Dick took all the dilution from the option pool creation. I think Brad’s post simplified a few things (a bit too much) so I will expand some here: 1.

Cap Table 49

Cap Table Finance Option Pool Warrant 49

Rob Go

AUGUST 29, 2016

Founders also had to do a little math on the new option pool to really understand what their ownership would be post investment, since it was typically taken out of the company pre-money. First, it creates a natural dis-incentive for a founder to raise more money than originally planned.

Post-Money Valuation 52

Post-Money Valuation Valuation Cap Table Term Sheet 52

Seeing Both Sides

JULY 15, 2009

Another term that impacts the price is the size of the option pool. These new hires typically receive stock options, and the issuance of those stock options dilute the other investors. These new hires typically receive stock options, and the issuance of those stock options dilute the other investors.

Pre-Money Valuation 49

Pre-Money Valuation Option Pool Stock Options Post-Money Valuation 49

Professor VC

JANUARY 17, 2008

There needs to be enough equity to go around for founders, early investors, later investors, and employees. At a $1 million, pre-money, with an investment of $500K, that would leave 67% of the company for the founders and initial option pool. For the next round, assume pre-money stays at $15M and amount raised is $6.5M

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28