Both Sides of the Table

SEPTEMBER 6, 2010

Options are gravy - I lived through the first dot com era where we used stock options as a recruiting tool. We give out stock options. Do the harder work and convince them to join anyways – without the stock option bravado. ** Unless you really are Mark Pincus, Mark Zuckerberg, Ev Williams or similar.

Stock Options 294

Stock Options Stock Valuation Liquidation Preference 294

Startup Professionals Musings

FEBRUARY 9, 2020

A sales fanatic on the founder team helps to contain that risk. The combination of technical insight, founder authority, and sales experience is a hard-to-beat advantage in a competitive market. The rest can come from early hires (with stock options to assure commitment), equity investors, or even strategic partners.

Technical Cofounder 308

Technical Cofounder Cofounder Advisory Board Stock Options 308

Startup Professionals Musings

JULY 26, 2020

Most startup founders voluntarily exit or are pushed out, and the fun is gone. If you want to give stock options, or have already been giving them, the employees will love the liquidity of their options, and the thought of selling shares for a profit. Analysts want escalating profits.

Cost 319

Cost IPO Exit Strategy Initial Public Offering 319

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

I read commentary or Twitter or blogs and realize that there are also strongly held convictions that there are these evil VCs who do terrible things to mostly altruistic founders. But unlike the popular press reporting of this conflict — 80% of the time it is founder-to-founder conflict and not investor-to-founder conflict.

Cofounder 217

Cofounder Stock Options Equity Technical Review 217

View from Seed

APRIL 27, 2020

Founders do not have this luxury. Most founders are going through hell right now, and that is not going away any time soon. Others are just starting out, but the financial safety net they thought they had from a spouse’s job or highly appreciated stock options has disappeared. Wait and see. This is scary.

Cofounder 194

Cofounder Software Review Portfolio Technical Review 194

SoCal CTO

NOVEMBER 14, 2012

I was just asked about a particular startup situation (seed stage, CMO hire, non-founder) and particularly what compensation and equity is appropriate. Quick & Dirty How-To: Employee Stock Option Allocations Seed Stage Compensation What are typical compensation numbers?

CTO Hire 329

CTO Hire Equity Seed Stage Option Pool 329

Steve Blank

MARCH 16, 2016

To most founders a startup is not a job, but a calling. Risk capital takes equity (stock ownership) in your company instead of debt (loans) in exchange for cash. What does this mean for startup founders? Here’s the thing most founders miss. Why don’t VCs tell founders this fact? ——-. The Good News.

Liquidity Event 120

Liquidity Event Founder Liquidation Preference Venture Capital 120

Berkonomics

APRIL 4, 2024

Start-ups with one founder rarely have or need a board of directors. These events, one or all, usually are triggers for the founders to seek to create a board for oversight and guidance. In fact, such a board would seem out of place in a one-person company. Ownership is spread among several classes of investors.

Covenant 48

Covenant Software Review Stock Options Vesting 48

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

JULY 9, 2014

Founders stock, and stock options, will be worth nothing for the first several years, if not forever. Typically you can browse them by region or technology to find founders. Every startup has a unique culture, driven by the founders, so talk to as many people in the organization as you can.

Technical Review 250

Technical Review Stock Options Due Diligence Silicon Valley 250

Steve Blank

OCTOBER 23, 2023

If you find an A-player CIA officer jumping into a founder role mid-way in their career (or decide to start something yourself,) they’ll probably go on to do great things. 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).

Government 212

Government Advisory Board Salary Sales Cycle 212

thinkspace.com

SEPTEMBER 7, 2012

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 for Founders. Should founders have anti-dilution rights?

Equity 62

Equity Employee Founder CTO Hire 62

Both Sides of the Table

AUGUST 17, 2009

These periods of time can leave a founder very vulnerable in the future. Assuming normal valuations at fund raising rounds you’ll be down to 6-12% after you’ve created a stock-option pool and raised capital. But these people seldom make retirement money from the stock options on these companies.

Founder Vesting 365

Founder Vesting Intellectual Property Stock Options IP 365

Both Sides of the Table

FEBRUARY 27, 2019

If polled a week before the board meeting a good number of founders would say, “I wish we could delay this meeting a couple of weeks” or “I really could do without having this board meeting at all.” The law firm has done its job of preparing the stock option requests, board meeting minutes, 409a valuations. it’s your own fault.

Stock Options 226

Stock Options Metrics Stock Valuation 226

Startup Professionals Musings

OCTOBER 18, 2015

Founders stock, and stock options, will be worth nothing for the first several years, if not forever. Typically you can browse them by region or technology to find founders. Every startup has a unique culture, driven by the founders, so talk to as many people in the organization as you can.

Technical Review 120

Technical Review Entrepreneur Stock Options Due Diligence 120

Startup Professionals Musings

FEBRUARY 18, 2018

A sales fanatic on the founder team helps to contain that risk. The combination of technical insight, founder authority, and sales experience is a hard-to-beat advantage in a competitive market. The rest can come from early hires (with stock options to assure commitment), equity investors, or even strategic partners.

Technical Cofounder 144

Technical Cofounder Cofounder Advisory Board Startup 144

Startup Professionals Musings

JUNE 11, 2014

A sales fanatic on the founder team helps to contain that risk. The combination of technical insight, founder authority, and sales experience is a hard-to-beat advantage in a competitive market. The rest can come from early hires (with stock options to assure commitment), equity investors, or even strategic partners.

Technical Cofounder 245

Technical Cofounder Cofounder Advisory Board Startup 245

Startup Professionals Musings

APRIL 10, 2016

Every startup founder loves to prompt for questions from investors and potential key team members about their vision, and the huge opportunity that can be had with their disruptive technology. Most founders like to talk about their many months or years of sweat-equity , but cash invested is a stronger commitment.

Sweat Equity 120

Sweat Equity Burn Rate Technical Review Intellectual Property 120

The Next Web

JUNE 15, 2012

Any decision to hand out stock or stock options should be made within the big picture context of your company’s valuation and the total number of shares you’ll be granting. Many young tech startups reserve 15%-20% for employee stock options. Imagine if you grant stock options to a handful of consultants.

Equity 116

Equity Stock Options Vesting Stock 116

Startup Professionals Musings

DECEMBER 10, 2022

Another example is Facebook , maintaining motivation with food, stock options, collaborative office space, an on-site laundry, and a competitive atmosphere that fosters personal growth and learning with great benefits. As a startup founder or executive, you need to subvert your own troubles for the sake of the team.

Stock Options 362

Stock Options Salary Leadership Stock 362

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

A Smart Bear: Startups and Marketing for Geeks

SEPTEMBER 29, 2015

” He explains: Either the founders failed to achieve their goal, or – far likelier – they failed to dream big enough. It’s classic founder naïveté to think that “youthful energy” would have been maintained had the company remained independent. Companies are constantly changing.

Acquisition 120

Acquisition Technical Review Stock Options Employee 120

Startup Professionals Musings

APRIL 8, 2015

Every startup founder loves to prompt for questions from investors and potential key team members about their vision, and the huge opportunity that can be had with their disruptive technology. Most founders like to talk about their many months or years of sweat-equity , but cash invested is a stronger commitment.

Technical Review 120

Technical Review Due Diligence Sweat Equity Burn Rate 120

Startup Professionals Musings

JULY 19, 2013

Most entrepreneurs struggle with many startup Founders dilemmas in building their business, and these key dilemmas are probably the biggest source of pain and failure for the entrepreneur lifestyle. Should you start a company solo or find co-Founders to help you? The co-Founder relationship dilemma.

Founder 245

Founder Hockey Stick Cofounder Liquidity Event 245

YoungUpstarts

FEBRUARY 1, 2020

by Bryce Welker, founder of Crush The CPA Exam. That can affect your first-time audit in two main ways: with stock option expensing and 409A Valuations. Stock Option Expensing. . When you want to issue financials that are GAAP compliant, you need to expense your stock options. 409A Valuations.

CPA 165

CPA Stock Options Valuation Stock 165

Business Plan Blog

SEPTEMBER 18, 2012

Reserve 10-20% Of Your Company’s Outstanding Equity For A Stock Option Plan. It is critical for a start-up to consider this reality and reserve 10-20% of its outstanding equity for a stock option plan. 2: Issue Options According To Value Added And Risk Taken. Whatever the percentage, it pays to plan ahead.

Stock Options 61

Stock Options Stock Option Pool Dilution 61

Berkonomics

NOVEMBER 23, 2023

Equity is divided between the founders and the business begun. Although this insight does not address this point of ignition, we should note in passing that things always change over time, and formerly strong founder-contributors can become a drag upon a business or lose interest if the enterprise is not quickly successful.

Equity 62

Equity Stock Options Vesting Early Stage 62

Both Sides of the Table

MAY 27, 2013

But the thing I am most proud of about Rob is that he has taken a company with a uniquely talented founder & CTO – Nick Halstead – and managed to build a very tight working relationship with Nick where we drive world-class product development without having the usual founder / CEO conflicts. More information comes out.

Advisory Board 365

Advisory Board CTO Hire Fractional CTO Los Angeles 365

Up and Running

DECEMBER 1, 2015

If however you are giving a “normal employee” an incentive stock option plan (more on that later), that’s entirely different. Make sure you understand all of your options before making any decisions. When business owners decide to go down the route of equity compensation, there are two primary options to choose between.

Equity 60

Equity Employee Stock Options Vesting 60

Feld Thoughts

SEPTEMBER 2, 2011

The founders each have common shares that will vest over four years. The vesting schedule protects each of the co-founders in case one gets hit by a bus or decides to drop the project after a short period of time. They come up with two options: Hire Praveena as an employee and offer her stock options.

Cap Table 133

Cap Table CTO Hire Technical Cofounder Cofounder 133

Startup Professionals Musings

SEPTEMBER 13, 2015

A sales fanatic on the founder team helps to contain that risk. The combination of technical insight, founder authority, and sales experience is a hard-to-beat advantage in a competitive market. The rest can come from early hires (with stock options to assure commitment), equity investors, or even strategic partners.

Technical Cofounder 120

Technical Cofounder Cofounder Advisory Board Stock Options 120

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.

Employee 62

Employee Stock Options Stock Equity 62

Berkonomics

NOVEMBER 1, 2018

Formal option plans for some. Some companies, especially those financed by angel or VC investors, have good, formal stock option plans with properly priced options set to reward all employees and managers in the event of a corporate sale.

Stock Options 192

Stock Options Stock Distribution Programming 192

Both Sides of the Table

JULY 29, 2010

Mark Jeffrey - Q: “Is it more traditional to do your ESOP (employee stock option plan) before or after your angel or Series A funding?&# I talked about the need to have a restricted stock plan for your earliest employees. Angels have a much lower threshold for returns than do VCs. This is minutes 8-11. Do it early.

Venture Capital 282

Venture Capital Term Sheet Valuation Stock Options 282

Startup Professionals Musings

FEBRUARY 7, 2020

There is no better way to feel the pressures and unknowns, as well as the excitement, of a startup than to work in one as an employee, and realize that the highs and lows are even greater for the founder. Founders stock and stock options are worth nothing for the first few years.

Silicon Valley 315

Silicon Valley Entrepreneur Stock Options Flash 315

Up and Running

SEPTEMBER 20, 2021

And as the company grows, it brings on new people and may decide to issue stock options to attract new staff and funding from investors. Founders can apply the information to instantly ascertain what percentage of the startup they have to propose a new investor. Outline your plans for future employee stock option pools.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112