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What is Sweat Equity Worth?

www.entrepreneur.com

What is Sweat Equity Worth? Determining how to value sweat equity is key when negotiating with investors and employees. Entrepreneurs often ask me how to value the sweat equity invested in their startup. But over the years, I have come to realize that sweat equity isn't the same thing as market value for your startup. As the business owner, you should be the expert on valuing sweat equity, not your investors, accountants or lawyers.

Piercing the Corporate Veil of Sweat Equity

grasshopperherder.com

Piercing the Corporate Veil – Sweat Equity Consulting. « Thanks but No Thanks – Things to Avoid When Recruiting Co-founders Why is Cyber Squatter a Bad Word? If you did, why would you be consulting for sweat equity instead of investing as a VC or for yourself?

What is the ratio of equity received for sweat equity vs. cash investment in a new venture?

Gust

There is no specific ratio between “sweat equity” and cash in a venture, and that’s actually not a good way to think about the issue. A better way to think about this is to separate two aspects of the “sweat” that one puts into a new venture. The first is the entrepreneurial value of the founder(s) in a new venture. Invested Interests Angels cash equity effort ownership startup sweat equity VCs

How to Divide Founder Equity: 4 Criteria to Discuss

View from Seed

Editor’s note: Understanding how to divide founder equity at a startup can be tricky, even to the point of reaching emotional riffs between founders. Below, Lee Hower offers advice for approaching these equity discussions objectively and properly.

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Punch & Pie: How Should Co-Founders Divide Equity?

Agile VC

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.

How to Hire for Sweat Equity…

www.drowningamerican.com

Next → How to Hire for Sweat Equity…. That being said the following is available to the right candidate: • 3-5% equity in the company (based on experience). • $50,000/year salary once we obtain funding (target: January, 2010). And now I’m trying to get my own team, and have them work for equity. Pingback: How we Hire for Sweat Equity (Part 2)… « Drowning American. Drowning American. Musings on Life and the American Dream. Search.

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Building a sweat equity team

discuss.joelonsoftware.com

Part 1: Recruiting Part 2: Team Members Part 3: Environment Part 4: Schedules Part 5: Lifecycle Part 6: Design Moderators: Eric Sink SourceGear Bob Walsh Founder, StartupToDo.com Author of The Web Startup Success Guide and Micro-ISV: From Vision To Reality Patrick McKenzie Bingo Card Creator Andy Brice Successful Software Building a sweat equity team This post ends with this question: What are some good sources of information (books, forums, etc.)

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 vs. Early Employees To help with this discussion, let me start with a definition of "early employee."

Milestones That Friends, Family, and Founders Care About Before Investing

Business Plan Blog

Milestones That Friends, Family, and Founders Care About Before Investing. Investors at any stage like to see that you have committed personal funds in addition to sweat equity.

7 Startup Co-Founders That Can Lead to Conflict

Startup Professionals Musings

Investors routinely decline to fund co-founders who are siblings, or in a romantic relationship. “We I’ll put in the money, if you put in the sweat equity.” entrepreneur startup co-founders conflict business

7 Startup Co-Founders To Avoid And Keep Your Sanity

Startup Professionals Musings

In a moment of crisis, you may be tempted to take on the first person expressing interest as a co-founder. Investors routinely decline to fund co-founders who are siblings, or in a romantic relationship. “We I’ll put in the money, if you put in the sweat equity.”

How we Hire for Sweat Equity (Part 2)…

www.drowningamerican.com

Next → How we Hire for Sweat Equity (Part 2)… Posted on April 7, 2011 by Travis Biziorek. Any reasonable founder salary I pay myself (I’m ball-parking $70k… maybe a bit less) will already be a higher salary than I’ve ever earned in my life. equity in the company. Drowning American. Musings on Life and the American Dream. Search. Main menu. Skip to primary content. Skip to secondary content. Post navigation. ← Previous.

Founder Agreements – Vesting, Vesting and more Vesting

High Contrast

Some time ago Sim Simeonov asked me to write a guest post on the subject of founder agreements. In part this is because I broke my leg skiing and in part it is because the number of founders walking through our doors these days seems to be on the rise.

Finding The Perfect Startup Co-Founder

ReadWriteStart

To find out more about how co-founders can help startups succeed,and how founders can find the right partners, I talked with Kaviani and Julie Edge, Ph.D., who is the founder of Inside Edge Solutions, on the faculty of Washington University in St. Adam and Eve. Sonny and Cher.

Finding The Perfect Startup Co-Founder

ReadWriteStart

To find out more about how co-founders can help startups succeed,and how founders can find the right partners, I talked with Kaviani and Julie Edge, Ph.D., who is the founder of Inside Edge Solutions, on the faculty of Washington University in St. Adam and Eve. Sonny and Cher.

5 Leadership Elements That Are Not Always About You

Startup Professionals Musings

You know how to bootstrap a business, build it from nothing, and burn sweat-equity for long hours to push your dreams to reality. business entrepreneur founder leadership startup

Equity-Only CTO and Equity-Only Developers

SoCal CTO

I had a recent email dialog with the founder of a company looking for a CTO for their startup. And I tried to evaluate the idea and figure out: What did the founder really need here? Was it a Startup Founder Developer Gap ? And do I fit as a Part-Time CTO , Technology Advisor , CTO Founder , Acting CTO ? Understand where they were in terms of being able to pay or was this equity-only (sweat equity only).

Things to Avoid When Recruiting Co-founders

grasshopperherder.com

If you’re waiting for a technical co-founder to put up a landing page with signup form, you’re lazy. Show Metrics If you ask me to be a co-founder or even just a consultant, you’re essentially asking me to invest in your company with my time.

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10 Answers That Make Your Startup Plan Investable

Startup Professionals Musings

How big is the funding request, and how much equity will you give? Quantify founder investments, both cash and sweat-equity.

8 Key Questions to Break Thru Entrepreneur Hype

Startup Professionals Musings

If you really want to impress a startup founder as a potential employee, or you want to be a smart investor, you need to know the right questions to ask. How well do the founders get along with each other, and with the team? entrepreneur startup due diligence founder questions busines

8 Key Questions To Expect In Investor Due Diligence

Gust

If you really want to impress a startup founder as a potential employee, or you want to be a smart investor, you need to know the right questions to ask. How well do the founders get along with each other, and with the team? Image via LeadChangeGroup.com.

Most Entrepreneurs Should Never Bring On Investors

Startup Professionals Musings

Yet, according to many sources , over 90 percent of all businesses are started and grown with no equity financing, and many others would have been better off without it. In fact, most of the rich entrepreneurs you know actively turned away early equity proposals.

The Smartest Entrepreneurs Bootstrap Their Startup

Gust

Yet, according to many sources , over 90 percent of all businesses are started and grown with no equity financing, and many others would have been better off without it. In fact, most of the rich entrepreneurs you know actively turned away early equity proposals.

Mathematical vs. Economic Dilution of Startup Equity: Thinner Slices of an Extra-Large Pizza

Gust

Let’s get right down to business: Dilution of founders’ and other early shareholders’ equity in startups is frequently a subject of intense interest and debate. Back from a hiatus, it’s time to venture forward once more.

7 Attributes of An Entrepreneur's Startup Dream Team

Startup Professionals Musings

Thus the top priority of every entrepreneur who wants funding should be to build and highlight their “dream team” of co-founders, executives and advisers, to attract the biggest and best investors.

8 Questions Before You Join Or Invest In A Startup

Startup Professionals Musings

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. History gaps and founder turnover may indicate a long road ahead.

How Well Versed Are You In Startup Investor Jargon?

Startup Professionals Musings

Ron Conway , of SV Angels, and Reid Hoffman , LinkedIn's founder, are names often mentioned in this category. Sweat equity. Startup founders typically invest some real dollars into their new startup as well as months or years of their time with no salary.

Paying freelancers to build your prototype is a trap

The Startup Toolkit

Version 1 is funded through sweat, not cash. You need to find someone willing to put in sweat equity, or to at least join as a full-on part of the team with a bit of a salary and a bit of an equity stake. Founders Product

4 Steps to Go From Founder to CEO

Inc Startups

There are big differences between leading a company as a founder and leading a company as a CEO. Every founder/owner reaches a point in the development of their business when they begin to feel stretched by the demands of their growing and increasingly complex organization.

8 Key Questions To Expect In Investor Due Diligence

Startup Professionals Musings

If you really want to impress a startup founder as a potential employee, or you want to be a smart investor, you need to know the right questions to ask. How well do the founders get along with each other, and with the team?

Building the right founding team

The Equity Kicker

– Don’t compromise on quality for co-founders and other permanent decisions. And that includes the choice of co-founder. Yet founders want to move fast and there is an inevitable tension between speed and quality.

Validate The Pedigree Of A Startup Before You Jump

Startup Professionals Musings

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. History gaps and founder turnover may indicate a long road ahead.

Ten Quotes That Indicate Your Arrogance is Showing

Startup Professionals Musings

It’s always painful when a startup fails, but as a mentor to founders, I would hope that you can learn from these failings and not stumble on the same issues. Investors expect the founder and other principals to have “skin in the game,” over and above “sweat equity.”

A Conversation with David Franklin, Co-Founder and Managing Director of Houston Health Ventures

Startup Houston

We sat down with co-founder David Franklin to find out about the big plans for HHV’s future. So, from day one of business school, we created a group called DCF Ventures and started working with various professors to try and commercialize their technology, using only our sweat equity.

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The Smartest Entrepreneurs Bootstrap Their Startup

Startup Professionals Musings

Yet, according to many sources , over 90 percent of all businesses are started and grown with no equity financing, and many others would have been better off without it. In fact, most of the rich entrepreneurs you know actively turned away early equity proposals.

10 Entrepreneur Comments That Kill Investor Deals

Startup Professionals Musings

It’s always painful when a startup fails, but as a mentor to founders, I would hope that you can learn from these failings and not stumble on the same issues. Investors expect the founder and other principals to have “skin in the game,” over and above “sweat equity.”

8 Questions Investors Use to Bypass Startup Hype

Startup Professionals Musings

If you really want to impress a startup founder as a potential employee, or you want to be a smart investor, you need to know the right questions to ask. How well do the founders get along with each other, and with the team?

Ten Common Arrogance Traps for Startups to Avoid

Startup Professionals Musings

It’s always painful when a startup fails, but as a mentor to founders I would hope that you can learn from these failings and not stumble on the same issues: “Business plans are for dummies.” Lack of confidence in your self, your product, and your startup is a surefire recipe for disaster.

How many business partners should you have? Maybe zero

Up and Running

In the startup world, you hear the title “co-founder” a lot more than “founder.” In hindsight, I look back and all of the ones which were successful had one common trait — they each had only one founder: me. Or as they put it, “you can stay, you just can’t keep your equity.”

Start-up Funding: Where to Start

Inc Startups

To get more insight, I recently spoke with some funding experts: Malcolm Cowley, founder of buy.at and Performance Horizon Group ; Matt Winnick, managing partner of Endgame Partners ; and Slava Rubin, founder and CEO of Indiegogo. What's the best source of capital for your company?