www.paulgraham.com

OCTOBER 23, 2010

Want to start a startup? August 2010 Two years ago I wrote about what I called " a huge, unexploitedopportunity in startup funding :" the growing disconnect betweenVCs, whose current business model requires them to invest largeamounts, and a large class of startups that need less than theyused to. Get funded by Y Combinator.

Startup 93

Startup Valuation Non-Compete Deal Flow 93

ReadWriteStart

SEPTEMBER 2, 2011

While certainly not every business needs to raise venture financing, it is the path for many high-growth technology startups. As Steve Blank explained earlier this week on ReadWriteStart from research at The Startup Genome Project : One of the biggest surprises is that success isn't about size of team or funding.

Cap Table 125

Cap Table Term Sheet Liquidation Preference Technical Review 125

Both Sides of the Table

JUNE 5, 2015

Over the years I’ve written extensively about the downsides of convertible notes for startups such as here , here and here. How much is in the option pool? If you have 8 senior managers in place and I don’t think you’ll need as many people I might accept an option pool of 8% unallocated.

Pre-Money Valuation 150

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

Gust

NOVEMBER 8, 2012

The bottom line is that the very question you are asking is one of the trickiest things of all when it comes to startup founding. original post can be found on Quora @ : [link] *.

Founder 134

Founder Option Pool Vesting Cofounder 134

Pascal's View

JULY 9, 2017

There is nothing wrong with using a SAFE or a convertible note in a startup if you know its implications. The bottom line: Startup CEOs/Founders need to do the projected capitalization table math on an as-converted, post-money basis from Day 1, before issuing any notes and modeling various possible future scenarios. Sound simple?

Post-Money Valuation 49

Post-Money Valuation Valuation Cap Table Covenant 49

The Next Web

OCTOBER 21, 2013

As the European startup ecosystem matures, you would expect young entrepreneurs to enjoy ever-increasing access to useful advice from mentors, business leaders, experienced entrepreneurs, legal advisors and investors. Neil Rimer is a Partner and co-founder of Index Ventures.

Cap Table 128

Cap Table Option Pool Angel Investor Entrepreneur 128

Austin Startup

JANUARY 25, 2020

Austin, TX Fast forward 4 years later, here I am working for a startup at the South By South West Tech & Music festival in Austin, TX. SXSW brings a huge chunk of the music and tech world together in one city every year in March, and most startups launch their products there every year. How did I get the gig?

Delaware 62

Delaware SEC New York City New York 62

View from Seed

DECEMBER 4, 2014

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. Across both the startups I’ve personally been involved in (PayPal and LinkedIn) and the startups in which I’ve been an investor, I’ve seen a broad range of co-founder equity splits.

Equity 315

Equity Founder Sweat Equity Cofounder 315

Gust

AUGUST 30, 2012

Integrity, Passion, Startup Experience, Domain Expertise, Functional Skills, Leadership, Commitment, Vision, Pragmatism, Flexibility, Personality. Characteristics of the Entrepreneur. Characteristics of the Venture.

Founder Vesting 144

Founder Vesting Option Pool Exit Strategy Vesting 144

The Startup Lawyer

FEBRUARY 4, 2011

Great news — your startup just got accepted to an incubator! 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. Pre-money valuations startups receive from incubators are typically low…really low.

Incubator 105

Incubator Pre-Money Valuation Option Pool Advisory Board 105

Agile VC

APRIL 17, 2011

AGILEVC My idle thoughts on tech startups. Precise valuations are impossible to determine because of adjustments to employee option pools, possible buybacks of common stock, etc. How to Evaluate Firms for a Seed VC. How To Think About The Future. Cliff Notes S-1: Kayak. April 17, 2011. Quinstreet priced at $15.00/sh

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

Agile VC

DECEMBER 4, 2014

Across both the startups I’ve personally been involved in (PayPal and LinkedIn) and the startups in which I’ve been an investor, I’ve seen a broad range of co-founder equity splits. As a result, one of the trickier things co-founders tackle is determining the equity split amongst the founding group of individuals.

Cofounder 255

Cofounder Equity Founder Sweat Equity 255

This is going to be BIG.

AUGUST 21, 2023

At 43, I’m pretty darn proud of that and you might think that’s pretty fast—but if I equate that into startup terms, no one would fund me at that pace. The highest statistical likelihood for any startup is that no one gets a payout—because hard things are hard. Here’s the option pool that I think fairly incentivizes you.

Cap Table 78

Cap Table Term Sheet Database Option Pool 78

Eric Friedman

DECEMBER 30, 2020

This did not end up happening at all but there are a few startups working in this space which I think have a shot 2/ NFTs (non-fungible-tokens) will emerge as a killer use case inside an incredibly fun game at a scale. Startups pave the way for in person only monthly, quarterly, or bi-annually and large corps have 2 day a week in offices.

Stock 120

Stock Private Equity Option Pool LP 120

Genuine VC

FEBRUARY 28, 2011

This post doesn’t going into general tactical approaches of job offer negotiation, but rather focuses on the fact that with startups a significant part of compensation is related to equity or options. So optimizing a startup offer involves not just one key figure – salary – but also the option package.

Startup 121

Startup Equity Vesting Salary 121

VC Cafe

OCTOBER 16, 2010

After using Quora for a few months, I’ve found it a very helpful source of information on anything startup related: from technology, to strategy and even gossip, if that’s what you’re after. How much should it cost for a bootstrapped, lean startup to incorporate (or form an LLC)? Nothing else. Short answer: Patagonia.

Option Pool 88

Option Pool Analytics LLC Startup 88

Early Growth Financial Services

JUNE 26, 2014

Valuation — Know what these terms mean: Fully-diluted — This includes all issued stock and anything that could be converted into common stock (typically after an acquisition or IPO), such as your stock option pool. Pre-money valuation — The value of the company prior to investment, calculated on a fully-diluted basis.

Pre-Money Valuation 51

Pre-Money Valuation Option Pool Dilution Common Stock 51

Tim Keane

JANUARY 12, 2010

Startups and angels: Along the way to success.   Posted at 04:19 PM in Funding startups | Permalink. Funding startups. Startup ideas. Resources for startups. Startups and angels: Along the way to success. By Tim Keane, Angel Investor, Golden Angels Investors, LLC. TrackBack URL for this entry: [link].

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

venturehacks.com

OCTOBER 21, 2010

Venture Hacks Good advice for startups. 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.

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68

Agile VC

DECEMBER 4, 2014

Across both the startups I’ve personally been involved in (PayPal and LinkedIn) and the startups in which I’ve been an investor, I’ve seen a broad range of co-founder equity splits. As a result, one of the trickier things co-founders tackle is determining the equity split amongst the founding group of individuals.

Cofounder 173

Cofounder Equity Founder Sweat Equity 173

www.readwriteweb.com

DECEMBER 29, 2011

While certainly not every business needs to raise venture financing, it is the path for many high-growth technology startups. Earlier this week on ReadWriteStart, Steve Blank used research at The Startup Genome Project and explained: One of the biggest surprises is that success isn't about size of team or funding.

Cap Table 47

Cap Table Term Sheet Liquidation Preference Technical Review 47

Business Plan Blog

NOVEMBER 20, 2013

When it comes to the division of equity in startup, there is a similar process every entrepreneur must follow beginning with raising the first round of startup funding and, if you’re lucky, finishing at the point of IPO. You have looked at the advantages and disadvantages, and have decided it is the best option for your startup.

Equity 61

Equity Option Pool Cofounder Vesting 61

www.instigatorblog.com

OCTOBER 23, 2010

Home About Contact My thoughts & lessons learned on startups, entrepreneurship, marketing and other stuff. Changing Equity Structures for Early Startup Employees Tweet Recently someone asked me for advice on how much equity they should give to their early employees. the better the startup will be. 1% is just not a lot.

Equity 41

Equity Employee Startup Vesting 41

The Next Web

OCTOBER 7, 2013

That’s what a couple of my friends – engineers at Google and Bloomberg who have been following the rise of startup culture with intrigue – told me recently. Startup employees are granted common shares out of something called an option pool. Every time a startup raises capital, all common shareholders are diluted.

Engineer 129

Engineer Dilution Option Pool Vesting 129

Both Sides of the Table

NOVEMBER 4, 2009

This is part of my Startup Advice series. at a startup that has already raised $5 million the chances of you making your retirement money on that company is EXTREMELY small. So a friend recently called to ask for advice on becoming the CTO of a startup. If it doesn’t you’ll have done 3 startups by 26.

Stock Options 418

Stock Options Stock Liquidation Preference Option Pool 418

The Startup Lawyer

JANUARY 10, 2011

Both sets of advice tend to ignore the gap between an investor’s expression of investment interest and your startup’s receipt of the term sheet. Term sheet purgatory can seem like is an eternity for a startup, although it may last from one week to over one month. And this has potential negative consequences for the startup.

Term Sheet 64

Term Sheet Pre-Money Valuation Liquidation Preference Option Pool 64

Early Growth Financial Services

DECEMBER 4, 2014

Let me say that first, you should have already retained a good startup lawyer. It could be the size of the option pool, or maybe the provisions around reverse vesting. You came, you pitched, you conquered. Congratulations! But do you know what to do once you’re asked to sign a term sheet? Most investors will expect this.

Term Sheet 51

Term Sheet Liquidation Preference Vesting Option Pool 51

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

Advisor. ); STARTUP. 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

ithacaVC

SEPTEMBER 4, 2011

Here is the latest edition of Finance Fridays from Brad Feld called “Introducing the Cap Table and CTO” Every startup needs someone to be in charge of the Cap Table. Note how the new CTO Praveena implicitly negotiated to get her 15% founders shares after creation of the stock option pool.

Cap Table 49

Cap Table Finance Option Pool Warrant 49

techcrunch.com

FEBRUARY 25, 2010

This is an anonymous guest post from a well known startup executive: When we split the atom, Einstein remarked that everything changed but our way of thinking. You could make the same argument about acquisitions and option pools. This has always been true, but now that more startups are being bought, it has become less common.

Liquidation Preference 63

Liquidation Preference Founder Option Pool Acquisition 63

www.paulgraham.com

APRIL 28, 2010

Want to start a startup? A typical startup goes throughseveral rounds of funding, and at each round you want to take justenough money to reach the speed where you can shift into the nextgear. Few startups get it quite right. 1 ] A startups life will be more complicated, legally, if any of theinvestors arent accredited.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Scott Edward Walker

AUGUST 31, 2011

Thanks, Scott Question We’re a startup based in Palo Alto, and we just received a Series A term sheet for a $725,000 investment. But more importantly, a good startup lawyer will also discuss with you the business terms, including the structure of the deal. Who should be on their board of directors? At what valuation and on what terms?

Silicon Valley 45

Silicon Valley Term Sheet Liquidation Preference Redemption 45

Hunter Walker

MAY 7, 2014

The entrepreneurs had some ties into the broader startup community so weren’t completely on an island but hadn’t sourced or vetted any candidates. That’s not healthy for a startup. Building a senior team but pushing back on having a healthy employee option pool? Sounds great. Won’t work out well.

Hiring 108

Hiring Option Pool Early Stage Term Sheet 108

Feld Thoughts

FEBRUARY 28, 2023

KG companies have decisive tax disadvantages for startups and are, therefore, rarely used in this area. Employee option pool: The framework conditions for employee option pools remain a major problem in Germany. BAND) and the Bundesverband Deutsche Startups e.V. German Startups Association).

Germany 165

Germany Liquidation Preference Option Pool Advisory Board 165

ithacaVC

JANUARY 24, 2013

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). One interesting point that comes up a lot is how to factor the convertible debt into the premoney valuation of the Series A round. 7692 per share.

Valuation 53

Valuation Balance Sheet Option Pool Dilution 53

Hippoland

APRIL 10, 2016

But, Ada wants to split the equity 50% her, 20% Bob and 20% me with a 10% option pool. In a startup, you don’t have many things to entice people to work for your company, and stock is one of those few things. We are trying to decide how much equity to allocate to each person.

Cofounder 48

Cofounder Cap Table Equity Vesting 48