Steve Blank

APRIL 10, 2019

Stock options for all employees of startups served several purposes: Because startups didn’t have much cash and couldn’t compete with large companies in salary offers, stock options dangled in front of a potential employee were like offering a lottery ticket in exchange for a lower salary. Not everyone got the same amount of stock.

Stock Options 334

Stock Options Stock Vesting Common Stock 334

www.mattbartus.com

SEPTEMBER 24, 2011

We will grant him/her X% fully diluted shares up front, and every time he/she makes an introduction, he/she will vest in 100 shares.” Imagine when it comes time to sell the company and the buyer says “Tell me how many shares are vested because this will impact how much we pay per share.” What are the potential issues?

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

View from Seed

DECEMBER 4, 2014

It’s also worth keeping in mind that regardless of how the founders’ common stock is divided, there will be future issuance of stock that will dilute the founders over the lifecycle of the company. Ideation/IP.

Equity 315

Equity Founder Sweat Equity Cofounder 315

Agile VC

DECEMBER 4, 2014

It’s also worth keeping in mind that regardless of how the founders’ common stock is divided, there will be future issuance of stock that will dilute the founders over the lifecycle of the company.

Cofounder 255

Cofounder Equity Founder Sweat Equity 255

Agile VC

DECEMBER 4, 2014

It’s also worth keeping in mind that regardless of how the founders’ common stock is divided, there will be future issuance of stock that will dilute the founders over the lifecycle of the company.

Cofounder 173

Cofounder Equity Founder Sweat Equity 173

Steve Blank

OCTOBER 24, 2017

The founders along with all the other employees would vest their stock over 4 years (earning 1/48 a month). They had to hang around at least a year to get the first quarter of their stock (this was called the “cliff”). Some founders have three-year vesting. Today, these are no longer hard and fast rules.

Founder 274

Founder Technical Review CTO Hire IPO 274

The Startup Lawyer

MARCH 1, 2010

The board is set up to consist of 3 directors: 1 director elected by the common (founders); 1 directors elected by the preferred (investors); 1 “independent&# director (i.e., 2) Series Seed Stock Preferred Stock Purchase Agreement. Tags: Preferred Stock documents lawyer seed funding.

Preferred Stock 79

Preferred Stock Term Sheet Redemption Registration Rights 79

www.payne.org

SEPTEMBER 22, 2011

2 Stock Classes: Common and Preferred. 4 Vesting. 5 Stock vs Options. 6 Founders / Restricted Stock. The re-heating of the venture funded tech market has pushed a heat up of the hiring market, and Im getting more calls from friends asking for help understanding startup stock (equity) offers. 3 Dilution.

Equity 56

Equity Employee Vesting Preferred Stock 56

Berkonomics

OCTOBER 26, 2010

Give one percent equity to each outside board member vesting over four years of service. Pay early stage board members of companies that are not lifestyle businesses one percent of the fully diluted equity in the form of an option that vests over four years of service. Here is my best advice, based upon many boards and many years.

Stock Options 66

Stock Options Early Stage Stock Vesting 66

K9 Ventures

NOVEMBER 21, 2011

I firmly believe that if there are early employees who have been with the company long enough and have meaningful enough stakes in the company, they too should have the opportunity to sell some of their vested stock, or vested and exercised options. The concept of the Series FF stock is a good example of this.

Founder 87

Founder Common Stock Preferred Stock Stock 87

K9 Ventures

NOVEMBER 21, 2011

I firmly believe that if there are early employees who have been with the company long enough and have meaningful enough stakes in the company, they too should have the opportunity to sell some of their vested stock, or vested and exercised options. The concept of the Series FF stock is a good example of this.

Founder 84

Founder Common Stock Preferred Stock Stock 84

Both Sides of the Table

MARCH 21, 2010

In this example if they sell only $10,000 in total in year one they own zero warrants the same way that an employee with options who quits after 6 months usually owns no options when they leave your company (due to the cliff period in most vesting programs). Make the warrants for common stock and not preferred stock.

Warrant 298

Warrant Dilution Startup Stock Options 298

The Startup Lawyer

MARCH 1, 2010

The board is set up to consist of 3 directors: 1 director elected by the common (founders); 1 directors elected by the preferred (investors); 1 “independent&# director (i.e., 2) Series Seed Stock Preferred Stock Purchase Agreement. Tags: Preferred Stock documents lawyer seed funding.

Preferred Stock 40

Preferred Stock Term Sheet Redemption Registration Rights 40

ithacaVC

JUNE 20, 2011

Lawyer time required (including vesting agreements for founders): 3 to 6 hours. 2. You need (or think you need) a stock option plan: granting stock options (and other forms of equity compensation to employees like restricted stock) should be done under a written equity incentive plan.

Stock Options 58

Stock Options Vesting Subscription Agreement Founder Vesting 58

ithacaVC

DECEMBER 13, 2013

QUESTION #3: What if Founder X and Founder Y issued themselves some sort of preferred stock instead of common stock? That is fine, and should be in the form of option grants vesting over time. QUESTION #6: What if the company has already issued some preferred stock to early angels (often Series Seed stock).

Cap Table 67

Cap Table Pre-Money Valuation Option Pool Liquidation Preference 67

Startup Company Lawyer

FEBRUARY 21, 2010

Due to aggregate liquidation preferences that may exceed the acquisition price in an M&A deal, common stock may be rendered worthless. If you can’t figure this out yourself, you should probably build a liquidation preference spreadsheet to model how liquidation preferences work depending on M&A transaction value.

Retention 31

Retention Liquidation Preference Employee Common Stock 31

Tim Keane

JANUARY 12, 2010

Term-sheets for preferred stock offerings are designed to protect the investor in case things don’t go as well as planned. These include: ·       Vesting of Founder Stock. These include: ·       Vesting of Founder Stock.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

thestartuplawyer.com

FEBRUARY 24, 2010

Contact The Startup Lawyer: Home Page About Contact FAQs Glossary Ryan Roberts Law: Home Page Social Networks: Facebook Twitter LinkedIn Flickr Delicious Digg Last.FM He obviously never launched a startup and got shafted by a co-founder. He obviously never launched a startup and got shafted by a co-founder. Leave a Reply Click here to cancel reply.

Cofounder 40

Cofounder Founder Preferred Stock Startup 40

The Startup Lawyer

MARCH 11, 2010

For example, a founder stock purchase agreement is 12+ pages long because founders can, have, and will fail and/or bail on startups (hence the vesting schedule & startup repurchase option). Tags: Preferred Stock legal documents seed funding startup Startup Lawyer.

Delaware 49

Delaware Hockey Stick Preferred Stock Open Source 49

The Startup Lawyer

MARCH 11, 2010

For example, a founder stock purchase agreement is 12+ pages long because founders can, have, and will fail and/or bail on startups (hence the vesting schedule & startup repurchase option). Tags: Preferred Stock legal documents seed funding startup Startup Lawyer.

Delaware 45

Delaware Hockey Stick Preferred Stock Open Source 45

Up and Running

SEPTEMBER 20, 2021

Furthermore, there are various forms of equity, such as preferred stock, common stock, and convertible notes, which influence the present and potential future investors. Preference shares. A class of stock with special rights as described in your startup is called preference shares. Convertible notes.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

www.paulgraham.com

APRIL 28, 2010

Another difference with large investments is that the founders areusually required to accept "vesting"—to surrender their stock andearn it back over the next 4-5 years. If VCs got de factocontrol of the company and fired one of the founders, hed lose anyunvested stock unless there was specific protection against this.So

Technical Review 76

Technical Review Startup Software Review Angel Investor 76