SoCal CTO

SEPTEMBER 27, 2011

Paul Graham provides what is roughly the core formula for equity at any point in The Equity Equation : You can use the same formula when giving stock to employees, but it works in the other direction. If the company's valuation is $2 million, $90k is 4.5%. Stock vests for 4 years. 11.1% - 4.5% = an offer of 6.6%. Wait a second.

Early Stage 391

Early Stage Equity CTO Hire Sweat Equity 391

The Startup Magazine

JULY 25, 2021

In fact, the announcement of the share issue led to a decline in Galactic share prices and overall market valuation. Ferro adds that given the company sold stock worth more than $450 million in 2020, shareholders are concerned there will be more share offerings in the future. Understand market share . Boost customer satisfaction.

Valuation 162

Valuation Artificial Inteligence Dilution Marketing 162

YoungUpstarts

NOVEMBER 2, 2020

REASON 6: Digitally Driven Companies Have Higher Valuations. Lastly, and perhaps most importantly, digitally driven companies have consistently higher valuations. According to MIT, more digitally “mature” companies achieve market valuations 12 percent higher than competitors.

Valuation 264

Valuation Technical Review Revenue Operations 264

Both Sides of the Table

JUNE 5, 2011

2: As expected at least one person accused me of writing this post because I want to see lower valuations. On a public stock market that is the value that investors place on future free cash flows of the business discounted to today’s date to account for the time value of money. Private markets for stocks are the opposite.

Pre-Money Valuation 336

Pre-Money Valuation Valuation Silicon Valley Stock 336

Steve Blank

JULY 11, 2017

Before the rapid rise of Unicorns, (startups with a valuation over a billion dollars), when boards were still in control, they “encouraged” the hiring of “adult supervision” of the founders after they found product/market fit. It was so compelling, everyone worked extremely long hours, for little pay and some stock. Adult Supervision.

Part-Time VPE 308

Part-Time VPE Liquidity Event Stock Engineer 308

The Startup Magazine

MARCH 14, 2022

Here, the company’s valuation benchmark is set, and funding is solicited accordingly. Once the company has established itself and created brand recognition, then the company’s promoters look to list the shares of the company on the stock exchanges. Promoters try to raise this funding majorly from Angel Investors.

Technical Review 145

Technical Review Due Diligence India Startup 145

Steve Blank

SEPTEMBER 5, 2018

Tech IPO prices exploded and subsequent trading prices rose to dizzying heights as the stock prices became disconnected from the traditional metrics of revenue and profits. And if the company does go public, the valuations are at least 10x of the last bubble. Some have labeled this period as irrational exuberance.

Lean 335

Lean Burn Rate Startup IPO 335

Steve Blank

JUNE 27, 2017

Uber – current valuation >$70 billion – knew the day they started that their ridesharing service violated the law in most jurisdictions. Airbnb – current valuation $31 billion – allows people to rent out their homes, rooms or apartments to visitors. Here are some of the most visible examples.

Startup 275

Startup New York City Valuation Distribution 275

Both Sides of the Table

JULY 29, 2010

We received so much positive feedback from our This Week in Venture Capital show walking through valuation calculations & term sheets that we decided to do a Q&A show this week to address topics that entrepreneurs want to learn about. The best thing to get is a “right sized&# valuation. A: It’s not best.

Venture Capital 282

Venture Capital Term Sheet Valuation Stock Options 282

Startup Professionals Musings

MARCH 23, 2014

In reality, so-called “Founder’s” shares are simply common stock, issued at the time of startup incorporation, for a very low price, and normally allocated to the multiple initial players commensurate with their investment or role. Here are some typical special terms and considerations for Founder’s stock: Negligible real value.

Stock 256

Stock Vesting Common Stock Founder Vesting 256

Steve Blank

APRIL 26, 2022

At the turn of the century after the dotcom crash, startup valuations plummeted, burn rates were unsustainable, and startups were quickly running out of cash. They offered desperate founders more cash but insisted on new terms, rewriting all the old stock agreements that previous investors and employees had. They’re Back.

Cram Down 404

Cram Down Founder Venture Capital Recapitalization 404

ReadWriteStart

JUNE 1, 2020

The shares given out can either be common stocks or preferred stocks. ? Debt investment. The bridge or exit stage is generally of very large transactions and for companies with substantial valuation. Point number 3: Never raise money with an increased valuation. Bridge or exit stage. It might be tempting to do so.

Startup 150

Startup Entrepreneur Elevator Pitch Seed Stage 150

Startup Professionals Musings

SEPTEMBER 10, 2018

Investors may not be called co-founders, but they always get equity, commensurate with their share of the total costs anticipated, or share of the current valuation. Even with an agreed initial equity split, it’s smart to have Founder’s stock actually issue or vest over a period of at least two years, on a month-by-month basis.

Equity 238

Equity Cofounder Technical Cofounder Intellectual Property 238

VC Cafe

FEBRUARY 27, 2023

Taking stock of the venture capital market in 2023, it’s clear to see that we’re in a transition point. Seed and pre-Seed investment levels and valuations remain healthy, there’s more talent in the market and less competition.

Venture Capital 215

Venture Capital Technical Review LP Institutional Investors 215

Tim Keane

JANUARY 12, 2010

Term-sheets and Valuations: Thinking about Negotiations.   I’ve sat down with entrepreneurs and a copy of a term sheet guide I like [ “Term Sheets & Valuations - A Line by Line Look at the Intricacies of Venture Capital Term Sheets & Valuations ” by Alex Wilmerding, Aspatore Press.] The Valuation Question.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

The Startup Magazine

OCTOBER 3, 2019

Fortunately, stock loans are another way to get funds if you own shares in securities. For those struggling to gain access to money lending via traditional banking institutions, stock loans, also called securities lending, can be a helpful financial resource. Strengths of Stock Loans. Image by Gerd Altmann from Pixabay.

Stock 75

Stock Angel Investor Startup SEC 75

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 set our sites on our IPO price and then worked back to our current valuation and showed potential employees what we thought they could earn (with all legal caveats) if the company was successful. We give out stock options.

Stock Options 294

Stock Options Stock Valuation Liquidation Preference 294

VC Adventure

AUGUST 15, 2018

As is true today, there was a requirement that options be priced at or above the “fair market value” of the underlying stock (otherwise there would be tax consequences to the optionee and sometimes to the company as well). Over night a cottage industry was created to conduct these valuations.

Valuation 48

Valuation Common Stock Cap Table Software Review 48

Up and Running

SEPTEMBER 19, 2017

That’s because obtaining a pre-money valuation for a concept level technology company in excess of $1 million is difficult, particularly for a startup founder without a proven track record. By contrast, obtaining a pre-money valuation of $5 million for a business with a new viable product and even very minimal sales is somewhat reasonable.

Private Equity 94

Private Equity Pre-Money Valuation Equity Startup 94

Both Sides of the Table

AUGUST 24, 2015

If you didn’t notice that the stock markets in the US dropped nearly 4% today (after falling last Thursday and Friday) then you were probably completely off-the-grid and on vacation. Simply put – I buy the long-term case for having a portion of one’s savings in stocks. It was a nerve racking morning. Neither do I.

Stock 150

Stock Finance Marketing Valuation 150

YoungUpstarts

MARCH 11, 2015

With the daily demands of running a business along with the financial pressures and challenges inherent in early-stage companies, a business valuation may not be the first thing an entrepreneur thinks of when he awakes each morning. When does a startup company need a business valuation? The timing will vary depending on the purpose.

Valuation 100

Valuation Stock Options CPA Merger 100

Austin Startup

MARCH 22, 2021

In recent years we’ve seen mega-rounds of investment and sky-high valuations. billion Series D round giving the company a valuation of about $14 billion!* Reason 3: Cheap to get started The third and most exciting reason I love marketplaces is that they don’t require you to purchase any inventory or stock.

Software Review 100

Software Review San Francisco Valuation Stock 100

This is going to be BIG.

MAY 9, 2022

I’ve been asked by portfolio companies and plenty of others about how they should be changing their strategy given the stock market pullback and what they’ve been hearing on “VC twitter”. So, yeah, that’s going to come down—especially because they likely got over their skis on valuation. The very best companies had money on tap.

Stock 97

Stock Marketing Valuation Later Stage 97

Transformify

MARCH 4, 2020

The stock price of Wirecard plunged almost immediately and it took sufficient time to recover. Nevertheless, the information publicly disclosed by Financial Times raises questions and it comes to no surprise that the stock of Wirecard has dropped by almost one third after the announcement. billion valuation.

Technical Review 78

Technical Review Valuation Stock Acquisition 78

Gust

MARCH 16, 2014

In reality, so-called “Founder’s” shares are simply common stock, issued at the time of startup incorporation, for a very low price, and normally allocated to the multiple initial players commensurate with their investment or role. Here are some typical special terms and considerations for Founder’s stock: Negligible real value.

Stock 175

Stock Vesting Common Stock Founder Vesting 175

Both Sides of the Table

SEPTEMBER 10, 2021

I’m over-paying for every check I write into the VC ecosystem and valuations are being pushed up to absurd levels and many of these valuations and companies won’t hold in the long term. On the one hand, you’re over paying for every investment and valuations aren’t rational. That never would have happened 10 years ago.

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

YoungUpstarts

MAY 7, 2015

Employee stock ownership plans (ESOPs) can be an attractive way for an owner to sell a company and for employees to gain an ownership stake. ESOPs are qualified retirement plans that buy, hold and sell company stock for the benefit of employees. more than 50% of the stock is sold to the ESOP). by Timothy L.

Stock 100

Stock Employee Private Equity Valuation 100

Startup Professionals Musings

DECEMBER 11, 2022

Non-credible funding request or unreasonable valuation. Future unproven projections don’t set today’s valuation. Experienced entrepreneurs understand investor expectations of Board representation, preferred stock, and payments based on interim milestones. Investors are looking to buy a chunk of the business, not the product.

Due Diligence 271

Due Diligence Intellectual Property Entrepreneur Preferred Stock 271

Gust

OCTOBER 13, 2023

Depending on how the note is written and the amount and valuation of the equity (ie, stock) sale, the conversion may be either optional on the lender's part, or mandatory.

Stock 91

Stock Valuation Equity Conversion 91

View from Seed

SEPTEMBER 14, 2021

Or is there a major disconnect between a portfolio’s valuations and the actual dollars returned to LPs? Both early- and late-stage startup valuations are currently elevated. For context, seed-stage pre-money valuations are up 24% from H1 2020 to H1 2021. US VC versus stocks. How have more recent vintages performed?

Valuation 319

Valuation Pre-Money Valuation Distribution Early Stage 319

David Teten

JANUARY 19, 2021

Yes, via conversion rights at a valuation cap. Yes, via conversion rights at a valuation cap. Eligible for favorable treatment under Qualified Small Business Stock exemption, if structured as equity. This applies if the investment converts into common stock; details are beyond this essay’s scope. Founder retains control.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

View from Seed

SEPTEMBER 14, 2021

Or is there a major disconnect between a portfolio’s valuations and the actual dollars returned to LPs? Both early- and late-stage startup valuations are currently elevated. For context, seed-stage pre-money valuations are up 24% from H1 2020 to H1 2021. US VC versus stocks. How have more recent vintages performed?

Valuation 295

Valuation Pre-Money Valuation Distribution Early Stage 295

Start Up Blog

DECEMBER 30, 2013

Tech valuations & bubblenomics: Crazy company valuations continue to astound. We are absolutely in another technology bubble, this time it is a valuation bubble, rather than an investment boom. It seems that everyone forgets that valuations must be a function of earnings, or expected future earnings.

Technical Review 100

Technical Review Valuation Software Review Social Media 100

Startup Professionals Musings

OCTOBER 7, 2010

In reality, so-called “founder’s” shares are simply common stock, issued at the time of startup incorporation, for a very low price, and normally allocated to the multiple initial players commensurate with their investment or role. Here are some typical special terms for founder’s stock: Negligible par value. Stock survives investment.

Stock 214

Stock Vesting Common Stock Founder Vesting 214

YoungUpstarts

JANUARY 10, 2018

How do you find the balance between not too small to prove itself but not too big to have an off-putting valuation? Minimizing losses in the year before you begin shopping around for buyers will increase profit and help you get that higher valuation. Fact is, you just don’t know whether your business is ready to sell.

Valuation 122

Valuation Technical Review Exit Strategy Metrics 122

Gust

JULY 23, 2012

Donations of private stock enable investors, founders and employees to support charitable causes and contribute to the community while receiving simultaneous benefits in the form of substantial cash savings from reduced taxes as well as bypassing capital gains taxes. These assets often have a relatively low cost basis (e.g. The Tax Benefit.

Stock 114

Stock Capital Gains Warrant Stock Options 114

Berkonomics

AUGUST 10, 2023

To protect against such an event, almost every professional investor includes a clause in the investment documents which allow the investor to “put” the stock back to the company after five years, requiring the company to pay back the investment plus dividends accrued during the term of the investment. Draconian terms?

Liquidity Event 116

Liquidity Event Initial Public Offering Dividend Valuation 116