Startup Professionals Musings

MAY 1, 2023

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. Obviously it should be amended later, as roles are more clearly defined, and execution proceeds.

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Equity Technical Cofounder Cofounder Distribution 258

YoungUpstarts

DECEMBER 1, 2020

by Joel Patterson , the founder of The Vested Group and author of “ The Big Commitment: Solving The Mysteries Of Your ERP Implementation “ As a challenging year winds down, companies are sifting through what worked and what didn’t as they prepare to reboot for 2021 after dealing with the many difficulties brought on by the pandemic.

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Vesting Software Review Leadership Founder 172

Eric Friedman

NOVEMBER 18, 2022

An underutilized action by founders is canceling their vesting due to lack of interaction or help with your company. Lean on the questions and comments here as a way to provide a framework for the conversation, a guide for equity and vesting, and a place you can both reference. How does vesting equity with an advisor work?

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Early Stage Equity Vesting Founder 103

Startup Professionals Musings

AUGUST 9, 2020

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. Obviously it should be amended later, as roles are more clearly defined, and execution proceeds.

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Cofounder Startup Technical Cofounder Equity 436

Startup Professionals Musings

FEBRUARY 18, 2023

Calculate employee stock option values and vesting times, as well as salary. Since nine out of ten startups fail completely, serious investors look for a 10X return on their investment within five years. Look for examples of similar companies and revenue multiples achieved from acquirers.

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Startup Burn Rate Sweat Equity Technical Review 217

Both Sides of the Table

AUGUST 17, 2009

One very important item from Chris’s original post that wasn’t picked up by Fred or Brad is founder vesting. Chris writes that early-stage deals should have: Founder vesting w/ acceleration on change of control. Without proper vesting you also place a risk on all other co-founders. I totally agree.

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Founder Vesting Vesting Founder Term Sheet 252

Startup Professionals Musings

MAY 22, 2020

Calculate employee stock option values and vesting times, as well as salary. Since nine out of ten startups fail completely, serious investors look for a 10X return on their investment within five years. Look for examples of similar companies and revenue multiples achieved from acquirers.

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Startup Technical Review Due Diligence Burn Rate 436

Startup Professionals Musings

JANUARY 15, 2021

This is the purpose of a vesting schedule, which issues allocated stock over time. Typically, vesting in startups occurs monthly over four years, starting with the first 25 percent of shares vesting only after an owner has remained active for at least 12 months (one year cliff ). Key founder vesting should have no cliff.

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Vesting Dilution Cofounder Founder Vesting 306

K9 Ventures

OCTOBER 27, 2016

One of these norms is how founder vesting and employee vesting works. I won’t get into employee vesting today as that has much more to consider than I have time to cover in this short post today. Here is a good summary post from Cooley GO on Founder Vesting. The first is fairly obvious.

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Founder Vesting Vesting Founder Term Sheet 48

The Startup Lawyer

JANUARY 27, 2018

One of the most asked questions I receive when setting up new startup companies is “Do my vesting shares have any voting rights?” ” Or in other words, does a stockholder only get to vote based on their amount of vested shares?

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Vesting Startup Founder 52

The Next Web

JULY 21, 2013

This is why vesting is so important. Investing in vesting. Vesting means that at the very beginning each founder gets his or her full package of stocks at once to avoid getting taxed for capital gains; but, the company has the right to purchase a percentage of the founder’s equity in case he or she walks away. An example.

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Vesting Founder Startup Cofounder 143

SoCal CTO

SEPTEMBER 27, 2011

Unlike the founders, the employees have to wait until their grants vest, working at a company no longer of their choosing for two years. Stock vests for 4 years. Oh, and one last thing, make sure you figure this out upfront, you have it vest, you have ways to get it back, etc. Is it Time for You to Earn or to Learn?

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Early Stage Equity Startup CTO Hire 391

The Startup Magazine

SEPTEMBER 11, 2023

For instance, managerial staff might wear branded blazers, while field workers might have branded high-visibility vests. Can branded workwear be customised for different roles within a company? Absolutely, different roles may require varied attire. Customisation ensures each employee has workwear suited to their role.

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Startup Technical Review Employee Vesting 124

SoCal CTO

NOVEMBER 1, 2010

Thirty more articles related to this: How To Calculate Sweat Equity - Get Venture: Venture Made Transparent , February 11, 2010 How Much Equity a Technical Cofounder Should Get - Nathan Hurst , July 19, 2010 When You Should Hire a Dev Shop (other than “never”) - Brad Hargreaves , March 7, 2010 Make Sure Sweat Equity Vests - Get Venture: Venture Made (..)

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Technical Cofounder CTO Hire Equity Sweat Equity 241

Startup Professionals Musings

SEPTEMBER 10, 2018

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. Obviously it should be amended later, as roles are more clearly defined, and execution proceeds.

Equity 239

Equity Cofounder Technical Cofounder Founder 239

Scott Edward Walker

SEPTEMBER 28, 2011

Vesting Restrictions. The first deadly mistake relates to vesting restrictions. In addition, sometimes a portion of the shares will be deemed to be vested “up front” – meaning that they are not subject to vesting — particularly where a founder has made a significant contribution prior to the company’s incorporation.

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Vesting Startup IP Software Review 89

Austin Startup

DECEMBER 9, 2019

Another red flag is when a SIC member asks for equity in your company upfront, without any performance vesting standards. Rule Number Two: when giving equity, it should always vest over time for performance tied to measurable goals such as sales or results that move your KPIs. This is a bad deal for you, if you take it.

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Startup Vesting Early Stage Seed Capital 72

VC Adventure

AUGUST 16, 2020

My background thesis inherent in this is that employees with options should continue to vest new option as they continue to work for your business. The grant would begin vesting on the employee’s 4th anniversary and will vest monthly over 4 years. I think this is both practical and fair.

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Programming Vesting Equity Employee 149

The Startup Magazine

AUGUST 19, 2022

To keep workers as safe as possible, it’s necessary to invest in and police proper safety gear wear like helmets, vests, gloves, goggles, masks and toe guards. People can fall from great heights and something can fall on them from great heights.

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Operations Technical Review Mobile Vesting 118

SiliconHills

MAY 14, 2015

Vested Finance, an Austin-based financial technology startup, announced it has closed on $5 million in seed financing led by Sandleigh Ventures. The Austin-based company plans to use the money to expand its operations by hiring a development team to create and distribute its mobile app.

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Vesting Finance San Francisco Austin 48

Scott Edward Walker

FEBRUARY 6, 2016

“I didn’t even know what a vesting schedule was… [and] that mistake probably cost me billions of dollars.” Indeed, the failure to set-up vesting schedules is now the most common mistake I see startups make. This is exactly what would happen without vesting schedules. www.youtube.com/watch?v=-R01YcgJ3Yw. v=-R01YcgJ3Yw.

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Vesting Cofounder Equity Startup 40

Scott Edward Walker

DECEMBER 14, 2015

One of the biggest mistakes I see startups make is failing to set-up vesting schedules for the founders. v=-R01YcgJ3Yw What Is a Vesting Schedule? A vesting schedule is a mechanism by which the ownership of the stock issued to the founders is earned over time (typically four years, as discussed below), rather than immediately.

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Vesting Founder Cofounder Stock 40

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. Praveena is just like the other two founders, where her equity will vest over 4 years. Time to update the cap table.

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Cap Table CTO Hire Technical Cofounder Cofounder 133

The Next Web

OCTOBER 7, 2013

It is typical for employees to vest their options over four years with a one year cliff, which means a new hire must stay on the company for at least one year to see any shares. After a year, shares will vest in monthly or quarterly splits until the full grant is vested. How do you feel about that number?

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Startup Engineer Dilution Vesting 129

Scott Edward Walker

FEBRUARY 1, 2014

Mistake #3 : not setting-up vesting schedules (at 17:19). Mistake #3: Not Setting-Up Vesting Schedules. Vesting schedules must be established to protect the other co-founders (plus, VC’s will typically require them). Typical vesting schedule: four years on a monthly basis. Up-front vesting possible.

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Startup Software Review Accredited Investor Due Diligence 111

Scott Edward Walker

FEBRUARY 1, 2014

If you would like to jump to different sections of the video, here’s how it breaks down: Mistake #1: forming the wrong entity (at 1:25) Mistake #2: not buttoning-down IP ownership issues (at 10:20) Mistake #3: not setting-up vesting schedules (at 17:19) Mistake #4: not complying with applicable securities laws (at 29:21) Mistake #5: not doing (..)

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Startup Software Review Accredited Investor Due Diligence 111

ConversionXL

NOVEMBER 6, 2019

Vested Technology spent $17k on their MVP. Vested Technology is a recruiting-automation platform that works alongside teams to identify, engage, and hire passive candidates. Prior to his role at Vested Technology, co-founder and CEO Akash Srivastava worked on Wall Street. He spent $17k to launch Vested Technology’s MVP.

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Cofounder Sweat Equity Vesting Software Review 78

Board Effect

OCTOBER 19, 2020

A conflict of interest exists when a board member, officer, staff member, or volunteer has a vested interest in money, status, relationships, or reputation that has the potential to compromise their actions, judgment, or decision-making. A conflict occurs when you have a vested interest (i.e.

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Vesting Intellectual Property Reputation Technical Review 98

ithacaVC

NOVEMBER 1, 2011

I am a big fan of change of control option vesting acceleration, particularly for the executive team. Normally employee options vest over 4 years, with 25% vesting after year 1 and then the balance pro rata (monthly or quarterly) over the remaining 3 years. Going public does NOT equal a change of control.

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Vesting Pre-Money Valuation Liquidation Preference Stock Options 60

Both Sides of the Table

AUGUST 17, 2009

Founder vesting. Yesterday I wrote a blog posting on founder vesting (see here ). You should implement restricted stock with vesting at the earliest stages in your company -even before the VC’s ask. Founder vesting is an insurance policy for all team members involved. Teams create companies – not individuals.

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Founder Vesting Cofounder Vesting Stock Options 365

Startup Professionals Musings

JANUARY 22, 2013

These shares are allocated and committed, but not really issued and owned (vested) until later. Typically, vesting in startups occurs monthly over 4 years, starting with the first 25% of such shares vesting only after the employee has remained with the company for at least 12 months (one year “cliff”). Vesting with no cliff.

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Vesting Startup Stock Founder Vesting 247

NZ Entrepreneur

JUNE 9, 2022

This does need to be balanced with the fact that video calls have made it easier to include everyone in every meeting where they may only have a slightly vested interest so there maybe a need for multi-tasking sometimes! 5: Team building.

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Vesting Bandwidth Technical Review Video 119

Both Sides of the Table

AUGUST 15, 2012

You’ll have a peer relationship with another CEO that you have a vested interest in that crosses over to a board – CEO relationship. . You’ll be on the other side of the financing discussions (a board member, rather than the CEO). . You’ll understand “fiduciary responsibility” more deeply. . You’ll get exposed to new management styles.

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Founder Startup Vesting Entrepreneur 294

Both Sides of the Table

AUGUST 17, 2009

This is part of my ongoing series “Pitching a VC“ There’s a great meme developing this morning on the need to simplify funding terms and documents. The meme was kicked off by Chris Dixon with this post saying that term sheets need to be simplified and align investor / founder interests.

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Founder Vesting Vesting Founder Term Sheet 252

Up and Running

OCTOBER 28, 2022

You have a vested interest in its success, which can provide you with the drive needed to overcome challenges and establish strong relationships with customers, vendors, suppliers, and so on. Your own personal funds will get you only so far.

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Startup Cost Early Stage Angel Investor 138

The Next Web

JUNE 15, 2012

And giving equity as compensation can help build loyalty among contractors and consultants, as they now have a truly vested interest in your company’s success. When it comes time to sell the company or go public, you’ll need to know exactly how many shares are vested as that will impact the price per share. Pitfalls in sharing equity.

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Equity Stock Options Vesting Silicon Valley 116

Startup Professionals Musings

MARCH 23, 2014

These shares are allocated and committed, but not really issued and owned (vested) until later. Typically, vesting in startups occurs monthly over 4 years, starting with the first 25% of such shares vesting only after the employee has remained with the company for at least 12 months (one year “cliff”). Vesting with no cliff.

Stock 258

Stock Vesting Founder Vesting Founder 258