http://www.bothsidesofthetable.com/2009/08/17/first-round-funding-terms-and-founder-vesting/ Entrepreneur turned VC Mon, 14 Nov 2011 23:37:00 +0000 hourly 1 http://wordpress.org/?v=3.2.1 http://www.bothsidesofthetable.com/2009/08/17/first-round-funding-terms-and-founder-vesting/comment-page-1/#comment-807 SEOmoz’s Venture Capital Process | BehindTheGeek. All rights reserved Fri, 08 Jan 2010 21:34:17 +0000 http://bothsidesofthetable.com/?p=748#comment-807 [...] the venture side and from entrepreneurs and operators. Lots of other blogs have talked about the imbalance in interests between founders and investors and current market conditions vs. expected VC portfolio returns. I [...] [...] the venture side and from entrepreneurs and operators. Lots of other blogs have talked about the imbalance in interests between founders and investors and current market conditions vs. expected VC portfolio returns. I [...]

]]> http://www.bothsidesofthetable.com/2009/08/17/first-round-funding-terms-and-founder-vesting/comment-page-1/#comment-806 SEOmoz’s Venture Capital Process | SEO Land - Get Latest News about SEO Thu, 07 Jan 2010 05:15:28 +0000 http://bothsidesofthetable.com/?p=748#comment-806 [...] the venture side and from entrepreneurs and operators. Lots of other blogs have talked about the imbalance in interests between founders and investors and current market conditions vs. expected VC portfolio returns. I [...] [...] the venture side and from entrepreneurs and operators. Lots of other blogs have talked about the imbalance in interests between founders and investors and current market conditions vs. expected VC portfolio returns. I [...]

]]> http://www.bothsidesofthetable.com/2009/08/17/first-round-funding-terms-and-founder-vesting/comment-page-1/#comment-805 SEOmoz’s Venture Capital Process | Best Traffic Tips Thu, 07 Jan 2010 00:01:54 +0000 http://bothsidesofthetable.com/?p=748#comment-805 [...] the venture side and from entrepreneurs and operators. Lots of other blogs have talked about the imbalance in interests between founders and investors and current market conditions vs. expected VC portfolio returns. I [...] [...] the venture side and from entrepreneurs and operators. Lots of other blogs have talked about the imbalance in interests between founders and investors and current market conditions vs. expected VC portfolio returns. I [...]

]]> http://www.bothsidesofthetable.com/2009/08/17/first-round-funding-terms-and-founder-vesting/comment-page-1/#comment-804 Finally… This Works » Blog Archive » SEOmoz’s Venture Capital Process Wed, 06 Jan 2010 17:03:30 +0000 http://bothsidesofthetable.com/?p=748#comment-804 [...] the venture side and from entrepreneurs and operators. Lots of other blogs have talked about the imbalance in interests between founders and investors and current market conditions vs. expected VC portfolio returns. I [...] [...] the venture side and from entrepreneurs and operators. Lots of other blogs have talked about the imbalance in interests between founders and investors and current market conditions vs. expected VC portfolio returns. I [...]

]]> http://www.bothsidesofthetable.com/2009/08/17/first-round-funding-terms-and-founder-vesting/comment-page-1/#comment-803 SEOmoz’s Venture Capital Process | Peer Marketing Group Wed, 06 Jan 2010 16:26:40 +0000 http://bothsidesofthetable.com/?p=748#comment-803 [...] the venture side and from entrepreneurs and operators. Lots of other blogs have talked about the imbalance in interests between founders and investors and current market conditions vs. expected VC portfolio returns. I [...] [...] the venture side and from entrepreneurs and operators. Lots of other blogs have talked about the imbalance in interests between founders and investors and current market conditions vs. expected VC portfolio returns. I [...]

]]> http://www.bothsidesofthetable.com/2009/08/17/first-round-funding-terms-and-founder-vesting/comment-page-1/#comment-802 SEOmoz’s Venture Capital Process « SEO Blog Wed, 06 Jan 2010 12:20:14 +0000 http://bothsidesofthetable.com/?p=748#comment-802 [...] the venture side and from entrepreneurs and operators. Lots of other blogs have talked about the imbalance in interests between founders and investors and current market conditions vs. expected VC portfolio returns. I [...] [...] the venture side and from entrepreneurs and operators. Lots of other blogs have talked about the imbalance in interests between founders and investors and current market conditions vs. expected VC portfolio returns. I [...]

]]> http://www.bothsidesofthetable.com/2009/08/17/first-round-funding-terms-and-founder-vesting/comment-page-1/#comment-801 SEOmoz’s Venture Capital Process « Man in the net :: Ontology :: Semantic :: Knowledge Wed, 06 Jan 2010 12:13:19 +0000 http://bothsidesofthetable.com/?p=748#comment-801 [...] the venture side and from entrepreneurs and operators. Lots of other blogs have talked about the imbalance in interests between founders and investors and current market conditions vs. expected VC portfolio returns. I [...] [...] the venture side and from entrepreneurs and operators. Lots of other blogs have talked about the imbalance in interests between founders and investors and current market conditions vs. expected VC portfolio returns. I [...]

]]> http://www.bothsidesofthetable.com/2009/08/17/first-round-funding-terms-and-founder-vesting/comment-page-1/#comment-800 Doing It Right the First Time: The 15 Most Common, but Avoidable, Mistakes Made by High Growth Start-ups | VC Deal Lawyer Wed, 16 Dec 2009 04:18:20 +0000 http://bothsidesofthetable.com/?p=748#comment-800 [...] 4.       Failing to properly structure founder shares - once you’ve decided who the founders are going to be, you’ll need to structure your founder shares.  Founder shares embody the concept that if a founder receives all of their shares upfront, fully vested, then there’s no incentive to stick around and help build the company.  That founder could walk one day, keep all of their shares and piggyback on the hard work of the remaining founders.  Founder shares usually vest over a period of time and are issued as restrictive stock grants.  By way of example, a founder may be issued a restrictive stock grant of 400,000 shares of common stock, vesting annually/monthly/quarterly over 4 years.  If the founder stays for the full 4 years, he/she keeps all 400,000 shares.  If the shares vested annually and the founder leaves 2 1/2 years later, they keep 200,000 shares (the company usually buys back the remaining 200,000 shares at the same price the founder paid for them).  If they are fired for cause, it is possible that they could lose all of the shares.    If there is just one founder, there is really no issue until such time that the company seeks to raise outside capital.  At that time, the investors may insist that the founder put some of their shares on a vesting schedule – again, to align both founder’s and investor’s incentives.  If there are multiple founders, then this is something that should be put in place at formation.  For some further info, see both of these articles from Mark Suster regarding Founder Prenups and Founder Vesting.  [...] [...] 4.       Failing to properly structure founder shares – once you’ve decided who the founders are going to be, you’ll need to structure your founder shares.  Founder shares embody the concept that if a founder receives all of their shares upfront, fully vested, then there’s no incentive to stick around and help build the company.  That founder could walk one day, keep all of their shares and piggyback on the hard work of the remaining founders.  Founder shares usually vest over a period of time and are issued as restrictive stock grants.  By way of example, a founder may be issued a restrictive stock grant of 400,000 shares of common stock, vesting annually/monthly/quarterly over 4 years.  If the founder stays for the full 4 years, he/she keeps all 400,000 shares.  If the shares vested annually and the founder leaves 2 1/2 years later, they keep 200,000 shares (the company usually buys back the remaining 200,000 shares at the same price the founder paid for them).  If they are fired for cause, it is possible that they could lose all of the shares.    If there is just one founder, there is really no issue until such time that the company seeks to raise outside capital.  At that time, the investors may insist that the founder put some of their shares on a vesting schedule – again, to align both founder’s and investor’s incentives.  If there are multiple founders, then this is something that should be put in place at formation.  For some further info, see both of these articles from Mark Suster regarding Founder Prenups and Founder Vesting.  [...]

]]> http://www.bothsidesofthetable.com/2009/08/17/first-round-funding-terms-and-founder-vesting/comment-page-1/#comment-809 msuster Thu, 10 Sep 2009 03:52:22 +0000 http://bothsidesofthetable.com/?p=748#comment-809 thanks for your feedback. much appreciated. thanks for your feedback. much appreciated.

]]> http://www.bothsidesofthetable.com/2009/08/17/first-round-funding-terms-and-founder-vesting/comment-page-1/#comment-9184 msuster Thu, 10 Sep 2009 03:52:22 +0000 http://bothsidesofthetable.com/?p=748#comment-9184 thanks for your feedback. much appreciated. thanks for your feedback. much appreciated.

]]>