Remove tag stock-dilution
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Understanding the Terms of Startup Investment

Onevest

Stock Options A common request from an investor is for a stock option – essentially a percentage of available shares in return for investment. Anti-Dilution Agreement This stipulation also protects the investor. Legal expertise is usually required in order to agree on how much dilution takes place.

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Want to Know How VC’s Calculate Valuation Differently from Founders?

Both Sides of the Table

Things like “ participating preferred stock &# in legalese unsurprisingly never actually call out, “hey, this is the participating preferred language.&# We got a3x participating liquidation preference with interest (not participating with a 3x cap, but 3x participating. 4 * $4 million) and not $4 million.

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Should Your Startup Give Performance-Based Warrants?

Both Sides of the Table

A “warrant&# is a right, but not an obligation for a company to buy stock in your company at a future date and at a pre-agreed price. Think of it as similar to an employee stock option. Future investors aren’t likely to mind that you had a PBW program because the dilution will be taken before they invest.

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2010 VC Funding Outlook for Startups – Prepare for Winter (Part 3/3)

Both Sides of the Table

Unemployment coupled with a stock market drop will stop this spending cold IMHO. If these factors impact earnings the stock market may be headed South – If unemployment rises housing prices won’t. This will likely cause the stock market to contract. If the stock market holds then the pace of VC may hold steady.

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Early stage boards work for stock options, not cash.

Berkonomics

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. Inside board members, CEO and any other paid employees are not paid for board service in either stock options or cash.

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Want to Raise Venture Capital More Easily? Clean Up Your Own Shite First

Both Sides of the Table

Liquidation preference is the amount of money that an investor gets paid before the common stock (e.g. It also gets the new investor concerned that management (common stock holders) will not be incentivized because they realize that the investors will take most of the money unless there is a big upside scenario.

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Outside directors are a price of investment.

Berkonomics

Tags: Growth! However, outside professional investor board members can be a very good asset to the corporation with the skills, experience and broad relationships many bring to the boardroom table. Starting up Raising money.