Posted by thecossack on 2010-12-13
we would like to implement a stock options plan for employees by issuing a certain number of shares.
Does anybody have any template? Our company is based in Europe and probably this can influence the way the mechanism is implemented.
As a company, we would always retain the right of buying back these options in certain circumstances (e.g. if the employee leave the company).
Thanks in advance for your commentsPRIVATE: Members Only
Posted by thecossack on 2010-12-07
We are signing a contract where the customer asks for exclusivity in using our product for their purposes. We are fine with that if we can still use our product for other goals.
Has any one any experience with this?
Thanks in advancePRIVATE: Members Only
Posted by Anonymous on 2010-11-18
I'm in the middle of discussing joining up with a Technical Founder for a B2B play. He found me via linkedin and we've been talking for the last month. He's based on the East Coast and I'm located in Silicon Valley. He seems like a very solid guy, has good experience and seems very passionate and hard working. He's been developing the product for over one year, on his own dime, and has a first meeting with a pretty large tier 1 customer. His idea has competition from some well funded startups and one public company, but i think the market will have a few winners. He's convinced his angle is unique. He proposed that i join up with him with the below terms.
25% ownership, cofounder title
4yr vesting, 1yr cliff
VP BD, he maintains CEO role
Must have milestones to achieve re customer acquisition, funding, partnerships
A couple of issues i'm concerned about:
1. He feels that his majority ownership makes sense since he's spent a year developing the technology and all that's left is customers. He also feels that his technology is valuable because apparently an investor said that they'd give him $1M once he gets 3 customers on board.
2. He wants me to raise money asap, @ $150k, with no customers/traction only one person in the company, lots of established competition in the general space
3. He wants to maintain CEO role and be able to override business decisions if he feels he needs to
I have a few concerns:
1. His proposed split gives me the impression that the hard work in the company is already done and the easy stuff is sales, raising money, building out the company...
2. Getting investors to put money into a first time entrepeneur, with no customers or proof points in the market, no team, is not very realistic and is not the right time to do that.
3. Coming up with milestones that may be affected based on initial market reaction to his product is very tricky. I have no problem with having milestones, but don't want to set myself up for failure
I have 20yrs experience in BD, VC and starting my own sw company and am ready to take on a role like this. I just want to make sure that i'm committing myself to the right partner and not jumping into something that has too many red flags. Any advice/guidance is greatly appreciated!PRIVATE: Members Only
Posted by Chowderhead on 2010-10-30
Remember to reference check them as thoroughly as you would a potential Board member. They are working their way up the ladder and may break a rung or two on the way up :-).PRIVATE: Members Only
Posted by drake on 2010-10-05
Nobel Prize for Physics was announced today for graphene, after only 6 yrs from it's discovery.
We are working on materials to make graphene nanoribbons and I'd appreciate advice on who best to engage for VC investment (early stage, proprietary materials, good IP position).
Posted by Gunnar Holmsteinn on 2010-07-28
Tags: Operations Bootstrap
When I first heard that we should "Bootstrap" it left a huge question mark on my face. I immediately thought about my statistics courses in the university; why in the world would my start up need to to derive estimates of confidence intervals for estimators of parameters of some statistical distributions. I actually thought about some of the R programs I wrote and started thinking how that could be applied. I eventually said that there was no need for that anytime soon, maybe a few years down the road. That left an even bigger question mark on the face of the guy I was chatting with.
It turns out that Bootstrapping is also a phrase in business finance. It's about keeping a tight fist on all your expenses and knowing that Cash Flow is more important than your mother. Something we've always been keen on doing but never had the correct lingo for it. In the past two years, we've put a huge emphasis on doing stuff that people, especially the people that pay us, like. The team has been very focused on organic growth and building our company the way we want.
In my mind, starting with little to no cash and working your way up is a very healthy start for a young company having to figure out how to make a great product.
Here are my Top 6 reasons why I think it's important to start by bootstrapping:PRIVATE: Members Only (4533 Characters)
Posted by kipmcc; Kip McClanahan on 2010-07-14
As part of working with Capital Factory and my day job at Silverton Partners, I've tried to put together two example presentations to help folks who are (1) pitching investors or (2) running board meetings. I received great feedback here last year and much of that has been incorporated into the 2010 versions. I hope this helps:
many companies I meet have very similar questions regarding pitching angel investors and VCs, in particular:
- What topics are required in a pitch deck?
- What depth of information is critical to have in the deck?
- What’s is the best flow from slide to slide?
This post covers a presentation outline and discussion for what I believe is a solid starting point for best practices in a typical, periodic board presentation by a start-up CEO. A good board book clearly communicates the state of the business to board members, over the course of 2-3 hours, such that board members are equipped to perform their duties. Starting point:
any / all questions and comments welcome; hope this is helpful.
-kipPRIVATE: Members Only
Posted by ammosov on 2010-06-06
Tags: Negotiation Terms Board
Basically, never let a VC to skip taking a board seat because this means they might be an evidence they want an option to dump the startup or do a Round A on miserable terms.
Posted by ammosov on 2010-06-06
Tags: Operations Fund Raising
7 lessons, and most of them are not usual textbook stuff.
Seed round in 21 days - they did it (via Founders Institute and Venturehacks in part)PRIVATE: Members Only
Posted by on 2010-05-20
I have a company I have invested in; they've done the heavy lifting in having invested $750K in designing and launching (beta) a SaaS service. The service is narrow in its functional scope, but as we all know, the tactical company is about getting traction to be able to then do the strategic bigger play.
I'm trying to help them find funding, angels likely given investment total to breakeven is $1.5M; I've teed up the usual angels and angel networks here in Silicon valley;
My question is how or is there a source for the accredited angels who may 'get' and be interested in a ONE ROUND planned company; where the play is narrow in functional scope initially; It's execute now on market adoption.
Thanks!PRIVATE: Members Only
Posted by anon on 2010-05-13
We're looking use a file sharing website to share publications, presentations, etc. with potential investors. Are there any suggestions?PRIVATE: Members Only
Posted by Anonymous on 2010-04-22
This is self-explanatory. Hi all, can anyone recommend a good key person insurance company/policy?
Posted by Anonymous on 2010-04-12
My company will relaunch in July. We took our site down and completely shut down operations until the relaunch. However, someone was explaining to me that we should have kept out site up and operations moving forward and just let our customers know that we would be transitioning to a new format come July. My question is, is it better to relaunch fresh with a new look and feel or is it better to show modest transitional change over time?PRIVATE: Members Only
Posted by Anonymous on 2010-04-12
I'm looking to do an A-round for my company, which has been funded by angels so far. We have modest revenue, a couple of good clients and our product is live. We are not based in location with VCs, and I know from experience that A-round VC investors like to invest locally. So I'm thinking of "moving" to Silicon Valley. I'm wondering what the minimum requirements for "moving" are in the mind of VCs, since I know from experience that moving an existing company is not a good idea. Our development is all done in India anyway, so we're not moving that. I'm thinking of just taking some space at Regus in Silicon Valley. With offices being so virtual these days anyway, I would like some advice on what "moving" to Silicon Valley would really mean - spending 2 days a week there? Any feedback appreciated.PRIVATE: Members Only
Posted by MM on 2010-04-08
Looking for advice from anyone who has had experience with working with a Defense Contractor, specifically in terms of them licensing technology. Our background is in consumer products and I was not aware that they don't structure deals w. royalties in them.PRIVATE: Members Only
Posted by firstname.lastname@example.org on 2010-03-23
Hello, we are starting the funding process and are looking for someone who gets it - thus we would like to find an investor, angel, VC or otherwise, who is into books, writing, reading, literature. We would like someone who understands the publishing process a bit and most importantly can see the possibility of changing a stale, traditional industry and modernizing it through the use of technology.
If someone has any tips I would be very grateful!
Posted by Anonymous on 2010-03-01
After several months of rebuilding our business, we have finally peeked the interest of a few investors. However, one of our shortcomings is that neither my business partner nor me are good presenters. We are thinking about hiring someone to present during the interviewing process. Is this common? Do you think this is a good idea if we can get our presenter up to speed on the company's mission, goals and objectives? Any help would be appreciated.PRIVATE: Members Only
Posted by Anonymous on 2010-01-27
Tags: Operations Trademarks
No matter how obscure you think something is, or how off-beat a domain name is, never, EVER register the domain and then leave it parked even for a minute.
We just went through the painful process of spending hours and hours until we hit on a cool domain name for our rebranding (sending coupons to mobile phones) -- kupongo.com. Less than 45 days later while we were working up our new look website to launch with it, we got an inquiry from someone about buying it. When we told them we were going to use it for our business... they went and registered kupongo.net and filed a trademark for kupongo in the exact same line of business. Then tried to bully us into selling them the .com domain for $500 because "we wouldn't be able to use it anyway."
Unless they don't actually put it into use (and we can then pursue abandonment), well, we can't use the domain for OUR site.
If we had used the domain at all beforehand, well, we'd have a position. But by trying to be stealthy, and conserve cash...well...it didn't work.
Lesson learned for me...don't let it happen to you!PRIVATE: Members Only
Posted by fnazeeri on 2010-01-21
Tags: Operations Legal Agreement
Posted by Anonymous on 2010-01-07
Tags: TheFunded.com Traction
So, in my experience, there are seven levels of "traction," and each level has various nuances. For example, "the launch" could be a soft launch or a beta launch. "The idea" may be rough, modeled, patented, etc.
THE TRACTION CURVE
1. The Idea
2. The Team
3. The Prototype
4. The Launch
At each level of traction, quality of the execution is measured by investors. So, a great idea with a great team may secure a similar sized funding as a mediocre idea with strong adoption.
In the 2010 market, most semi-professional investors, such as organized angels, require a prototype for serious consideration, and most venture capitalists require initial success with adoption. There are exceptions, though rare, and you can overcome the need to hit traction thresholds by dominating in the present. Amazing adoption eliminates the need for revenue (Twitter, FaceBook, YouTube). A great team overrides the need for a prototype, etc.
Any other advice?PRIVATE: Members Only
Posted by calbin on 2009-11-04
Initially my business partner and I were so enamored with our idea that we didn't get feedback from our potential cutomers. This lead to a two year journey that should have taken 6 months.
Early on my partner and I said that we were not going to put our families in jeopardy for our venture. No credit cards. No risky loans. No robbing our 401k. We stuck by that and it was a wise choice.
From the outset we received tons of accolades from friends and family so we went to investors who said they liked our idea but couldn't figure out who was going to pay for it. The gift came in two forms 1) Not getting funding early which would have almost certainly been spent on a dead end road and 2) forcing us to make our idea stronger and better.
What our lack of funding made us do is go back to basics. We know we had the seed of a good idea but struggled to come up with a sustainable model. Along with lots of hard work we talked with potential customers and came up with a solid way to generate revenue. Our potential customers are now signing letters of support saying they like our product and find it beneficial for their business and are willing to be contacted by investors. We have never had this in previous attempts to raise money and now feel confident in our plan.
A potential investor we met early on who now heads an angel fund believes in our new plan and is working to get us funding. Our CA lawyer helped us craft a very sharp executive summary and in the next few weeks will begin making warm introductions.
Don't despair if you haven't gotten funded yet. It could be a gift in disguise.
So what I am asking of The Funded community is can you recommend any investors/angels/groups/VC's in the consumer space (specifically investors who might have a penchant for wine)? Thanks in advance and I will keep the community posted.PRIVATE: Members Only
Posted by KipMcC on 2009-08-28
The next time you talk to your law firm, let them know they should pioneer (be the first, take credit) the following concept:
Early-stage, cash-efficient start-ups increasingly require an equally efficient supply chain in order to make it work. Take for example Capital Factory, Y-combinator or even micro-style investments from more traditional VCs. A start-up raising $20k – $250k simply cant afford traditional legal costs associated with:
* equity and option plans,
* option grants,
* convertible debt agreements,
* all docs associated with being INITIALLY funded (term sheets, standardized series-A docs),
* separation agreements and release paperwork,
* contractor agreements, and so on.
I propose the following: forward-thinking law firms should create a FREE legal library that includes AT LEAST the items listed above. The should GIVE this library to start-ups that agree to become clients after a funding event of a particular size…maybe $250k or more. To be clear: I’m suggesting that law firms loss-lead with this free legal library and win clients that may become the next Google (or, realistically, may also go out of business). It’s time for the supply chain to evolve. we're starting to see some standardization of termsheets...now let's continue the thought.
Posted by TylerDurden on 2009-08-28
Good deck from Joe Beninato who's been a very successful startup Founder.
Posted by KipMcC on 2009-08-26
Recently, I shared this outline & pitch deck example with the Capital Factory companies in Austin, Texas; you may find example slides, download the PPT template file, and read descriptions / discussion for each here:
1. Title Slide
* The get everyone in the room and sitting down slide; Don’t roll forward from here until you have everyone in the room and paying attention if you can help it.
2. Agenda + Company Overview
* Make sure you’re covering what they want to cover; ask if you’re missing anything before launching into the pitch
* This is also the slide to give a quick summary of your company. This summary is important because it will give any other partners at the firm you talking to a “snap shot” of you’re company after you’re gone; it’s helpful for other partners in the firm to have at-a-glace info on what you do, in what market, company details, and so on.
3. Market + Market Context
* Why is your market interesting? Are there any compelling dynamics currently at play?
* How do you fit in? This can help set up your unique competitive advantage / “secret sauce” slide.
4. One-slide company overview: THE SLIDE
* In many cases, your entire pitch will be an interactive conversation while sitting on a single slide; this should be that slide.
* Done right, this allows you to describe what you do, who you do it for, why that’s important and your vision for the future.
5. Business Model; How we make money
* How, exactly, does your company make money? Do you have any examples of this working so far?
* Does any part of your business act as a “loss leader” for another, more valuable part?
* Do you have two models running simultaneously? is that good or bad & why? Make sure you clearly describe and delineate between them…and hopefully describe how they benefit and support each.
6. Progress, Mile stones, look into the future
* What you’ve accomplished so far?
* What you plan to do in the near future? In what timeframe?
7. Competition & your company’s “Secret Sauce”
* You relative to others in your space.
* The question that you must answer well: if your company is successful, how will you defend its business from competitors who see your success and want some or all of it for themselves? What can you do differently? What can you do uniquely and realistically for how long? What CAN’T (or is really really hard to) be duplicated? What is your special tech, model, process, team advantage or unique solution?
8. Current Partners, Customers & Pipeline
* Who are you working with today? Who will be your customer tomorrow?
* How, exactly, do you acquire customers? How much does it cost to acquire them? What is your average deal size? How could your business increase the average deal size? What is the average deal size of other companies in this same market? Does this information align with the Market Size / Market Context data from Slide #3 ? (hint: it should) Once you have a customer, can you sell them MORE stuff more easily? Why / why not / how much / when will you have it to sell? What is the expected life-time value of a customer (be careful to think about this relative to the cost to acquire a customer)?
9. Financial Details (revenue, expense, HC, projections)
* What is your current and future headcount (this equates to your burn rate as headcount is almost always the biggest expense)?
* what is your current monthly/quarterly burn rate and how does that ramp over time?
* what is your current revenue and how does that ramp over time?
* How quickly are you approaching a cash-flow breakeven point?
* What’s your revenue run-rate 12 months from now? What’s the net loss / gain over the same period?
10. Funding “ask” + use of proceeds (timing, other firms)
11. Team Overview
12. Thank you, questions, contact info (no example slide)
* Create your own deck! Create a deck that allows you to tell your story according to your style; name the slides what you want; tell your story with text or pictures (within reason)
* Don’t leave out critical information! This outline is my suggestion of a “critical information” list; no rational investor will fund your company without knowing the information suggested by this outline.
* Proactively answer big-ticket questions! If there are obvious, elephant-in-the-room sort of questions regarding your business: address them before they get asked. This is always a better way to go.
* Be passionate and informed! Investors invest in the team – show them your passion and be sure to know data from adjacent or competitive markets, companies, and models.
* Finally, it’s really important to have enough white space in your presentation format. I like a white background because it prints and projects cleanly. I like titles that are single-line and as few words as possible; and I try to keep the text/image area “middle part” of the slide as open as possible. In general, right angles are easier to make look clean than circles but your mileage may vary. Less is more when it comes to the presentation template.PRIVATE: Members Only
Posted by CEO for a while on 2009-08-10
Guys and Gals,
I'd like to recommend that we entrepreneurs band together to stop an inexcusable practice among VCs. I've done a few startups, sold a few companies, bought a few companies. Been active in the publicly-traded and private arenas. Something that completely irks me about VCs today is that they want entrepreneurs to open their books pre-term sheet (on top of the ridiculous gymnastics we already do to get capital.)
After a pitch, and untold number of follow-up discussions, a VC should be able to put down terms. We should not have to introduce them to any 3rd party (our valued business partners, customers, etc.) because its taxing to them UNTIL there's a term sheet on the table.
A later stage company would never let an investor or buyer in the door unless there's a term sheet. Why should an early stage company abandon this discipline?
My view is that we can make claims pre-term sheet. And if they find our claims to be exaggerated post-term sheet (during diligence), they can walk. It's non-binding anyway.
Thoughts?PRIVATE: Members Only (524 Characters)