What should I put in direct costs vs. overhead?Jamie Goldstein
How do I build a financial model?Jamie Goldstein
How do I navigate a university spinout?Jamie Goldstein
How do I know what is fair in my term sheet and what isn't?Jamie Goldstein
How do I deal with fraud?Jamie Goldstein
Part 2: How do I develop a winning business model?Jamie Goldstein
How do I share news of delays with customers and prospects?Jamie Goldstein
What do I do if I no longer want to run my company?Jamie Goldstein
What is expected from an R&D focused company who won't have revenue for years?Jamie Goldstein
Part 2: What should I consider when starting a company with a professor?Jamie Goldstein
Why does Pillar offer to buy common stock?Jamie Goldstein
During economic downturns, every company faces a different situation, and what’s right for yours could depend on stage, funding history, cash balance, and space. What to do falls into three buckets: fundraising, operational focus, and reducing burn rate.
There are many venture backed startups that have a VC representative from every round — seed, A, B, C, D, etc. It is often said that the performance of a company is inversely proportional to the number of VCs on the Board. A better Board would be one that has a mix of VC representatives and industry experts. But how to get there?
The standard VC term sheet has the concept of anti-dilution, meaning if the next round is priced lower than the previous round, the VC will be entitled to more shares (retroactively) to make up for this unfortunate circumstance. We don’t like the sound of that at all.
A Preference or Preferred Stock is where an investor buys a security that gives them the right to choose whether to get their money back or convert into common stock.
In a typical term sheet, the investor will specify an option pool — a bucket of stock options for future employees. Having an agreed on pool makes life easier for everyone — you don’t have to get shareholder consent every time you want to make a new hire and the VC doesn’t see their ownership get diluted by every hire either.