Venture Hacks

“I assumed my lawyers would have my back on this. I was wrong.”
– Anonymous Entrepreneur
Summary: A cap table shows you who owns what in your company. It calculates how the option pool shuffle and seed debt lower your Series A share price. This article includes a spreadsheet you can use to build your very [...]

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Summary: Convertible debt is often the best choice for a seed round. It is convenient, cheap, and quick. It lets you close the financing quickly and turn your focus back to your customers—that’s good for the company and its investors.
When your business is very young, raising a seed financing ($50K-$500K) via convertible debt is a [...]

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We love the quality of the comments on Venture Hacks. You’re missing out if you’re not reading them.
A lot of the comments contain great anecdotes from founders. Others contain good questions which we make sure to answer.
Here’s a few recent ones that are especially good. You can also subscribe to our comments RSS [...]

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Summary: Focus on your share price and the number of shares you own — metrics like valuation and percent ownership can fool you.
If valuation is your only pespective on a company’s capital structure, you can get fooled by games like the option pool shuffle which make your valuation seem large but actually depress your share [...]

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“Follow the money card!”
– The Inside Man, Three-Card Shuffle
Summary: Don’t let your investors determine the size of the option pool for you. Use a hiring plan to justify a small option pool, increase your share price, and increase your effective valuation.
If you don’t keep your eyes on the option pool while you’re negotiating valuation, your [...]

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