Pricing Employee Options

A startup I advise on occasion just repriced employee options 50% higher, while pricing preferred shares lower. On the face of it, it seems skewed, but when you really look at it, it’s very skewed. Here’s why. Let’s say employee options are priced at .15 cents, and preferred is at .40 cents.  We’ll say there…More

New Startup: Sizing & Funding It

I’ve been working in stealth mode for the past two and a half months on new software that I hope will really help people. The closed beta starts sometime next week. I’ll announce the software here and hope you’ll give it  a try. A question I’ve been pondering is something familiar to founders: should I…More

Raising Capital: Liquidation Preferences

One of the “standard” terms in VC term sheets is the liquidation preference. Google it, learn it, love to hate it and learn to live with it, because it’s unlikely you’ll get a deal without it. I call it the “have-your-cake-and-eat-it-too clause for VCs”. Here’s how it works (or, How 20% becomes 28% without even…More