Question: I have seen two pre-funding startups that have had 1 of 2 and 2 of 3 of the original founders quit. Neither of these companies had founder buy-sell agreements. In the latter case, the 3 founders had split the company equally which means 66.7% of the ownership is now outside and passive. Fortunately, they […]
What on earth is 280G? What is a parachute payment? Question: My lawyer mumbled something about 280G and parachute payments. I thought this was only for big public companies and acquisitions? How does this affect VCs? Our Take: Jason spent some time this year co-authoring an article on this with Ed Zimmerman and Brian Silkovitz […]
(We got two questions that were similar) Question 1: Is it normal to have the founders to have Class A shares, angel investors to have Class B shares, and a Class C pool for employee options. Liquidation preferences have classes B and C funding concurrently, with class A funding last? Question 2: Is there any […]
What Do VC Titles Mean? Question: What is a “venture partner” and how do they compare to a “Partner” and / or “Managing Director?” And what exactly is a “Principal?” How are each compensated? Our Take: Titles have widely varied meanings in the VC world. Unlike most other professions, there aren’t hard “rules” about what […]
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