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14 results for “founder dilution”
Concept4 mentions across episodes
dilution
...founders and the impact on future fundability for these startups?
23:56 / 25:25
from transcript23:56 – 25:25
...is dilution, specifically in terms of the instruments you use in the earliest races. Right? So friends and family precede, seed less so, but there's safes, there's convertible rounds, there's multiple rounds, there's multiple safes within a round, yo
24:42 / 25:48
from transcript24:42 – 25:48
and so they have obviously more equity since when you join a start up, you really are obviously, you you you have a salary. But, typically, it's because you it it's because in terms of where your income is gonna get, it is gonna really be meaningful.
27:34 / 29:03
from transcript27:34 – 29:03
...I love it. Founders giving away too much equity too early on because they don't really understand what are sort of market standard dilution percentages. And and also they don't really understand where they themselves need to maintain a percentage sha
10:25 / 11:35
from transcript10:25 – 11:35
series b to throw a stupid number out there, but they should have raised a much smaller one, we're gonna have to eliminate that liquidation preference. Right? And and then they're gonna have too much stock, and we're gonna have to offset that by dram
26:48 / 28:09
from transcript26:48 – 28:09
And ultimately we're on this journey of taking equity, this complex legal jargon and building a visual language that is fun and easy to use and and much more value comes out of it. That also builds more trust when you actually understand it. It creat
54:38 / 55:46
from transcript54:38 – 55:46
...a early stage founder, you're gonna lose probably 50 to 75% of your equity value due to dilution alone. You may lose 10 to 80% of your upside by the preference stack. These are, like, weird economic things that people don't really understand until th
24:08 / 26:10
from transcript24:08 – 26:10
“Why 25% founder dilution is the red flag that kills deals”
that's healthy. Beyond that but and obviously, less is even better, but 25% to me is kinda like the cutoff. After that, I started thinking about, like, why why is it so diluted? Yeah. No. I mean, I w
20:54 / 21:33
tactical advice20:54 – 21:33
...dilution. We think about time. And we love the alignment of coming in very early and hopefully being economically aligned with the founder. And then it's the exact same strategy, exact same thinking as we'll dilute alongside the founder. By the way,
1:08:13 / 1:09:38
from transcript1:08:13 – 1:09:38
...founders do that, for two reasons. One, they don't kind of they maybe have found that from a lawyer or something, and they didn't get a lot of good advice. And the second is they don't really realize that your ESOP will be a part of the conversation
42:44 / 43:45
from transcript42:44 – 43:45
...on dilution? Founders would say, god, if you've got two prior fundraisers of cash, you're not optimizing for dilution. That's inefficient. I could not care less for a couple of reason. I would say I'm not being doing this money for money, first of al
35:58 / 37:03
from transcript35:58 – 37:03
So can can you guys make sharing equity or giving equity to employees just more common, full stop? That's the long term vision. I think every employee in every company should have ownership, should have a portfolio of the companies that they go throu
55:30 / 56:32
from transcript55:30 – 56:32
...there are founders who are listening. I think it's it's Carta, which is a really great online equity management platform, and they publish reports with sort of, like, snapshots of all of the kind of users across their platform, obviously, on an anony
14:13 / 15:25
from transcript14:13 – 15:25
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