Dilution Questions


2 Votes
1 Answers
990 Views
Founders: how to prevent getting fired by the board after raising a few rounds of financing (with dilution of your ownership)?

Once you raise a few rounds of capital, your equity ownership most likely gets diluted to a minority stake. There is nothing that stops the board from firing the founder at this point. How do you...

asked May 27 '14 at 23:13
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Joshua Propp
11 points

0 Votes
1 Answers
548 Views
What could have Aaron Levie done better to own larger stake in Box? He's down to 6%.

At a $2B valuation, Aaron would be worth $80M with his 6% equity in Box.While not a small feat by any means, it's lower than other founders who have built business of similar scale.What are some...

asked Apr 1 '14 at 10:12
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Christian Lytle
1 point

2 Votes
1 Answers
403 Views
Investor is concerned with Dilution. Would a LOC help us with the future?

We are in our first round of startup fundraising. We need $50,000 for business growth and we currently have one investor who is interested in investing $25,000 for 5%. He is concerned with his 5%...

asked Nov 5 '13 at 08:36
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Ramsey B.
11 points

0 Votes
1 Answers
927 Views
pre money startup equity for founding partner who now will become a silent partner

my business partner and i recently decided to terminate our partnership. primarily my decision, but he reluctantly has agreed. we have one concept (a web consumer service/app) that we spent 6...

asked Jul 3 '13 at 23:53
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User732013
1 point

0 Votes
1 Answers
653 Views
When one of three founders add a capital round alone, how should he be compensated? Note or Equity

We have a startup with 3 co-founders each having 33.3% of the company. So far we have raised 100k internally and split it 3 ways. Now we wanted to raise another 100k round internally. If one...

asked Aug 17 '12 at 00:18
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Calman5555
1 point

2 Votes
3 Answers
611 Views
Unilateral equity investment by a founder

I am one of three founders (all part time) of a software start up which is still in early stages. Considerable effort has been logged even though no formal arrangements have been made. We have...

asked Aug 20 '12 at 06:49
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Mr. Anderson
13 points

0 Votes
2 Answers
1.31K Views
Founder Anti-Dilution Clause

We are 3 founding partners in an early stage start up. We are all good friends, and just started to negotiate an equity agreement. Our goal is to be fair, but also be fundable, as we will be...

asked Jul 11 '12 at 08:56
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Derek
164 points

9 Votes
1 Answers
1.26K Views
Fired from startup, vested equity

I was recently terminated from a startup without cause, where I was one of several founders owning a decent percentage of stock. We also had an angel investor (incubator) in with us for a small...

asked Jul 13 '12 at 16:31
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Startup Monster
48 points

0 Votes
1 Answers
638 Views
dilution of stock options for a company going through multiple rounds of funding?

How can I have an idea of the dilution of employee stock options for a company that is going through different rounds of funding? For example, a company that has received a total of $100M funding...

asked May 7 '12 at 22:02
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6152142613526
68 points

2 Votes
1 Answers
443 Views
Non-Dilutable Stock for patent purchase

I currently hold a patent and I'm looking to possibly sell it to a company for 5% stake. I have interested investors in the idea, but need to move the patent into their company. The company's...

asked Apr 21 '12 at 10:01
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Eric
16 points

0 Votes
1 Answers
381 Views
What is the interpretation of "full protection" here?

Excerpt from a Venture Capital book: If an investor with a $100M fund has set aside $5M to invest in a particular company over its life, what proportion of the $5M should it invest in the first...

asked Apr 9 '12 at 00:44
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Ryan
162 points

1 Votes
1 Answers
1.09K Views
How can the co-founders equity (economic and control) be protected by being diluted in excess?

How can the co-founders that hold a minority of the shares be protected against: A dilution of his equity (economic and control) triggered by the shareholders that hold a majority of the...

asked Apr 2 '12 at 07:27
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Jj.
29 points

1 Votes
4 Answers
929 Views
Is there another way to dilute successful startup company stock that I've never heard of?

I am a founding investor in a 3 year old startup company and own about 2.5% of the company stock. I was initially involved as a consultant but I haven't been involved for the last 1.5 yrs. The...

asked Mar 10 '12 at 14:05
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Robert
9 points

2 Votes
2 Answers
5.4K Views
Non-diluting equity for founders on an early startup LLC

The CEO of a LLC early startup plans to assign non-dilutable equity to the founders. Each founder will take a small amount of equity, leaving a pool for future employees and investors. IMHO, what...

asked Feb 11 '12 at 02:38
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Anon User
62 points

1 Votes
3 Answers
2.41K Views
What happens to the angel's / A round investor's stake on subsequent rounds, in the Valley?

As far as I understand, when the next round happens, the startup emits new shares that are sold to new investors under newly negotiated valuation. Does this lead to the previous investor's shares...

asked Jan 7 '12 at 01:28
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Fedd
8 points

2 Votes
1 Answers
1.02K Views
Questions around vesting vis-a-vis dilution, leaving a company and being fired from a company

I am just curious about vesting as against 3 things - Dilution, a Co-founder leaving, a co-founder getting fired Please assume a 2-man team with the equity split among the founder & CEO (A)...

asked Nov 15 '11 at 00:23
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Rokstr Dli
36 points

5 Votes
2 Answers
831 Views
Diluting stock of a company

How would one go about Diluting stock in company and what are the most common situations where dilution occurs?

asked Sep 23 '11 at 02:25
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Mat Banik
325 points