A belated holiday gift was given to all California option grantees from the California Franchise Tax Board. If you remember from our previous series on 409A, if you screw up, the option holder gets hit with a 20% federal excise tax. Not to be outdone, it appears that California is also tacking on a 20% […]
Author: Jason Mendelson
From time to time people ask us where to find a good dictionary to explain some / all of the terms that we use on this blog. While not perfect, after some research, we recommend this dictionary.
Question: I’ve always been curious, what are standard GP terms for venture funds? What carry percentages are there? How much do GPs actually put into funds? Our Take: There is a range, but in terms of general economic terms: – Management Fees: 1-3% of capital commitment. Smaller funds usually have a higher percentage. The norm […]
Question: A founder who plans to take several rounds of dilution (Seed, Series A, etc.) and to have a decent sized employee option pool has to plan carefully if he/she also wants to retain control. But equity and control are not the same thing. They can be separated by issuing non-voting shares to employees and […]
Question: Our company is trying to close series A funding of approx. $1M by April 30. VC’s we have spoken to say the amount is too small and to contact them at B/Mezzanine stage? What does this mean? Are there options for us? Our Take: The reason you are having trouble raising that amount of […]
All, we’ve been tremendously happy with the response to our new site. Thanks to everyone who has asked questions, told their friends and linked to us. We’ve seen multiple questions regarding two issues: compensation and angel deals. On the compensation side, people are wondering how ownership is spread out between founders and executives, how much […]