Following are Four steps in Planning and Distribution of Stocks in Startups.
(A) Forecast all the rounds of venture capital you will need up to the day you go IPO. You will need several rounds of financing, typically three in three years. It can be several more. Life science requires at least twice that number of rounds. The first two financing events are the Seed Round and Round A. The third is Round B. The naming is confusing, I agree. Just be clear and understand what each round is intended to accomplish. Each round needs the following information:
* Pre-company valuation in millions of dollars
* Cash to be raised this round
* Pre-company number of shares. This includes stock options.
* Ignore for now the difference between common and preferred shares.
How to prepare a good plan for granting stock options to employees in Startups.
26 Aug 2008 | Employee Option Grants