Angel Investing Lessons: The First Mover Disadvantage Part II

Guest post by Paul A. Jones of Michael Best & Friedrich LLP

In Part I of this short series, we looked at how the dynamics of A Round financing negotiations can work against earlier Angel investors. As much as A Round VCs might appreciate an Angel setting the table for them, their real concern is maximizing their own return. To the extent that means transferring some of a deal’s upside from earlier Angels (and other pre-A Round contributors) to themselves, well, c’est la guerre.  

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Angel Investing Lessons: The First Mover Disadvantage Part 1

Guest post by Paul A. Jones of Michael Best & Friedrich LLP

Despite the explosive growth of institutional venture capital in recent years, independent Angel investors remain vital components of the high risk/reward entrepreneurship ecosystem. Good Angels fill a role – hands on, value added capital in small amounts at the earliest, riskiest stage of the entrepreneurship cycle – that most of today’s larger venture funds, focused as so many of them are on deals (and entrepreneurs) that are ready for bigger chunks of capital sooner rather than later, just don’t have time for.

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Vesting Incentive Equity: Time vs. Milestone Vesting Schedules

Guest post by Paul Jones of Venture Best

One of the defining features of the Silicon Valley model of high-risk/reward startups is the allocation of incentive equity to pretty much every member of the startup’s team. Sharing the upside with the team is a great way to build esprit de corps, reduce cash compensation expense, and provide an incentive for employees to stick around as the startup grows.

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Super Voting Stock: What is it and how can I get it?

Guest post by Seth Gottlieb, Partner, Cooley LLP

Very often founders raise the concern about protecting against dilution.  Specifically, they are concerned that, as they grow their business and issue stock to investors, employees, and advisors, their shares, and therefore their voting power, will be diluted.  They want to know how they can protect themselves, and their company, from losing control.  Often, this conversation leads to “Super Voting Common Stock.”

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