Articles tagged

Startup Equity

We cover many important questions about startup equity for founders, employees and investors, including: How many shares should a startup authorize at incorporation? How do common shares work? How should founders plan to allocate equity to employees out of the startup's employee stock option plan? What is the difference between options and restricted shares in employee equity compensation?

What is a down round in startup financing?

Find out what is a down round, why they happen, what its implications are for a startup, what are the anti-dilution provisions, and what are alternative routes you can take to avoid a down round.

Preferred Stock: Quick Guide For Startup Founders

Everything a startup founder needs to know about preferred stock in venture capital financings.

Greg Miaskiewiczby Greg Miaskiewicz • 7 min read

Pre-Incorporation Checklist: 6 Steps Before Startup Incorporation

We cover all the important steps founders should take before incorporating their startup: choosing business entity, state of incorporation, name, board of directors, splitting equity between founders & more.

Michał Kowalewskiby Michał Kowalewski • 10 min read
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Vesting Schedules: Best Practices for Startup Founders

Vesting schedules play an important part in keeping a startup together. They’re a designed as a motivator not only for employees, but also for founders. If you have them, it sends a signal to investors, that you’re in it for the long haul.

Greg Miaskiewiczby Greg Miaskiewicz • 7 min read

What percentage of stock should I reserve for preferred stock investors?

Learn about preferred stock and why you don't set aside preferred shares for investors when starting a company.

Stefan Nageyby Stefan Nagey • 12 min read

Pre-Money vs. Post-Money Valuation Explained

A beginner’s-level introduction to pre and post-money valuation tailored to startups incorporated in the United States.

Greg Miaskiewiczby Greg Miaskiewicz • 7 min read

Post-Incorporation Checklist: 9 Steps After You Incorporate Your Startup

We cover some of the important steps founders will need to take after incorporating their startup, like 83(b) elections, getting an EIN, opening a bank account & more.

Stefan Nageyby Stefan Nagey • 4 min read

The Ultimate Guide to Cap Tables for Startup Founders

Most founders have little clue about how cap tables work when they start their first startup. Keeping accurate records of your cap table is essential for startup founders if they plan on raising capital from VCs or selling the company.

Greg Miaskiewiczby Greg Miaskiewicz • 8 min read

What is a 409A Valuation? Startup Stock Valuation Explained

409A valuations are independent appraisals of a startup's common stock. Startups should use an independent, outside valuation firm to get a 409A valuation before offering stock options to employees to avoid fines and legal issues with the IRS.

Greg Miaskiewiczby Greg Miaskiewicz • 9 min read

How Startup Equity Works: Common and Preferred Share Classes

Startups typically issue common shares to founders, employees, advisors and consultants; they issue preferred shares to investors as part of venture financing rounds The preferred class of stock in a startup is typically subdivided into series, each representing a different round of financing, like Series A, Series B, and so on.

James Hottensenby James Hottensen • 3 min read

9 Common Legal Mistakes Made By Startups and How To Avoid Them

Avoid these common legal mistakes made by startups and save your company from dealing with fines and lawsuits. As a startup founder, keeping your company compliant is essential to protecting the value of your startup equity and reaping the rewards of your hard work.

Greg Miaskiewiczby Greg Miaskiewicz • 7 min read

C Corporation or LLC: Which is the best entity for your startup?

Startup investors strongly prefer to invest in C Corporations over LLCs for tax and diligence reasons. The proceeds from selling stock in startups registered as C Corporations can be tax exempt due to Qualified Small Business Stock exemption.

Stefan Nageyby Stefan Nagey • 5 min read

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