Founders often query how large their cap table should be. How many investors is too many? And what factors will influence this?
Capital raising is one of the most challenging and vital aspects of successful entrepreneurship. Most founders, especially first-time founders, have only limited financial and legal experience to navigate the process. Therefore, a fair bit of risk exists.
If you’re an early stage start-up looking to start capital raising, it is an exciting time. You have that rapid growth in sight, and you just need those juicy funds to help you to take the next leap. However, the capital raising process can be a tricky one, especially if you’ve never done it before.
Studies show that companies and businesses of many kinds often have a slow start to business during January. And then in February, it’s pretty much go time. So we’ve got till February, you say? Hold up now. This doesn’t mean it’s time to kick back, and it also doesn’t mean you should quadruple your ad spend to try and make up for standard fluctuations.
When you want to grant equity (or ownership) to an employee or contractor, the best way to do it is often through an employee share scheme (ESS) or an employee share ownership plan (ESOP). But what is the difference between an ESOP and an ESS? And why would you use an ESOP instead of an ESS?
Sharing our journey on angel investing might help others to get involved, and have a better outcome. We're fortunate to know great investors and be part of the Airtree Explorer program so hopefully it's worthwhile for you to read it!!
If you are looking to embark on a new business venture, one of the first decisions you will need to make is how to structure your company. This is the first of many strategic decisions you will need to make.
Employee share plans, including employee share option plans (ESOPs) can be one of the best ways to incentivise and reward your team.
The Shareholders Agreement is the document that sets out the ongoing relationship between the Company and its Shareholders. Generally, a Shareholders Agreement will sit alongside the company Constitution, and will often prevail where there are any inconsistency.
If you have talented people on your team, now is an important time to make sure they will stick around. While it is true that there may be a lot of applicants for jobs in a recession, it doesn’t mean that it will be easy to replace talent.
Just when you thought you were on-top of every startup acronym around, another one pops up in casual conversation – “ESIC Incentives“. On hearing this pesky new acronym, you will probably take the usual approach, familiar to many founders – nod and smile. However, if you’re a startup looking to raise money, this is probably one acronym worth learning more about.
How do you prepare for a capital raise? What documents do you need? And how long will a capital raise take?
When you hear the term “investor update”, what comes to mind? Numbers and dollar figures? Financial models and forecasts? Standard comments on the state of the economy? While it’s important for companies to share this information with its shareholders (and just as important that the shareholders read it), it doesn’t mean it will always be a great experience.
If you’re looking to issue shares or options to your employees through an Employee Share Option Plan (ESOP), it is worth considering whether you can do so under the ‘Start-up Tax Concession‘ (Concession).
If you think about startup finance, you’re probably thinking about selling equity, VCs, angels, convertible notes, friends and family, series A, B, and beyond. A more distant thought could creep in, maybe to access some form of a bank loan or even venture debt once you get the ball rolling. What many founders don’t realise is that the money they’ve already invested in product development can be leveraged to finance their future as well.
What does Vesting mean, what is a Vesting Period and when will my Options become Shares? Whether you’re a company setting up an employee share scheme (ESS), or an employee reviewing your ESS Offer, you are not alone if the terms confuse you. You’re being offered a right, without any payment, to buy something, to get more rights, right?
SAFE stands for ‘ Simple Agreement for Future Equity‘. For us, anything that has ‘simple’ as part of its acronym has basically won us over already. At Cake, it’s all about simple and fast. The SAFE Note was first created by Y Combinator in 2013. In short, it is pretty much the same as a Convertible Note, but without the ‘debt’ element.
In short, a Convertible Note is a way to raise through a mixture of debt (a loan) and equity (giving away shares).
Here at Cake, we’ve been adjusting to the new norm of full time work-from-home (WFH) life.
We know that many businesses are hurting, and funding is a tough subject right now. But some businesses can use their equity to help them survive and thrive. In these isolated times, learn how you can run a virtual raise, and how simplifying your raise legals can save you months of negotiating and closing your funding round, and also how your employee share scheme can be a big help.
The economic conditions have hit some businesses much harder than others – and many companies are hurting.
Businesses worldwide have been forced to change that meeting from ‘room T36’ to, well, your living room, The ‘virtual’ meeting, remote working, and laptops on the lap, have become the new norm.
An Employee Share Option Plan (ESOP) is a method of granting equity in a business to an employee over a period of time. It really is as simple as it sounds – the employee receives options (or rights) to be granted real shares in the business, as long as they comply with the rules of the ESOP (Plan Rules).
You may have seen recent Employee Share Scheme (ESS) chatter in the business press, such as this article in the Australian Financial Review, discussing the upcoming government inquiry into the tax treatment of the schemes.
So you’ve started a business, and it’s starting to gain some traction. Customers are raving, client lists are building and your product is, well, actually working pretty well! These are all good things, and things that you should be very proud of. However, from here, the next step can be a crucial decision for the future of your business.