When you are starting a company, figuring who owns what and how to structure the equity fairly is not something you may be thinking about in the early days but is a very important part of the planning process. Danny Robinson has been through many startups, raised more than 100M in venture capital financing and definitely knows how to structure captables from the get go. This talk wlll help you decide what the split between co-founders should be and explain: * how to structure that equity to make it fair for everyone in the case someone leaves the company early * how to maintain and record the split on a captable, and * how to budget for future stock or option grants to future employees, advisors and investors.

1. Co-Founders
and
CapTables
Danny Robinson - Bootup Garage - March 2nd, 2011

2. There’s a little Sheen in
every Entrepreneur

3. It’s all about...

4. It’s all about...

5. Co-Founders

6. Splitting up the pie
Idea
Expertise
Connections
Commitment
Responsibilities

7. Do it up front
the conversation doesn’t get easier

8. The Misconception of
50/50
Decisions are not that simple

9. Drag-Along, Tag-Along

10. Employment
IP Ownership, Compensation, Termination

11. Titles
CEO, CTO, CMO, CSO, Chair, Vice-Chair

12. Investment
Cash treated as convertible debt

13. Vest the shares
Precautions

14. Founder Vesting Schedule

15. Founder Vesting Schedule
• Can be different than employees

16. Founder Vesting Schedule
• Can be different than employees
• Single class of voting common shares

17. Founder Vesting Schedule
• Can be different than employees
• Single class of voting common shares
• Vests in equal monthly instalments over the
course of 3 years. (ie 1/36th per month)

18. Founder Vesting Schedule
• Can be different than employees
• Single class of voting common shares
• Vests in equal monthly instalments over the
course of 3 years. (ie 1/36th per month)
• but...any schedule is possible

19. Other vesting options

20. Other vesting options
• Cliff vesting upon some period of time (usually
you can get away without doing this)

21. Other vesting options
• Cliff vesting upon some period of time (usually
you can get away without doing this)
• Single trigger
• Accelerate 100% of unvested shares upon a
change of control

22. Other vesting options
• Cliff vesting upon some period of time (usually
you can get away without doing this)
• Single trigger
• Accelerate 100% of unvested shares upon a
change of control
• Double trigger
• Accelerate 100% of unvested upon
termination after a change of control

23. Captables
!"#$"%&'
(")*+,-.,/0--
?9A')E+@#,K@&O$@:A
!"#$%&'( )$*&(+,&$+ -./'&( !"#$%&'( 0'&1-&'2&(13 0"(+1-&'2&(13
(")1 ,,/.200.000 345 205 /65
789")8: ,,-.200.000 4;5 405 -35
4"+/51!"#$%&'( 11678887888 988: ;8: 6<:
7<#&:='',>$:*1,?#$@:A,B&"A ,,-.000.000 /05 /05
4"+/51!"#$%&'(1=1>-?0 11@78887888 988: @6:
-&'2&(1310'&A&''&% C,,/.200.000 #)' C,,,,,,,,,, 0D20 #'),E+")'
FAG'&E,H!:AI')E@:A,:J,K'%$L C,,,,,
200.000 ,,-./20.000 MN@A*&O8'E,/05,8@E*:OA$ -P5
Q:AG>+:$ C,-.200.000 ,,4.000.000 4/5
4"+/51-&'2&(1310'&A&''&% Founders 1167B@87888 6C:

24. Captables
!"#$"%&'
(")*+,-.,/0--
?9A')E+@#,K@&O$@:A
!"#$%&'( )$*&(+,&$+ -./'&( !"#$%&'( 0'&1-&'2&(13 0"(+1-&'2&(13
(")1 ,,/.200.000 345 205 /65
789")8: ,,-.200.000 4;5 405 -35
4"+/51!"#$%&'( 11678887888 988: ;8: 6<:
7<#&:='',>$:*1,?#$@:A,B&"A ,,-.000.000 /05 /05
4"+/51!"#$%&'(1=1>-?0 11@78887888 988: @6:
-&'2&(1310'&A&''&% C,,/.200.000 #)' C,,,,,,,,,, 0D20 #'),E+")'
FAG'&E,H!:AI')E@:A,:J,K'%$L C,,,,,
200.000 ,,-./20.000 MN@A*&O8'E,/05,8@E*:OA$ -P5
Q:AG>+:$ C,-.200.000 ,,4.000.000 4/5
4"+/51-&'2&(1310'&A&''&% 1167B@87888 6C:
Employee Stock Option Plan
!#55D1E25#+&%1?#+(+/$%2$F 11G7B@87888 988:

25. Captables
!"#$"%&'
(")*+,-.,/0--
?9A')E+@#,K@&O$@:A
!"#$%&'( )$*&(+,&$+ -./'&( !"#$%&'( 0'&1-&'2&(13 0"(+1-&'2&(13
(")1 ,,/.200.000 345 205 /65
789")8: ,,-.200.000 4;5 405 -35
4"+/51!"#$%&'( 11678887888 988: ;8: 6<:
7<#&:='',>$:*1,?#$@:A,B&"A ,,-.000.000 /05 /05
4"+/51!"#$%&'(1=1>-?0 11@78887888 988: @6:
-&'2&(1310'&A&''&% C,,/.200.000 #)' C,,,,,,,,,, 0D20 #'),E+")'
FAG'&E,H!:AI')E@:A,:J,K'%$L C,,,,,
200.000 ,,-./20.000 MN@A*&O8'E,/05,8@E*:OA$ -P5
Q:AG>+:$ C,-.200.000 ,,4.000.000 4/5
4"+/51-&'2&(1310'&A&''&% 1167B@87888 6C:
Angel Round - Convertible Debt
!#55D1E25#+&%1?#+(+/$%2$F 11G7B@87888 988:

26. Captables
!"#$"%&'
(")*+,-.,/0--
?9A')E+@#,K@&O$@:A
!"#$%&'( )$*&(+,&$+ -./'&( !"#$%&'( 0'&1-&'2&(13 0"(+1-&'2&(13
(")1 ,,/.200.000 345 205 /65
789")8: ,,-.200.000 4;5 405 -35
4"+/51!"#$%&'( 11678887888 988: ;8: 6<:
7<#&:='',>$:*1,?#$@:A,B&"A ,,-.000.000 /05 /05
4"+/51!"#$%&'(1=1>-?0 11@78887888 988: @6:
-&'2&(1310'&A&''&% C,,/.200.000 #)' C,,,,,,,,,, 0D20 #'),E+")'
FAG'&E,H!:AI')E@:A,:J,K'%$L C,,,,,
200.000 ,,-./20.000 MN@A*&O8'E,/05,8@E*:OA$ -P5
Q:AG>+:$ C,-.200.000 ,,4.000.000 4/5
4"+/51-&'2&(1310'&A&''&% 1167B@87888 6C:
!#55D1E25#+&%1?#+(+/$%2$F 11G7B@87888 988:
VC - $2M Series A

27. Live Case Study?