🧰 Venture Tools #001

Tools for founders & investors

Carina Nebula as captured by NASA’s James Webb Space Telescope

Venture tools is the first edition of a more regular newsletter I’ll be publishing. To date my most popular newsletters are where I do less of the talking (completely understandable…), and include lists of tools or resources for Founders & Investors.

Venture Tools includes:

• Short insight from me

• Valuable tools, articles and resources for founders & investors

• Job Opportunities (both in startups and VC funds)

Please do reply to this first edition with any feedback or suggestions for what to include in #002.

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💡Insight - Early Employee Equity

A frequent question I get from founders: ‘how much equity should I be offering early stage employees?’

There is no simple answer. It depends on what stage you are at, the valuation of the company and how much value you think an individual can bring.

As a rule of thumb though at the very early stage you could expect to offer up to 1% per employee for key hires. You could break this limit for a really key hire (eg a CTO to add to a non-technical founding team). I would however recommend capping the total equity issued to early employees (the first 20) at 10%.

I would tend to think about your equity grants / options in $ value when deciding how much to give. As an example I have a portfolio company who just raised a large pre-seed at a $25m valuation, and I have another who just raised a pre-seed at a $5m valuation. Both have yet to hire anyone outside the founding team. If both companies were to issue options over 1% to a key hire, they’d be worth 5x as much at the more valuable company… which wouldn’t make sense if the hire has the same level of experience.

Equally important to how much equity you offer, is how you offer it. It’s important the potential hire understands the value of the equity. I would avoid making an offer in % terms. Make the offer in $ terms.

Balderton Capital have put together an excellent equity guide, you can find it here.

SeedLegals also have a good summary on equity for UK companies here.

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🛠️ Tools

1. 62 resources on employee equity - including information on employee equity schemes in the US, UK and Europe - created by the team at Balderton.

2. Fundraising Workshop - excellent presentation on how to prepare for and execute a fundraising process from Alex Iskold at 2048 Ventures.

3. How to pitch your startup to the press - from the team at sifted.

4. A database of 1,100 VC and Angel Investors - from the team at Ramp.

5. The Insider’s Guide to Data Rooms - What to Know Before you Raise (from Justine Moore at Future / a16z).

6. Thread from me on common feedback I give founders on their decks.

   Alex Macdonald @alexfmac

   Since I started angel investing I've seen more than 5,000 decks and helped founders raise more than $100m. Here's common feedback I give founders on their decks:

7. Thread from Samir Kaji on common themes of successful VCs.

   samir kaji @Samirkaji

   Common themes of successful VCs I've observed from meeting with 1000+ VC's 1/Playing the "game" they can win, and not getting moved into a game that plays into someone else's strengths 2/ Ok with being on an island (non-consensus) and being wrong cont/

8. 45 of the Best VC Bets of All Time and What We Can Learn From Them by CB Insights.

(if you have any tools you want to suggest for next week - DM me)

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🧑‍🚀 Jobs

Expect more listings here in future weeks, it’s not just going to be roles at my own company…

1. Senior Product Designer /// London /// Office Based - sequel (my new company). We’re creating something unique at the inter-section of professional sport and venture capital. Well compensated with generous equity. Message me for more details.

2. Head of Community /// San Francisco /// Remote or Office Based - Unshackled Ventures - a pre-seed fund for immigrant-founded startups. More info here.

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Thank you for reading the first edition. Feedback is always welcome. Have an awesome week 🤌