SlideShare a Scribd company logo
Getting investment ready
and getting funded
Founder agreements
Share vesting
Protecting your IP
Giving Equity To Your Team
Create new shares, don’t transfer your own, and
do it well before the first funding round
Sign agreements with appropriate vesting
Work out proportions you are happy with, based
on commitment, sweat to date, full/part time
Valuating the Company
A few methods:
- Decide how much you want to raise
- How much equity to give away
- Compare to similar companies
Vaidation
Equity is the most valuable asset you own
Lean principles apply to fundraising, the old
roadmap isn’t a good one
Build - Measure - Learn - Raise
Raising too early is a massive mistake
Valuation Do’s
Always talk about pre-money valuation
Prepare 2 versions of your pitch deck
Model equity dilution before talking to investors
Valuation Don’ts
Don’t mention raising amount, valuation and %
equity before modelling the exact figures
Post Funding
After a funding round, shares have a value
Giving equity to people then incurs tax liability
Enter the options pool, created as part of your funding round
For employees, you should set up an EMI scheme
How much equity for my advisor?
Default is zero, talk is cheap but execution is
expensive
Model it as regards to the funding round value,
don’t pick a random %
Again, if before first round, create new shares,
if not it’s an “unapproved option”
The Advisor Stats
General advisors mostly just get equity tech
advisors most likely to get cash too as well as
the most equity
Valuation less than £1.5m mean equity is 2.2%,
greater than is 1.6%, though skewed higher
Those that work more than two days a month
get double the equity
EMI Share Option Scheme
Options can be granted without any income tax or NI liabilities
Employee only pays income tax on exercise (normally on exit)
between excise price and market valuation at the time.
Founders get Entrepreneurs Relief (10% CGT)
7000+
Startups & investors use SeedLegals today
3500
Early stage founders
2500
Investors, funds & accelerators
“SeedLegals not only highlights best practices in
the industry, but also greatly reduces costs and
time to completion while increasing
communication for founders”
Carlos Eduardo Espinal, Partner at Seedcamp

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SeedLegals getting investment ready and valuing the company

  • 3. Giving Equity To Your Team Create new shares, don’t transfer your own, and do it well before the first funding round Sign agreements with appropriate vesting Work out proportions you are happy with, based on commitment, sweat to date, full/part time
  • 4. Valuating the Company A few methods: - Decide how much you want to raise - How much equity to give away - Compare to similar companies
  • 5. Vaidation Equity is the most valuable asset you own Lean principles apply to fundraising, the old roadmap isn’t a good one Build - Measure - Learn - Raise Raising too early is a massive mistake
  • 6. Valuation Do’s Always talk about pre-money valuation Prepare 2 versions of your pitch deck Model equity dilution before talking to investors
  • 7. Valuation Don’ts Don’t mention raising amount, valuation and % equity before modelling the exact figures
  • 8. Post Funding After a funding round, shares have a value Giving equity to people then incurs tax liability Enter the options pool, created as part of your funding round For employees, you should set up an EMI scheme
  • 9. How much equity for my advisor? Default is zero, talk is cheap but execution is expensive Model it as regards to the funding round value, don’t pick a random % Again, if before first round, create new shares, if not it’s an “unapproved option”
  • 10. The Advisor Stats General advisors mostly just get equity tech advisors most likely to get cash too as well as the most equity Valuation less than £1.5m mean equity is 2.2%, greater than is 1.6%, though skewed higher Those that work more than two days a month get double the equity
  • 11. EMI Share Option Scheme Options can be granted without any income tax or NI liabilities Employee only pays income tax on exercise (normally on exit) between excise price and market valuation at the time. Founders get Entrepreneurs Relief (10% CGT)
  • 12. 7000+ Startups & investors use SeedLegals today 3500 Early stage founders 2500 Investors, funds & accelerators
  • 13. “SeedLegals not only highlights best practices in the industry, but also greatly reduces costs and time to completion while increasing communication for founders” Carlos Eduardo Espinal, Partner at Seedcamp