Capital Chaos was created by Steven Yevoli who for the past 15 years has helped or been a part of several different fund raising events for both existing companies and startups. Whether it was angel round financing, taking a company public, reverse public offering or secondary/later rounds, Steven has seen a lot of the good, the bad and the ugly.
This blog was designed to give other companies an insight into both current fundraising events and also a perspective for those seeking funding. It will hopefully allow others to avoid some of the pitfalls others have encountered and also provide a valuable resource for legitimate investment banking news and resources.
Enjoy!
3 responses so far ↓
1 Peter Vanguard // Feb 1, 2008 at 9:23 am
Hello -
Looking for some advice. I have a disagreement with my board. I am CEO of a start-up. There have been several million invested and we are seeking 20 mil now. We have little revenue but expect to ramp quickly. We have 14 employees. I am seeking a base salary of $375k post funding plus bonus and a little less for my CFO (I own 15% of the common stock and have options for another 6%). I say that this a reasonable base. My board says that investors will shy away as this is too much in a pre-revenue start-up. I say we are worth it. Any comments?
2 Steven // Feb 1, 2008 at 9:46 am
Peter,
While I am supportive of an entrepreneur earning a decent base, you must also marry that against the threshold of an investor. I presume that some of your board members are investors…if that is the case and they are giving you resistance, my advice is to listen to them.
There are a few elements you must consider:
- You want have a very positive and supportive relationship with your board as it is one of the more critical relationships you need as you grow.
- One of the main purposes of a board is guidance if you dont respect their guidance, you have the wrong board members (that doesnt mean you want a board of “yes” people. On the contrary - you want a board of seasoned people who have seen business from both sides - raising money and investing money).
- While I can appreciate that you are looking for a salary that supports your lifestyle, as a start-up I would seek to prove my value and then ask for the larger salary. You are not going to get wealthy on a big salary but will with performance based bonus/stock that measures how much value you can drive back to your investors.
- Investors in start-ups these days are seeking two things primarily:
As the founder, you have put some of your own capital into the company and arent just looking for a big salary and that you want to be paid on performance.
I should also point out that there are many public company CEO’s not making a base salary of $375k these days and their exposure is a lot greater than that of a start-up CEO.
At the end of the day, if you believe in your board, heed their guidance and test the waters. You can always ask for more once you have received the funding and have proven some success. The goal is to raise money for the company and that is paramount so nothing should distract from that goal.
3 Peter R.W. Vanguard // Feb 2, 2008 at 2:01 pm
Thanks for you thoughtful answer.
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