Kevin Jurovich’s Post

Google’s first office in Menlo Park🌱 In 1998, Larry Page and Sergey Brin rented this 2,000 sq ft space after moving out of their basement. In the garage, they set up simple workstations and servers, where they, along with a few friends, worked on coding projects, surrounded by Diet Coke, exercise balls, and a folded-up ping-pong table. Within a year, they needed more space and moved out. However, this garage is symbolic of Google's humble beginnings. Most founders aren't afraid to start their dreams. They’re just embarrassed to be seen starting small. Everyone who is anyone once started small. #startups #entrepreneurship #tech ____ Enjoy this? Follow Kevin Jurovich for daily startup & VC insights and the occasional meme. ✌️

Why VCs Love Seeing an Option Pool Before They Invest💰 Take 5...let’s understand why! 1️⃣ 𝗙𝗶𝗿𝘀𝘁 𝗦𝗰𝗲𝗻𝗮𝗿𝗶𝗼: 𝗘𝘀𝘁𝗮𝗯𝗹𝗶𝘀𝗵𝗶𝗻𝗴 𝗮𝗻 𝗢𝗽𝘁𝗶𝗼𝗻 𝗣𝗼𝗼𝗹 𝗕𝗲𝗳𝗼𝗿𝗲 𝗩𝗖 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 Meet Founder A and Founder B, who launched a business together: - 𝗙𝗼𝘂𝗻𝗱𝗲𝗿 𝗔: 5,000,000 shares - 𝗙𝗼𝘂𝗻𝗱𝗲𝗿 𝗕: 5,000,000 shares - 𝗧𝗼𝘁𝗮𝗹: 10,000,000 shares The founders established a 15% option pool to attract and incentivize top talent. Option Pool Calculation: - New shares for Option Pool / (Number of New shares for Option Pool + Total Number of old shares) = 15% - New shares for Option Pool = (10M * 15%) / (1 - 15%) = 1,764,705 shares 𝗧𝗼𝘁𝗮𝗹 𝗦𝗵𝗮𝗿𝗲𝘀 𝗮𝗳𝘁𝗲𝗿 𝗢𝗽𝘁𝗶𝗼𝗻 𝗣𝗼𝗼𝗹: 10,000,000 + 1,764,705 = 11,764,705 shares Now, a VC firm has decided to invest $4 million in the company: - 𝗣𝗿𝗲-𝗺𝗼𝗻𝗲𝘆 𝗩𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻: $16 million - 𝗣𝗼𝘀𝘁-𝗺𝗼𝗻𝗲𝘆 𝗩𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻: $4M + $16M = $20M - 𝗗𝗶𝗹𝘂𝘁𝗶𝗼𝗻: $4 million / $ 20 million = 20% New shares to be issued for the VC firm: - New shares to be issued for VC Firm / (Number of New shares to be issued for VC Firm + Total number of shares after Option Pool) = 20% - Number of new shares to be issued for VC Firm = (11,764,705 * 20%) / (1 - 20%) = 2,941,176 shares 𝗧𝗼𝘁𝗮𝗹 𝗦𝗵𝗮𝗿𝗲𝘀 𝗮𝗳𝘁𝗲𝗿 𝗩𝗖 𝗥𝗼𝘂𝗻𝗱: 11,764,705 + 2,941,176 = 14,705,881 shares Final Ownership Structure: - 𝗙𝗼𝘂𝗻𝗱𝗲𝗿 𝗔: 5,000,000 / 14,705,881 = 34% - 𝗙𝗼𝘂𝗻𝗱𝗲𝗿 𝗕: 5,000,000 / 14,705,881 = 34% - 𝗢𝗽𝘁𝗶𝗼𝗻 𝗣𝗼𝗼𝗹: 1,764,705 / 14,705,881 = 12% - 𝗩𝗖 𝗙𝗶𝗿𝗺: 2,941,176 / 14,705,881 = 20% 2️⃣ 𝗦𝗲𝗰𝗼𝗻𝗱 𝗦𝗰𝗲𝗻𝗮𝗿𝗶𝗼: 𝗖𝗿𝗲𝗮𝘁𝗶𝗻𝗴 𝗮𝗻 𝗢𝗽𝘁𝗶𝗼𝗻 𝗣𝗼𝗼𝗹 𝗔𝗳𝘁𝗲𝗿 𝗩𝗖 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 Following the same initial share allocations and VC firm's desire for 20% ownership, here's what happens: - Number of new shares to be issued for VC Firm = (10,000,000 * 20%) / (1 - 20%) = 2,500,000 shares - Total Shares after VC Round: 10,000,000 + 2,500,000 = 12,500,000 shares Subsequently, the company decides to create a 15% option pool: Option Pool Calculation: - Number of new shares to be issued for Option Pool = (12,500,000 * 15%) / (1 - 15%) = 2,205,882 shares - Total Shares after Option Pool: 12,500,000 + 2,205,882 = 14,705,882 shares Final Ownership Structure: - 𝗙𝗼𝘂𝗻𝗱𝗲𝗿 𝗔: 5,000,000 / 14,705,881 = 34% - 𝗙𝗼𝘂𝗻𝗱𝗲𝗿 𝗕: 5,000,000 / 14,705,881 = 34% - 𝗢𝗽𝘁𝗶𝗼𝗻 𝗣𝗼𝗼𝗹: 2,205,882 / 14,705,881 = 15% - 𝗩𝗖 𝗙𝗶𝗿𝗺: 2,500,000 / 14,705,881 = 17% 𝗞𝗲𝘆 𝗗𝗶𝗳𝗳𝗲𝗿𝗲𝗻𝗰𝗲𝘀 💡 1) VC Firm's ownership: Decreases 20% to 17% 2) Founders' ownership: Remains unchanged 3) Option Pool: Increases from 12% to 15% This is why VC firms prefer an option pool before investing. A+ math illustration to explain this point by Fazlur Shah. He is a must-follow for founders out there. #startups #venturecapital ____ Enjoy this? Follow Kevin Jurovich for daily startup & VC insights and the occasional meme. ✌️

The Top 23 Seed-Stage Investors for 2024 💸 🎉 Forbes just revealed its ranking of the top seed investors for 2024. While being on a Forbes cover hasn't always been the best omen (think Elizabeth Holmes, Sam Bankman-Fried, and Changpeng Zhao), making their list is a different story. To qualify, investors must have portfolio companies that have either gone public, been acquired for at least $50 million or have private valuations exceeding $100 million. Here's the top 23 for 2024: 1) Pejman Nozad - Pear VC (Notable Deal: DoorDash) | Atherton 2) David Frankel - Founder Collective (Deal: SeatGeek) | Mass 3) Benjamin Sun - Primary Venture Partners (Coupang) | NY 4) Anna Fang - ZhenFund 真格基金 (RED) | Beijing, China 5) Benjamin Ling - Bling Capital (Deal: Veho) | Miami 6) Ann Miura-Ko - Floodgate (Deal: SmarterDX) | Menlo Park 7) Satya Patel - Homebrew (Deal: Chime) | Burlingame, Ca 8) Aneel Ranadive - Soma Capital(Deal: Deel) | Miami 9) Pawel Chudzinski - Point Nine (Deal: Docplanner) | Berlin 10) Ed Sim - boldstart ventures (Deal: Snyk) | Miami 11) Reshma Sohoni - Seedcamp (Deal: UiPath) | Miami 12) Semil Shah - Haystack (Deal: Figma) | Mill Valley, Ca 13) Gil Dibner - Angular Ventures (Deal: CruxOCM) | Tel Aviv 14) Salil Deshpande - Uncorrelated (Deal: Redis) | Palo Alto 15) Jesse Beyroutey - IA Ventures (Deal: Komodo) | New York 16) Chad Byers - Susa Ventures (Deal: Robinhood) | SF 17) Wei Guo- UpHonest Capital (Deal: Rippling) | Menlo Park 18) Larry Li- Amino Capital (Notable Deal: Chime) | Palo Alto 19) Gili Raanan - Cyberstarts ( Deal: Wiz) | Israel 20) Tim Connors - PivotNorth Capital (Deal: Zipline) | Nashville 21) Ross Fubini - XYZ Venture Capital (Deal: Anduril) | SF 22) Jesse Walden - Variant (Deal: Uniswap) | New York 23) Topher Conway - SV Angel (Deal: Rippling) | SF Congratulations to all the investors who made the list. If you're superstitious, perhaps it's better to be left off this one. 😉 #startups #venturecapital ____ Enjoy this? Follow Kevin Jurovich for daily startup & VC insights and the occasional meme. ✌️

How Billionaires Mic Check... 😂 Well played, Warren. Well played. #startups #entrepreneurship #careers ____ Enjoy this? Follow Kevin Jurovich for daily startup & VC insights and the occasional meme. ✌️

Which Universities Produce the Most Y Combinator Founders? 📊 They received over 27,000 applications and funded 260 companies. An acceptance rate under 1%. Here are insights from the latest YC Winter 2024 batch: 𝗧𝗼𝗽 𝟭𝟱 𝗔𝗹𝗺𝗮 𝗠𝗮𝘁𝗲𝗿𝘀: Stanford: 16 MIT: 15 UC Berkeley: 12 Harvard: 11 Toronto: 9 Cornell: 9 Georgia Tech: 8 Waterloo: 6 Duke: 6 *Pennsylvania: 6 Cambridge: 6 Brown: 5 *Wharton: 5 HEC Paris: 5 University of Illinois: 4 *𝘜𝘱𝘦𝘯𝘯 𝘢𝘯𝘥 𝘞𝘩𝘢𝘳𝘵𝘰𝘯 𝘧𝘰𝘭𝘬𝘴 𝘵𝘦𝘤𝘩𝘯𝘪𝘤𝘢𝘭𝘭𝘺 𝘤𝘰𝘶𝘭𝘥 𝘣𝘦 𝘤𝘰𝘮𝘣𝘪𝘯𝘦𝘥 𝘩𝘦𝘳𝘦 𝗩𝗲𝗿𝘁𝗶𝗰𝗮𝗹𝘀: 65% in B2B SaaS / Enterprise 11% in Consumer 10% in Healthcare 8% in Fintech 4% in Industrials 1% in Govtech 1% in Edtech 𝗗𝗲𝗺𝗼𝗴𝗿𝗮𝗽𝗵𝗶𝗰𝘀: Asian: 25% Black: 4% Hispanic: 2% Middle Eastern: 5% Multi-racial: 10% South Asian: 18% White: 36% Many of the companies in this batch are building around AI. It will be interesting to see if the AI trend continues when the Summer 2024 batch data is released. Not getting into YC doesn’t mean you’re not a great founder. Many of the best and most iconic companies never went through an accelerator. #startups #venturecapital #entrepreneurship ____ Enjoy this? Follow Kevin Jurovich for daily startup & VC insights and the occasional meme. ✌️

Dividing Equity Among Co-founders 📊 How much equity should each co-founder get? Most founding teams think they should divide it up equally but even equity splits are rarer than you think. The idea of a perfectly equal split might sound great, but in reality, it often falls short of addressing each founder's contributions. Let's break it down: 🤝 𝗧𝘄𝗼-𝗙𝗼𝘂𝗻𝗱𝗲𝗿 𝗧𝗲𝗮𝗺: Aiming for equal shares might seem like a logical starting point, but it's important to recognize that true equality is rarely achieved. The median split is 55% for Founder A and 45% for Founder B. 🤝 𝗧𝗵𝗿𝗲𝗲-𝗙𝗼𝘂𝗻𝗱𝗲𝗿 𝗧𝗲𝗮𝗺: In a trio of founders, the median split is Founder A with 47%, Founder B with 33%, and Founder C with 17%. 🤝 𝗙𝗼𝘂𝗿-𝗙𝗼𝘂𝗻𝗱𝗲𝗿 𝗧𝗲𝗮𝗺: Expanding the team to four members adds complexity to the equation. Here's the median distribution: Founder A at 40%, Founder B at 27%, Founder C at 18%, and Founder D at 10%. One thing I often see with first-time founders is them saying, "We make decisions together." In theory, that's great, but someone needs to make the final call as not all decisions will reach consensus. A key lesson I've learned is that a balanced equity split isn't about an even 50-50, but about honoring each founder's commitment and value. I divided equity equally in a previous venture, only to realize it didn't reflect differing contributions. This time, my co-founder and I discussed our inputs, agreed on a distribution that reflected our roles, and set a foundation for a successful partnership. Peter Walker is a must-follow for all startup data like this. Thanks for the infographic and ongoing data you share on the platform. #startups #venturecapital #entrepreneurship ____ Enjoy this? Follow Kevin Jurovich for daily startup & VC insights and the occasional meme. ✌️

Jack Ma’s Original Sales Pitch for Alibaba Group in 1999 🚀 In 1999, Jack Ma pitched Alibaba to 17 colleagues in his apartment, outlining how they would compete and win against the top companies in the US. Today's valuation? $174 billion. A few years before this, Jack applied for a job at KFC and was turned down. To all the founders out there: keep building. Good things take time. #startups #venturecapital #entrepreneurship ____ Enjoy this? Follow Kevin Jurovich for daily startup & VC insights and the occasional meme. ✌️

Due diligence always goes both ways. 📈 Two days ago, I received a connection request from a VC...Noa Khamallah. I get VC connections a lot. But the name of his firm, "Don’t Quit Ventures," caught my attention. It fired me up! So I accepted the connection request and sent him this DM: “Don’t Quit Ventures… has to be one of the more iconic venture firm names that I’ve come across 📈” An hour later, we got on a Zoom call, and the guy is a legend! We hit it off. He understands our business, and I love his energy. After the meeting, he requested that I send over our deck. Five minutes later, he sent me this DM: “Alright bro. U doing TikTok pro, better, more reliable with informational purpose. It's a tough space, hard to crack, yet deserves a shot. Happy to make an angel ticket to build the journey with u.” The guy moves fast, and I dig that about him, but here’s where the story gets better. Just because an investor wants to invest doesn’t mean you should let them. Due diligence goes both ways. I did some recon, found a portfolio company he invested in early, and reached out to the founder Helen Chen. Her response confirmed everything I needed to know. 💙 #startups #venturecapital #fundraising ____ Enjoy this? Follow Kevin Jurovich for daily startup & VC insights and the occasional meme. ✌️

🎉 Big news – this one’s personal for me! If you've enjoyed any of my posts, take a moment to like, comment, or share this one. Your support means the world to me and our team. Circles is NOW live on the iOS App Store! 🎉📲 With Circles, you can say goodbye to the guesswork of finding the perfect spot for a night out. Our app combines the best of TikTok and Yelp, allowing you to discover through video! As a video-first platform, Circles gives you real-time insights into bars and restaurants before you arrive. Finding the right place to meet up with your circle and have a great night is all about knowing the current vibe, and that's where we shine. No more hopping in an Uber / Lyft, only to be disappointed when you get there. 🎥 𝗧𝗿𝘆 𝘁𝗵𝗲 𝗔𝗽𝗽: https://apple.co/3zgW6x6 #startups #productlaunch