Kevin Jurovich’s Post

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. ✌️

In 2006, Google bought YouTube for $1.65 billion. 💰 YouTube's co-founders, Chad Hurley and Steve Chen, the day they were acquired by Google. Today, YouTube generates $3 billion in revenue every 30 days and has over 2 billion monthly users. Beyond its financial success, YouTube has profoundly influenced global culture, continually introducing new features that maintain its relevance and growing in popularity. While Google has missed out on several acquisitions over the years, YouTube will always be a feather in its cap and one of the greatest startup acquisitions of all-time. #startups #entrepreneurship ____ Enjoy this? Follow Kevin Jurovich for daily startup & VC insights and the occasional meme. ✌️

Gonna tell my kids this was Jack Dorsey & Jensen Huang 📈 #startups #entrepreneurship ____ Enjoy this? Follow Kevin Jurovich for daily startup & VC insights and the occasional meme. ✌️

Mastering the SAFE note 💸 If you're an early-stage founder, get familiar with SAFEs. 89% of all the money raised in pre-seed rounds went through SAFEs instead of convertible notes in Q4 2023. SAFEs don't neatly fit into the debt or equity category, and they don't accrue interest. This will prepare founders to approach investors and secure funding through a SAFE Note: 𝗙𝗶𝘃𝗲 𝗗𝗶𝗳𝗳𝗲𝗿𝗲𝗻𝘁 𝗧𝘆𝗽𝗲𝘀 - Fixed Conversion at a future date - Valuation Cap, no discount - Discount, no valuation cap - Valuation Cap & Discount - MFN (Most Favored Nation) 𝗘𝘅𝗮𝗺𝗽𝗹𝗲: 𝗦𝗲𝗲𝗱 𝗥𝗼𝘂𝗻𝗱 📈 Investor invests $25,000 with a $5m Valuation Cap, 20% Discount. - Pre-money valuation of the company $10m - Number of Shares= 2m - Share Price= $10m/ 2m= $5 𝗢𝗽𝘁𝗶𝗼𝗻  1️⃣ (Discount) - Share Price after discount: $5 * (1 - 20%) = $4 - Total Number of Shares: $25,000 / $4 = 6,250 shares 𝗢𝗽𝘁𝗶𝗼𝗻  2️⃣ (Valuation Cap) - SAFE Investor choosing $5m valuation cap - Share Price= $5* ($5m Valuation Cap/ $10m pre-money valuation)= $2.50 - SAFE Investment= $25,000 - Total Number of Shares= $25,000/ $2.50= 10,000 - SAFE Investor will apply the Valuation Cap option; $2.50/ share. - Finally, the total number of Shares for SAFE Investor= 10,000 - Share Price at Seed $5 - Share Value of SAFE Investors= 10,000*$5= $50,000 - SAFE Investment= $25,000 - Unrealized Return= (($50,000- $25,000)/ $25,000)* 100%= 100% 𝗦𝗰𝗲𝗻𝗮𝗿𝗶𝗼 2️⃣ - VC Firm Invests at a Pre-Money Valuation = $6 Million - Total number of shares 2m - Share Price= $6 m/ 2m= $3 𝗢𝗽𝘁𝗶𝗼𝗻 1️⃣ (Discount) - SAFE Investor Choosing Shares at 20% Discount - Share Price= $3*(1-20%) = $2.4 - Total Number of Shares= $25000/ $2.4= 10,417 𝗢𝗽𝘁𝗶𝗼𝗻 2️⃣ (Valuation Cap) - SAFE Investor choosing $5m valuation cap - Share Price = $3* ($5 Million Val Cap/ $6 Million valuation) = $2.5 - Total Number of Shares= $25,000/ $2.5= 10,000 - SAFE Investor will apply the Discount; $2.4/ share. - Total number of Shares for SAFE Investor= 10,417 - Share Price at Seed = $3 - Share Value of SAFE Investors= 10,417*$3= $31,251 - SAFE Investment= $25,000 - Unrealized Return= (($31,251- $25,000)/ 25,000)*100%= 25% The higher the Valuation Cap in the SAFE round, the better it is for the Founder, resulting in a lower dilution of Equity provided the Founders are confident to close the next round at a higher than the valuation cap. 𝗠𝗙𝗡 𝗖𝗹𝗮𝘂𝘀𝗲 - Let’s say SAFE A has an MFN Provision. - If a new SAFE B is issued, the company has to tell SAFE A about it. - If the terms of SAFE B are better than SAFE A, SAFE A can ask for the same terms as SAFE B. Thanks to Fazlur Shah for the math illustration and share! Some top-tier follows on the topic: - Chris Harvey, a fund lawyer who regularly drops pearls of wisdom - Peter Walker, who shares data on SAFEs and broader startup insights #startups #fundrasing #venturecapital ____ Enjoy this? Follow Kevin Jurovich for daily startup & VC insights and the occasional meme. ✌️

24 Y Combinator Startups Now Hiring 📈 Joining a startup that is already a rocket ship is never a bad idea. These companies are all growing fast and have raised their Series A funding from some of the top VCs in the valley. 1) Forage - Mission-Driven Payments 2) FlutterFlow - Application Development Platform 3) WeWeb - No Code App Builder 4) Cinder - Safety Ops Platform 5) Navattic - No Code Interavtive Demos 6) Secoda - AI Powered Data Search 7) Freshpaint - HIPAA Compliance 8) PermitFlow - Construction App Management 9) Keeper - Smart Tax Filing 10) CoLab Software - Design Review Collab Tool 11) SpruceID - User Data & Identity 12) doola - LLC Formation 13) Emi Labs - Talent Aquisition Tool 14) Turing Labs Inc. - Product Development Tool 15) Triomics - AI Health Records 16) Nourish - Telehealth & Dietitian 17) PROVEN Skincare - AI Skincare 18) Fair Square - Senior Health Insurance 19) QuestDB - Open Source Database 20) Gigs - Telecom As-A-Service 21) Roboflow - Computer Vision Tool 22) Rootly - AI Incident Response 23) Slope - B2B Payments 24) R2 - Lending Platform Shoutout to Ben Lang for putting this gem together. If you are on the job hunt, he posts these lists often and is a top-tier follow. #startups #entrepreneurship #careers ____ Enjoy this? Follow Kevin Jurovich for daily startup & VC insights and the occasional meme. ✌️

In 2005, David Choe was offered $60,000 to graffiti a mural at Facebook's first office in Palo Alto. When the mural was finished, Facebook president Sean Parker gave Choe a choice. $60,000 in cash or stock options. Choe needed the money. At that time, Facebook was just a year old—an unknown platform with no revenue and no hype about a future $5 billion IPO. Instead of taking the cash, Choe gambled and took the options. His gamble paid off big. When Facebook went public at $38 a share in 2012, his stock options were worth $200 million. #venturecapital #startups #socialmedia _____ Enjoy this? Follow Kevin Jurovich for daily startup & VC insights and the occasional meme. ✌️

How VCs Determine Their Average Check Size 💰✨ We will use a hypothetical $100M fund targeting 20 investments. Let's hop into it. 𝟭.) 𝗙𝘂𝗻𝗱 𝗦���𝘇𝗲 𝗖𝗮𝗹𝗰𝘂𝗹𝗮𝘁𝗶𝗼𝗻 (𝗔): - Fund size = $100M 𝟮.) 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 𝗙𝗲𝗲𝘀 (𝗕): - Management fees = 2% * $100M = $2M/year over 10 years = $20M - Adjusted Fund Size (A - B) = $100M - $20M = $80M 𝟯.) 𝗜𝗻𝗶𝘁𝗶��𝗹 𝗮𝗻𝗱 𝗙𝗼𝗹𝗹𝗼𝘄-𝗢𝗻 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁𝘀: - Follow-On Investment (50% of Fund) = 50% * $100M = $50M - Remaining Net Amount for Initial Investment = Adjusted Fund Size - Follow-On Investment = $80M - $50M = $30M 𝟰.) 𝗔𝘃𝗲𝗿𝗮𝗴𝗲 𝗖𝗵𝗲𝗰𝗸 𝗦𝗶𝘇𝗲 𝗳𝗼𝗿 𝗜𝗻𝗶𝘁𝗶𝗮𝗹 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁: - Average Check Size = Remaining Net Amount / Number of Companies = $30M / 20 = $1.5M 𝟱.) 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰 𝗙𝗼𝗹𝗹𝗼𝘄-𝗢𝗻 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁: - VC wants to invest $2 in follow-on for every $1 in the initial investment - Total Follow-On Investment = 20 companies * $1.5M * 2 = $60M - Adjusted Follow-On Investment (limited by available funds) = $50M 𝟲.) 𝗔𝗱𝗷𝘂𝘀𝘁𝗲𝗱 𝗔𝘃𝗲𝗿𝗮𝗴𝗲 𝗖𝗵𝗲𝗰𝗸 𝗦𝗶𝘇𝗲 𝘄𝗶𝘁𝗵 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰 𝗙𝗼𝗹𝗹𝗼𝘄-𝗢𝗻: - Average Check Size = Adjusted Follow-On Investment / (Number of Companies * 2) = $50M / (20 * 2) = $1.25M Boom that's it! A͟ ͟c͟o͟u͟p͟l͟e͟ ͟o͟f͟ ͟o͟t͟h͟e͟r͟ ͟t͟a͟k͟e͟a͟w͟a͟y͟s͟:͟ - The follow on can be $40M (50% of adjusted Fund-size) - Follow-on capital typically wouldn't be reserved for all 20 companies - Fees typically step down after year five or so This is a solid starting point for understanding how VCs determine their average check size. 🤝 #venturecapital #fundraising #startups _____ Enjoy this? Follow Kevin Jurovich for daily startup & VC insights and the occasional meme. ✌️