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1,434
1

When should you expand the option pool — at each round or only when hiring?

Top answer:

Venture capital funds generally only involve themselves to ensure that after a priced round in which they are participating (or leading for that matter), there is a large enough option pool (aka stock plan, aka equity incentive plan, and...

1

how do you calculate valuation cap for SAFE

Top answer:

The Post-Money Valuation Cap SAFE from YC Template (this is the standard SAFE document template) the valuation cap is explicit. Other versions of the SAFE are discount, where valuation is the priced round minus the agreed discount, or MF...

1

What is the optimal ownership percentage for founders post-Series A?

Top answer:

At least 25% with target 25-40% of the company, with the lower end being more common for high-valuation rounds or when there’s significant dilution from earlier funding (e.g., seed rounds). This exemplifies the need for capital journey p...

1

How do I build a pitch deck for a venture capital fund?

Top answer:

Here are some instructions to build a world-class pitch deck for a venture capital fund. To start, if you have a bad Thesis, you will have a bad presentation. Start by refining your Thesis until 1 in 5 people that you pitch your Thesis t...

3

How do I convert preferred shares into common shares in a SAFE or convertible note? What is the typical conversion ratio used?

Top answer:

Conversions of convertible instruments and how fully diluted shares are counted are separate concepts.  SAFEs and Convertible Notes generally are almost never converted into common shares during a priced round. If this is being contemp...

1

How does the system handle capital call calculations when previous commitments have already been fully called? Does it automatically prevent additional calls, or is there a way to override this for specific investors?

Top answer:

All LPs must be on the same capital call schedule. If they are not, that poses major fiduciary and ethics related challenges. In the event that an LP pre-funds their entire position, their money would get accepted into an escrow bank acc...

1

Does Decile Hub provide an automatic valuation adjustment based on external market data, or do all updates require manual input from the fund manager?

Top answer:

No it does not. Each VC fund adopts a valuation policy and the hub accounting system reflects markups and markdowns based on this document. The vast majority of VC valuation policies markup an investment if there is a new priced round of...