Tag Archives: Start-up

Equity sharing in startups – a presentation

A few days ago, I had the opportunity to present a video conference on equity sharing in a startup, between founders, investors and employees. I’ve done it many times in the last few years like the one Slideshare here, but I had never recorded it. It’s now done:

As archive, the Slideshare presentation…

The other links

600 capitalisation tables: https://www.startup-book.com/2020/04/06/updated-data-in-equity-of-600-former-startups/

Universities and equity ownership in startups : https://www.startup-book.com/2013/11/05/how-much-equity-universities-take-in-start-ups-from-ip-licensing/

Startups and titles : https://www.startup-book.com/2019/12/11/titles-in-start-ups/

Penny Schiffer’s Tweet : https://twitter.com/PennySchiffer/status/718323492006076417

Slicing pie : https://slicingpie.com/

Pie calculator : https://www.andrew.cmu.edu/user/fd0n/35%20Founders%27%20Pie%20Calculator.htm

Two additional lists of references I just found thanks to Penny Schiffer: Useful resources for (present and future) investment analysts — Part 1 and Part 2

Whats’s a startup? (part 4)

I used today again Steve Blank’s marvellous definition of a startup that I had used last time in 2013 here.

You can listen to him giving it in Helsinki in 2011 at Aalto University

or through his Mooc here:

It’s obvious once you heard it and took so many years to be designed!

In these uncertain times of Coronavirus, I can only advise you to relax. One way for me was tonight through Recomposed by Max Richter – Vivaldi’s Four Seasons.

Stanford and Startups

Stanford is in the top2 universities with MIT for high-tech entrepreneurship. There is not much doubt about such statement. For the last ten years, I have been studying the impact of this university which has grown in the middle of Silicon Valley. After one book and a few research papers, here is a kind of concluding work.

A little less than 10 years ago, I discovered the Wellspring of Innovation, a website from Stanford University listing about 6’000 companies and founders. I used that list in addition from data I had obtained from OTL, the Stanford office of technology licensing as well as some personal data I had compiled over years. The report Startups and Stanford University with subtitle “an analysis of the entrepreneurial activity of the Stanford community over 50 years”, is the result of about 10 years of research. Of course, I did not work on it every day, but it has been a patient work which helped me analyze more than 5’000 start-ups and entrepreneurs. There is nearly not storytelling but a lot of tables and figures. I deliberately decided not to draw many conclusions as each reader might prefer one piece to another. The few people I contacted before publishing it here twitted about it with different reactions. For example:

Katharine Ku, head of OTL has mentioned another report when I mentioned mine to her: Stanford’s Univenture Secret Sauce – Embracing Risk, Ambiguity and Collaboration. Another evidence of the entrepreneurial culture of that unique place! I must thank Ms Ku here again for the data I could access thanks to her!

This report is not a real conclusion. There is still a lot to study about high-tech entrepreneurship around Stanford. With this data only. And with more recent one probably too. And I will conclude here with the last sentence of the report: “How will it develop in the future is obviously impossible to predict Therefore a revisited analysis of the situation in a decade or so should be very intersting.”

An analysis of EPFL’s Spin-offs and its Entrepreneurial Ecosystem

I usually do not mix my EPFL activity and my blog activity. This is one of the rare exceptions. At EPFL’s startup unit, we just published a short report describing EPFL spin-offs. Here is a short link. By the way you can also visit the pages about EPFL’s support to entrepreneurship.

The report gives data about value creation through fund raising and job creation and also about a known phenomenon, the importance of migrants for entrepreneurship. I am aware that value creation is a sensitive topic, all the more that in Europe venture capital has not proven a real correlation with value. It may even have destroyed more value than created any…

“How I survived the coolitude of startups” by Mathilde Ramadier

The start-up world is so fashionable that a few clouds should gather above it. The thing is not new. In the past, I mentioned Silicon Valley Fever. There was also the recent Disrupted – My Misadventure in the Start-Up Bubble by Dan Lyons But, more worrying, the criticisms are more numerous and more serious. For example, the article The evidence is piling up – Silicon Valley is being destroyed about the Juicero and Theranos scandals. Without forgetting the more fundamental transhumanist / apolitical fever

Here is a new book, fun and serious…In French: Bienvenue dans le nouveau monde Comment j’ai survécu à la coolitude des startups (Welcome in the new world – How I survived the coolitude of startups) by Mathilde Ramadier. Mockery uses language. The “novlangue”, the “coolitude”. But this hides more unacceptable behaviors. Discounted wages, ridiculous working conditions. All this in the tone of humor, or more of chilling irony. Excessive? A little bit in the sense that not all start-ups act as the author describes, but revealing a reality that should not be underestimated … Here are some examples:

“We’re a start-up, so please bring your own laptop.” [Page 24]

“During the end-of-test interview, my CEO tells me that instead of the 1500 euros agreed upon at the start, I will finally be hired with a payroll three times lower. [… He] knows very well what he does and delivers a perfectly honed speech to sweep away my disappointment. […] So I refused a job paid 500 euros because I lacked motivation, belief and ambition. I did not deserve to participate in the adventure.” [Page 26-7] The CEO had previously added that “if I want to make a career, I will have to accept to bend down and give everything. Just like in “the Voice’.”

“But doen’t disruption also mean an acceleration imposed too suddenly on society? […] The sharing economy allows the connection of a client who has a need and a service provider (let’s say a small hand that needs money.)” [Page 28] And then she quotes Bernard Stiegler. How right she is!

“But this tendency, pushed to the extreme, has become the watchword of a despotic regime which does not admit ‘the weakest’, that is to say the refractory, and which relegates them to the bottom of the social pyramid. Because if everyone can, in theory, become a superstar, there is little talk of those for whom “siliconization” does not embody a dream… nor a sinecure.” [Page 36]

“As Orwell has taught us, the manipulation of language is the starting point of any totalitarian discourse. […] The disappearance of the ability to think for oneself can even be the core competence of a company.” [Pages 41-2]

“In many cases, these are bullshit jobs, these new ‘jobs’ in the service sector that pride themselves abotu contributing to the rational organization of the company, but which cannot be described easily because even the first concerned fail to explain clearly what they do neither can they find a real utility. […] Wages were evidently free from all egalitarian considerations and remained confidential.” [Pages 44-5]

“I’ve seen people say ‘never again’ and had to start over again. They had promised that they would not step back behind the counter of a bar after their first internships and still return, for lack of finding a job in their branch. I have seen young women and young men becoming financially dependent on their partner, sublet their car or room to live in their living room (since all aspects of life are now marketable), and knocking at the door of their parents at thirty. Pregnant women put money aside because their maternity leave did not allow them to live decently. These are the people I saw accept a precarious contract with a ridiculous paycheck in a startup because they were promised many things, and offered ‘evolution prospects’ if they agreed to ‘give everything’.” [Page 70]

The author also has interesting definitions. “One of the definitions of start-up might be this: it is a young company with high potential but still not profitable. The objective, from the beginning, is therefore rapid growth.” (Page 94) Mathilde Ramadier even has her own glossary (pages 151-5), often funny… For example:
Disruption: super-powerful innovation that breaks the codes of a whole market. An earthquake, the disruption puts everything flat and does not generally worry about the consequences of the chaos it induces.
Entrepreneur: courageous person with rare talent, who has an idea of genius before everyone, is working to achieve it and succeeds – or not.
Innovation: introduction of a new product or process on the market. A startup is necessarily innovative (for those who launch it anyway).

“During these four years in the startups, I was trapped in an infernal loop, tossed from one absurdity to another, finding here and there the same folklore … Paradoxically, we push the rational to the irrational, originality to conformism, thirst for the new to regression […] The solutions that the startupsphere promises us – to the crisis, unemployment, boredom, repetition of the same and even disuse, old age and ugliness, etc. – are also a deception: one can not pretend to live in the new world before having truly built it.” [Page 143]

The Paris Innovation Review about Start-ups

Once again the Paris Innovation Review (formerly ParisTech Review) publishes a series of excellent articles, this time dedicated to start-ups. These are:
– Companies like others? A sociological survey of French startup. http://parisinnovationreview.com/2017/03/21/sociological-survey-french-startups/
– Startups Employees Perks & Incentives – 1 – Wages. http://parisinnovationreview.com/2017/03/23/startups-employees-perks-incentives-1-wages/
– Startups Employees Perks & Incentives – 2 – Equity. http://parisinnovationreview.com/2017/03/23/startups-employees-perks-incentives-2-equity/

The article about the sociology of start-ups shows (in fact confirms) interesting things. I will let you read and jump directly to some of their concluding points: “Some of these results can provide pause for thought for public policies aimed at fostering startup creations. The survival of these businesses seems relatively unpredictable, both for the people involved (entrepreneurs, employees, support bodies) and for analysts who observe them from the outside. We have interpreted this unpredictability as the result of two causes. The first is the selection operated by the support agencies, a selection that has largely guided ours, since a claim of technical innovation, which was our main criterion for inclusion in our survey, is generally associated with subsequent monitoring and aid by these agencies. One might think that a number of projects considered very unrealistic could have been excluded by these services, which in fact limits the variety of the companies we studied. The second, more fundamental cause is the very variety of factors that make or break businesses: outlets that emerge and disappear along with the flow of global economic changes, strategies of major industrial groups and initiatives by competitors, internal conflicts, resources which become abundant or scarce depending on the context, financial problems which are difficult to anticipate, etc. This may encourage governments and public agencies to foster a much greater number of projects and not merely be satisfied with those that they consider to be the most promising. Watering a whole field is often more efficient than dumping all the available water on but a few square meters… Securing solid support by authorities, companies that are deemed innovative are doing better than the others if one considers their survival rate. Perhaps it would not be absurd to offer an equivalent support to businesses in other economic circles.”

The incentive topic is one I have covered at length as you may see with my Slideshare link below. On the salary side, I fully agree with their claim: Be as objective as possible: this ensures fairness and acknowledges a basic truth: people talk. On the equity side, know the rules of vesting and cliffs, and build a granting mechanism based on experience of employees and layers of early and late comers, i.e. the same number of stock options could be granted per year (so more shares to early employees as there are more employees per year when the company grows. If it does not, stock options are probably worthless…)

Research Exploitation according to Jacques Lewiner

The excellent Paris Innovation Review (formerly known as the ParisTech review) just published an interview of Jacques Lewiner (for the ones not knowing him, you may want to have a look at Jacques Lewiner about Innovation. This new article is entitled Research exploitation: catching up at a quick pace!

It begins with:“Academic research is not only a driver of scientific progress. It is a means to change the world. Many discoveries, including in areas related to basic research, can lead to new processes, products or services.”

Lewiner then explains the complexity of a successful exploitation and biases related to it. “The first [bias] is that, when we think about exploitation, we stick to patents. […] But sticking to patents means ignoring the essential, i.e. the entrepreneurial aspect of exploitation. […] Hence the importance of the entrepreneurial aspect: encouraging researchers to found startups and develop by themselves the economic potential of their discovery. The second bias comes [with …] a strong reluctance to admit that a researcher can make money, or even a fortune. […] A researcher’s brain is government property!”

Then Lewiner adresses the topic of licensing – More about it in How much Equity Universities take in Start-ups from IP Licensing? So here is what he says: “Nothing prevents the institution from taking shares in the company. 5% of shares, for example, is a reasonable figure, close to what most dynamic ecosystems offer. […] Holding golden shares would be equally counterproductive. […] In short, we need a whole new culture of investment.”

Lewiner indeed insists on an adequate culture: “Speed is a real challenge and on this sense, a well-equipped institution with some experience and good contacts […] can offer a real added value. Role models can also play an incentive role for researchers. […] All these ingredients of the “startup culture” require transmission.”

In the end, I only disagree with his final comment: “I dream of the day when French doctoral students will answer to the question of what they will do after their thesis with the same mindset as their counterparts in Stanford or Harvard: ‘I’m still trying to figure out in which of my thesis supervisor’s startups I want to work with.’ ” I think Lewiner is wrong. Ideally, they should do their own start-ups, just like they do at Stanford

PS: thanks a lot to the colleague who mentioned this interview to me 🙂

When was the word “start-up” first used?

It’s a question I was asked yesterday (May 21) and thought it would have between the 60’s and 80s, but had honestly no clue. So I did a little search, first through old books I had read and found this on Google books:

Silicon Valley Fever: Growth of High-Technology Culture, by Everett M. Rogers, Judith K. Larsen Basic Books, 1984.


but apparently I was quite far. It seems to be 1976 as I found the question answered on Quora: What is the origin of the term “startup”, and when did this word start to appear?


As cited in the OED (1989 edn) start-up, in the business sense, is first recorded in 1976:
1976 Forbes 15 Aug. 6/2 The?unfashionable business of investing in startups in the electronic data processing field.
Start-up company arrived a year later:
1977 Business Week (Industr. edn) 5 Sept. : An incubator for startup companies, especially in the fast-growth, high-technology fields.[…]
The term “start-up” meaning upstart dates back to 1550. Now, in the sense of “budding company”, it was first used by Forbes magazine in 1976:“The OED traces the origins of the term, used in its modern sense, back to a 1976 Forbes article, which uses the word as follows: “The … unfashionable business of investing in startups in the electronic data processing field.” A 1977 Business Week article includes the line, “An incubator for startup companies, especially in the fast-growth, high-technology fields.”