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In The Media

Sweat Equity

by Larry Chiang on August 20, 2016

By Larry Chiang

What VCs pay attention to. 
What sweat equity really means. 
How sweat equity really works. 
How things might turn out. 

Larry Chiang (@LarryChiang)
Sweat equity has 12 very common patterns. Here’s what VCs pay attention to (bc we’re too dumb to get tech)

START. #LarryChiang @LarryChiang

Larry Chiang (@LarryChiang)
Where does all that #SiliconValley sweat equity come from!?!


A lot of people definitely lose. 


Larry Chiang (@LarryChiang)
Attrition is like breakage. Someone wins when breakage happens. Sum, lose. #SweatEquity@LarryChiang

Larry Chiang (@LarryChiang)
There is a nice chunk of equity when you cofound a company with a sitting GP (vc). #nonEmployeeCofounder pic.twitter.com/2socCxt7qM

Larry Chiang (@LarryChiang)
3 co-founders meshing is like a manage a trois where no one feels left out. Can’t happen. #threeWay #WrongWay #cs183team

Larry Chiang (@LarryChiang)
For example, THIS manage a trois in bed. {if you’re not fluent in French like me it means 3-way. Applies to founders pic.twitter.com/rKS7vBzqFr


image1.JPG
Larry Chiang (@LarryChiang)
“Firing founders. Trust me, your equity evaporates after the [eventual & amorphous] recap.” 

@LarryChiang

Larry Chiang (@LarryChiang)
Never trade your dog for someone else’s cat. {Aka selling your startup for all stock}

#EquityLost
@LarryChiang

Larry Chiang (@LarryChiang)
A lot of the value lies in the trash heap. #cs183e. Edit! #SweatEquity

@LarryChiang


image2.JPG

Asse9 Austin Secret (@asse9)
Glorified “scraping”.
Repurposed momentum. 
Existing parades.
All, good

@LarryChiang

Larry Chiang (@LarryChiang)
“Buy stock in you own startup whenever you can.”

@LarryChiang

Keith Teare (@kteare)
This is spot on – @JoshKopelman @firstround What the Seed Funding Boom Means for Raising a Series A – firstround.com/review/what-th…

Robin Klein (@robinklein)
Silicon Valley is broken – how to fix it>>a cold hard look at the Series A/B crunch from web veteran, friend @kteare  us6.campaign-archive2.com/?u=8454d2b163d…

Larry Chiang (@LarryChiang)
“Buy stock in you own startup whenever you can.”

@LarryChiang



Asse9 Austin Secret (@asse9)
Like series B, 2nd round of Botox…, can get messy. VCs a problem bc u can’t just do it One round; 1x twitter.com/kteare/status/…


Larry Chiang (@LarryChiang)
Remember that team anti Christ is using the wrong logo. The upside down cross signifies how 3 mentees died inverted. Like Maverick #topGun

Larry Chiang (@LarryChiang)
For Peter’s sake, google what #cs183clawback is. Uber #nonEmployeeCoFounder, did. U can too

@LarryChiang LUVS #cs183s

Larry Chiang (@LarryChiang)
If and when you do get fired from your own startup, execute the @LarryChiang countermeasures. Don’t go on vacay. #cs183vc

Larry Chiang (@LarryChiang)
The best sweat equity is from killing five birds with one stone. Confucius says, @LarryChiang tweet(ed)

Larry Chiang (@LarryChiang)
When u quit a great company with a great CEO, he gives you a million for ~25% and shakes your hand, out-the-door #sweatEquity

@LarryChiang

Larry Chiang (@LarryChiang)
Remember, your planet has 90+% of the galaxy’s liquid water. That #sweatEquity is all house money. #ch2

@LarryChiang

Larry Chiang (@LarryChiang)
Sweat equity. Even you lapdog wants a JOB so put that canine on a vesting sched and start up. @LarryChiang pic.twitter.com/mOkY6bxeET

Larry Chiang (@LarryChiang)
Sweat equity. Import from Vancouver “Sumi”, ‘Yumi’, Yoshi, Amelie, Ying and Astro. Overstay #df16 

@LarryChiang pic.twitter.com/bnbvIq9Chr

Larry Chiang (@LarryChiang)
If your two cofounders up and quit and go to Harvard Business school, go buy 20 stuffed animals. 
@LarryChiang pic.twitter.com/PGCmccjoOd

Larry Chiang (@LarryChiang)
SWEAT EQUITY does not mean cash poor. Done correctly, you crank cash while you build equity sans sweat
@LarryChiang

Larry Chiang (@LarryChiang)
Sweat equity has about a dozen very common patterns. Here’s what to pay attention to…

END. #LarryChiang


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