Can HN suggest any good book that compactly deals with "all the non-technical details you need to know about starting a startup"? Obviously I'm not expecting anything comprehensive.
Venture Deals by Brad Feld is a good one. Mind you, I'm an earlyish employee and not a founder, but the startup I'm at is thankfully transparent and gives us enough financial metrics for me to put a lot of that book to use in contextualizing our previous fundraising rounds.
I disagree, it definitely helps to have a real example and the more tangible the example is the better it is to follow the explanation.
Especially for the follow-up pieces, it helps to have the history of the company in mind when looking at the other funding rounds.
No, actually. In equity financings, the dilution's in the details.
Specifically there are two major ways I've seen pro rata clauses vary: How the percentage of the company an investor owns is calculated, and what shares that percentage is multiplied by to get the number of shares that the holder is entitled to purchase.
Basically, most investors will have terms that calculate percentage ownership off of amounts that include available but unissued shares of the employee stock pool, and will be entitled to buy a percentage of the shares directly issued for the equity financing.
Y Combinator pro rata rights specifically exclude available stock pool from the calculation for percentage they own, and include shares from convertibles as part of the percentage they get. This is better for them, of course. (And closer to intent in terms of preserving ownership)
