Early Stage Companies
Start Up Package
Being an entrepreneur is tough and sometimes the number of hats you have to wear is daunting. When you finally find a potential investor to help build and grow your business, how are you going to close them. If you’ve never done this before it’s important to have an experienced team with you to not only help tell your story but to provide credibility to the company’s business and financial model. For early stage companies we have a package designed to do just that.
Over the next 60 days we will develop your financial model and train you on the nuances of the model and how to make ongoing adjustments. We will edit or develop your investor pitch deck as well as a one page teaser to share with potential investors. We will create your pro-forma capitalization table and provide you with boiler plate investor documents if you need them. We will provide you with a written summary at the end of the project assessing the quality of your back office processes and opportunities and next steps to scale as you begin to grow your business. During the term of the engagement we will support you in any investor calls, meetings, and communications.
$5,000 for the engagement and services plus the cost of any requested travel
409A Valuation
Section 409A of the IRS code describes under what conditions deferred compensation is taxed for income purposes. Section 409A generally provides that unless certain requirements are met, amounts deferred under a non-qualified deferred compensation plan for all taxable years are currently includible in gross income to the extent not subject to a substantial risk of forfeiture and not previously included in gross income.
In simple terms, as a private company there is no market or independent price established for your stock that may be issued to your employees in the form of stock options or restricted stock. In order to reduce the risk of an unexpected taxable event, you generally will issue employee options or value restricted stock based on a third party’s independent valuation of your common stock. Section 409A allows for a safe harbor for tax purposes, so that if a 409A valuation is performed under certain guidelines, the price established for your common stock will be considered a fair market price. By issuing vesting stock options with a fair market strike price, your employees can defer a taxable event when receiving the options. For restricted stock, your employees may make an 83(b) election with the IRS and only pay taxes on the fair value of the stock at the time of grant.
We can perform your 409A valuation, which generally should be completed each year and in connection with any priced equity raise.
- $2,000 If you have no or only one Preferred Equity priced round (i.e. Seed or Series A )
- $4,000 if you have two Preferred Equity priced rounds (i.e. Series A & Series B)
Let’s discuss your cap table and pricing if you have more than two Preferred Equity rounds and/or derivative instruments such as Warrants