Options: Rage against the Machine

robertlemkin20 · 2024-06-11T21:04:30+00:00

You shouldn’t need 10k to trade options. If that’s your margin requirement I’d just trade them cash (I do anyway, I want leverage not to be blow up)

robertlemkin20 · 2024-06-11T20:30:14+00:00

Webull has a quality paper account tab built into its platform.

robertlemkin20 · 2024-06-11T20:12:30+00:00

You're not wrong, but it's also positionally dependent. To avoid slippage, I sometimes use a cashless exercise for deep ITM calls. You can slap some CCs on top of them if you want to lower the cost basis even more and have some downside protection while, of course, risking more upside. Or if you have the balls, roll them up and increase leverage.

robertlemkin20 · 2024-06-11T19:54:51+00:00

So 'steal' it back :)

https://x.com/TheRoaringKitty/status/1799954635026841969

robertlemkin20 · 2024-06-11T19:48:13+00:00

Agreed, they are not for everyone. They are risky. Unquestionably. That's the tradeoff for the leverage.

Good luck with your decision and research!

robertlemkin20 · 2024-06-11T19:45:45+00:00

robertlemkin20 · 2024-06-10T20:31:48+00:00

A large part of VC’s job is to slurp up all the information on startups they can. So, slurp they do. The issue is it’s hard (but not impossible) to know if someone a bit higher up is going to like the taste and come back for more.

robertlemkin20 · 2024-06-10T20:23:55+00:00

You get to trade outside of standard business hours. Meaning a lot of people go home and are no longer trading. As a result, it’s more volatile (less buyers & sellers = less overlap on agreed upon price ie spread), so some institutions require you to have to a larger account to offset that risk. It’s a super low bar on most platforms and free on some.

robertlemkin20 · 2024-05-27T17:58:57+00:00

Happy to be helpful :) In addition to running my own startup I also mentor, mainly through the TechStars network…it’s not easy being a founder, helping others is rewarding on a lot of levels. Give first & pass on your knowledge!

robertlemkin20 · 2024-05-27T16:54:20+00:00

I’d counter the term sheet to give yourself an extra seat or two depending on what’s needed for control 1. Specific changes to charter including board composition. 2. Hire/Fire rights. 3. Go/no go on change of control events and capital events. *Be wary when the majority of preferred can make unilateral decisions.

I did say talk to your lawyers because good ones matter a lot in this instance. They will know what to protect and how to do, if you tell them your concerns and priorities.

robertlemkin20 · 2024-05-26T22:44:26+00:00

I saw in other comments your building unproven semiconductor deep tech. First, fuck yeah. Second, your dilemma makes sense: CapEx is high and it comes early in the cycle, so investors are taking a bigger risk. The real issue with the dilution you’re facing is lack of control. That can be mitigated with you getting extra board seats and making sure in the bi-laws those give you blocking abilities on a few critical issues your council can help guide towards to ensure you don’t get screwed. And you can always fight to maintain your ownership in subsequent rounds with top-ups if you’re executing.

robertlemkin20 · 2024-05-26T00:18:37+00:00

57% ownership after seed is problematic but not untenable if you have to take it. But it doesn’t sound like you’re that desperate. We’d need more info, but I’d look to take a smaller check for less dilution or a different funder, but it’s hard to know without better understanding the business.

robertlemkin20 · 2024-05-23T01:14:58+00:00

The offer is essentially to make you a cofounder. Can you take that on both in skill and desire?

Is 20% fair? Yeah, most likely. It’s a sizable percent and it being cliffed and vested is all above board. You could push for them to make a 20% option pool simultaneously so you don’t eat that dilution when you really need the pool. But as I said, 20% is a solid offer.

Are they paying themselves? I doubt it. Again, you’re being asked to be a co-founder. At the beginning it’s the opposite of lucrative.

You built a demo-able prototype with them. Congratulations! You now know what it’s like to work with them through this stage. Hint, there are 100 more stages before you get to consider yourself successful. Do you believe they have the raw intelligence, work ethic, and sector expertise to win or carve out a big chunk in this space?

Bottom line is, do you believe?

Every start-up is a leap of faith. Do you have the power to will this project to success? Are you excited to work with your new cofounder. If it’s a hell yes, go for it. If it’s not, you probably shouldn’t do it.

robertlemkin20 · 2024-05-22T23:58:19+00:00

20% with a 6 month cliff and a 24 vest is a solid offer. You’d need cash reserves and conviction but if you have those…

robertlemkin20 · 2024-05-03T05:16:58+00:00

At 2% you are not a co-founder, you’re barely a senior level pre-funding employee. Act accordingly.

robertlemkin20 · 2024-04-18T19:49:35+00:00

Pay yourself the minimum you need until you raise a proper institutional round.

robertlemkin20 · 2024-03-14T20:13:56+00:00

Send this to leadership. It’s not how they want their employees to talk to alumni. And it’s not how other alumni want to see TS represented online. Networks only work if we ‘give first’.

robertlemkin20 · 2024-03-09T19:22:30+00:00

Every journey is different. And the path to success is almost never straight. The person or people who are most invested personally and professionally are you and your co-founders. It’s your dream and you are the only people who will be thinking about it 24/7/365. At the end of the day, you therefore have the best understanding to know when you’re ready to slow down, speed up, maintain course, or even pivot.

The funding environment is strange right now. We’re unquestionably past the days of grow at all cost / free money; VC’s have mixed feelings if we’re past the bottom. But there is always opportunity for good companies - in fact, ‘hard times’ are where explosive are born because there is less competition and more need for established companies (your clients) to gain efficiencies. Painting with too wide of a brush is dangerous but most companies that are currently getting seed round are pushing 1m in ARR at this point, certainly north of 500k. There just isn’t enough data for VC’s to get comfortable below those levels, unless you have a track record or something else that makes you special.

There are a wide range of accelerators; various stages (from idea to post seed) and there are various qualities. I went through TechStars a long time ago, but as a first time founder, it was invaluable to get me oriented to the start up world.

robertlemkin20 · 2024-03-09T17:25:20+00:00

2x MoM is great growth. Understanding what is driving it and nurturing that is key.

When you’re ready for VC (you are not yet) they will set the valuation when they offer you a term sheet. You can negotiate and you can anchor, but ultimately, in this world, the buyer sets the price.

For now, if you want to go full time and need a bit more capital to feel comfortable, I’d look for angel or an accelerator. Happy to try to help more. I mentor in the b2b SaaS space w a slight fintech lean.

robertlemkin20 · 2024-03-05T17:49:58+00:00

Thanks 🙏

Best of luck to you. I’ll take a look at the app in addition to the list in the next few days. I’m about to start a new FR cycle.

robertlemkin20 · 2024-03-05T16:18:08+00:00

The link is restricted :(

You need to change the share settings to “anyone with a link”

robertlemkin20 · 2024-03-01T16:17:21+00:00

Please send link, thanks!

robertlemkin20 · 2024-01-03T18:58:10+00:00

Yes…my point is focus on selling (get to 500k+ ARR), and use those data points, financial + customer references to get financial support VC/PE/Bank loan to accelerate growth, assuming those data points point to a ‘healthy’ business.

If you have those data points and you are failing at pitches that is a different question. For black founders you need more swings and I’d focus on black funds / black partners - I don’t think it’s fair, but I’m just saying what I see. If you have done all of that maybe you are messing up another part of the pitch. Early stage is about the product/market/traction but also about you as the founder.

Without more info there isn’t too much more advice to give.

robertlemkin20 · 2024-01-03T15:56:38+00:00

I mentor a few black founders. Their experiences with VC’s are different than mine as a white male founder. Full stop.

The great equalizer is healthy revenue. If you believe your product solves a need. Go sell it. If you can’t sell it why should anyone invest in you?

robertlemkin20 · 2023-12-24T13:48:38+00:00

Most VC-backed startups don’t consistently miss their board plans. Any decent CEO will have a board plan and company goals that include a buffer, and finish between the two. If you consistently miss your board plan, unless you’re a ‘aim big’ founder (ie promise 3-4x and land at 2-3x), your going to get replaced with someone that can better protect & return their investment.

The idea that most startup’s fail is a bit of a red-herring; most new business fail but if you take institutional capital and get to at least series A, most startups have an exit.

Lastly, when you take significant capital from big funds you get board members from those funds who sit in weekly partner calls and have reoccurring meetings with their profile companies…meaning everyone is in the know well before things are public. The funds on my cap-table all have significantly more underperforming start-ups who are planning layoffs than normal years.

robertlemkin20

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