Wingedpig.com - Mark Fletcher's Blog

I'm very pleased to announce the launch of Startupping, a resource for Internet entrepreneurs. As I explain in the first post, I want to take the mystery out of the process of starting and running an Internet company. The site has four main areas, the Startupping Blog, a set of discussion forums, a wiki, and an aggregation of relevant blogs from VCs, Angels and Entrepreneurs. To kick things off, I've asked several successful Internet entrepreneurs, including John Battelle, Paul Graham, Dick Costolo, Chris Pirillo, and Ross Mayfield to describe the best decision and worst mistake they've made as an entrepreneur.

Startupping will work best as a community. Entrepreneurs don't start out knowing everything about the process of starting a company, and situations and solutions change with the times. This is the site I wish had existed back when I started my first company. I've invited many of the successful entrepreneurs I know to participate. It's my hope that through Startupping, we will be able to help people get started and become successful, and in turn grow the community of new Internet entrepreneurs.

Posted by Mark Fletcher at 09:46 AM | Permalink | Comments (8)

This Google stock registration statement is being talked about today. It lists many (all?) of the YouTube stock holders and how many shares of resulting Google stock they wish to register. There's a total of 4,204,215 shares listed, and the 3 YouTube founders are registering a combined 1,525,617 shares, or 36% of the total. This roughly matches what has been reported in the past as their percentage of the company, which was founded almost exactly 2 years ago.

Typically, when a startup first raises venture capital, the founders agree to subject part of their stock to a repurchase agreement. The amount of stock that can be repurchased by the company decreases over a period of time (3 to 5 years, typically). This means that if a founder were to leave after a couple months, they'd end up losing some chunk of their stock in the company. Investors do this as one way of protecting their investment.

What I haven't seen mentioned anywhere is whether the YouTube founders (at least the two still working at YouTube/Google) were subject to such an agreement, and if so, did it carry over after the acquisition by Google. My guess is that the answer is yes to both statements. Assuming a 4 year vest, they would only be able to sell about half their holdings right now. Which of course is not bad, any way you look at it. But budding entrepreneurs should keep in mind that when you hear about these exits, what's not often mentioned are the continuing lockups, and the resulting risks (what if Google's stock fell to $10/share before they had a chance to sell any more stock, for example?).

Posted by Mark Fletcher at 12:24 PM | Permalink | Comments (3)