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business Archives - Help with mergers & acquisitions, raising capital, creating stock options and other equity plans

Posts Tagged ‘business’

Crowdfunding – An Adaptable Gamble and Game

Will crowdfunding continue to help your money grow?

Will crowdfunding continue to help your money grow?

With the popularity of crowdfunding rapidly increasing, we have noticed that everything from school plays to community renovations and business ventures are finding funding through various crowdfunding campaigns. But with the word crowdfunding, or crowd sourcing, becoming such a common American word, we must pose a question about the future of crowdfunding.

We have been discussing this very topic with various colleagues, and collectively we wonder if the effectiveness of crowdfunding will last or if we will have a need to find something new to revolutionize start-ups in the future the way that crowdfunding did in the past. Our Colleague Barry Rickert, like many others, believes in the idea that most crowdfunding is equity based and will adapt according to the times. Read the rest of this entry »

Stock Appreciation Rights – What Are They? Do I Want Them?

 

Are your SAR’S putting money in your pocket?

Employers have various ways of compensating and rewarding their employees and with the presence of employee stock options and all the various forms of equity compensation plans. Understanding all these methods of compensation is important. Stock appreciation rights are some of the most rewarding forms and today we will explain what they are, why you should want them and how they work.

What are they? Stock appreciation rights are an employee incentive granted by a company according to a pre-determined plan. These grants allow employees the chance to receive benefits and a bonus of sorts that is equal to the appreciation or increased value of a stock over a specified amount of time.

Why do I want them? Stock appreciation rights are highly desired due to the fact that unlike employee stock options, no exercise price is to be paid.  At the end of a given period, the dollar amount that makes up the appreciation value will be given to the employee in a lump sum or placed in a retirement fund. Each company’s procedures will vary, so consulting your own plan will give you the best understanding of how stock appreciation rights apply to you and your plan.

How do they work? Stock appreciation rights give employees the benefit of being involved in the company’s stock performance without being financially responsible for the risks. For example, an employer grants one employee 200 stock appreciation rights and over a pre-determined period of time the stock value increases by one hundred dollars per share. A simple equation will give you the total profit made from this increase; total stock appreciation rights multiplied by the increased value will equal the total take away. In this case, 200 x 100 = $20,000 profit that will be given directly to employee.

As you can see, stock appreciation rights can be an effective means of providing employees with bonuses. Each company’s plan will be different and here at Stock Connections we are equipped with tools to maximize your understanding of the plan you have been given and how the stock appreciation rights will be applied to you and your future financial decisions.

Stock Connections specializes in working with San Francisco Bay Area companies that are involved in mergers & acquisitions, are raising capital, or creating stock option or other equity plans. We help start-up, private and public firms become – and remain – SEC-compliant. Stock Connections’ services are designed to help both start-ups and established firms comply with SEC and other regulations in their equity compensation programs. If you or anyone you know is looking to get involved with any of the above, we encourage you to contact us today!

 

Crowdfunding – Top 9 Online Resources Part Two

Can crowdfunding grown your business?

In our last post, we introduced 5 of the top 9 websites that promote and host legitimate online crowdfunding. Today, we will familiarize readers with the remaining four crowdfunding platforms that can help ensure a successful launch.

They are:

5. Kickstarter: This platform is best known for offering crowdfunding opportunities for creative purposes; this includes films, music, art, journalism etc. Kickstarter has also received positive reviews from press outlets like Time, BBC and CNN. The site is very investor friendly and will present investors with both national and local funding opportunities. Read the rest of this entry »

Crowdfunding – Top 9 Online Resources Part One

 

Can you make your money grow?

Crowdfunding is one of the most innovative methods by which entrepreneurs are funding their business ventures, but with hundreds of sites claiming to assist in legitimate online funding, it can be tough to differentiate the real from the risky. In part one of this post we will introduce 5 of 9 websites that have known popularity and proven results.

1. Community Leader: This site is our favorite here at Stock Connections and we highly recommend it to all of our clients. This site features online videos and seminars to help businesses and investors learn more about the practice of crowdfunding. Their CrowdLeader application allows for the highest level of organization with task lists, investor profiles and direct chat features Read the rest of this entry »

Stock Options – 10 Rules for Effective Planning

Photo Credit: (vincent desjard)

Working in a job that offers stock options does not always mean that you work in the financial industry and understand those options. As you can imagine this can sometimes make managing stock options a highly complex and intimidating endeavor.

In this post we will introduce five of the ten rules that will help anyone grab hold of various simple strategies that could help you plan for the effective future of your stock options.

1. Set obtainable targets and goals: Stock options have been used as talent incentives for years and they should be treated with the value that they possess. Set goals for yourself and your stock options and then determine what you want to gain from a future sale of stock. These goals can be as simple as take my wife on vacation or buy my son a car etc. Read the rest of this entry »

Startup Questions: Cash or Equity Compensation?

Photo Credit: seekingthomas

A common question for startup companies is how much equity compensation, or shares of the business, they offer employees as part of their income. This can be an especially difficult question when the startup is new and the shares don’t hold much value yet.

What exactly is equity compensation? Because new companies don’t often have the financial means to attract high quality employees, many use this non-cash compensation as a way to give workers a form of ownership in the startup. Equity compensation refers specifically to stock options that include the right to purchase shares at a predetermined price, or exercise price. Over time, the option vests so the employee has the right to sell or transfer the shares, encouraging them to stay with the startup for a longer period of time.

It’s important to note that employees with equity compensation options are not considered stockholders so they don’t have the same right as shareholders. Equity compensation requires a lot of legal, accounting and tax planning, so it’s important for the startup and employees to look into the rules that apply to their situation.

How much should you offer in equity compensation? A Smart Bear explains that when someone works for less salary than they could make somewhere else, they’re making a cash investment into your company. How do you compensate through shares? Think about how much cash they’re giving up by working for the startup. Then make an educated guess as to how much the company could be worth in three or five years. Once you have those two numbers, you can determine what percentage of the company’s shares would be fair by dividing the cash the employee is giving up by the total amount you expect the startup to be worth in three or five years. Although it’s not an exact science, it will give you a good idea of a reasonable offer to make your employee. Read the rest of this entry »

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