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Bootstrapped Startup Update: Leveraged Management vs Individual Contributions

Starting 18 months ago, I began more detailed timetracking for MassLandlords, which is a bootstrapped startup. I started noting the difference between what Andrew Grove called “high leverage” activities and what Pratt and Whitney called “individual contributor” activities. This is the first time I’ve made a graph of the results. It’s a prime example of “what you don’t […]

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The Surprising Math Behind Startup Dilution

This recently blew my mind, so I thought I’d share some simple math with you. Imagine an investor wants to invest in your startup.  He says it’s worth $1 million and he wants to invest $500,000.  He’s going to take half your company, right?  Wrong.  He’s going to take one third.  At least, that’s the […]

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Are Startup Stock Options a Form of Fraud?

Wikipedia’s page on securities fraud says, “Offers of risky investment opportunities to unsophisticated investors who are unable to evaluate risk adequately and cannot afford loss of capital is a central problem.” Let’s go down the line: Are Stock Options Risky? Imagine you were given options with a strike price at 25 cents per share, and […]

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