Payoneer’s Post

Smart VCs take care of entrepreneurs/executives 💵💶💰 ———————————————- It makes total sense to derisk entrepreneurs' and top executives' interests, aligning well with creating a more committed and motivated team. Key Strategies to take ! ✅ Equity Allocation By allocating equity to key staff, you effectively incentivize them and address their personal financial stability, which can indeed keep them focused and reduce the risk of attrition due to financial pressures like mortgages. ✅ Low-Cost Shares vs. Options Providing low-cost shares instead of options can be beneficial from a tax perspective. I generally create different share classes to manage early leavers and their equity. This strategic move helps them feel like “founders,” even though they are not the risk-takers but those with big egos who like the bragging rights and keeps them onside for ‘free’ ✅ Flexible and Employee-Friendly Structure This approach fosters a sense of ownership and loyalty among key staff without the burden of significant financial risk on their part. ✅ Selling Vested Stock Key staff leaving should be allowed to sell down vested stock as it makes it available. This has worked well, particularly for projects that can take a decade or more to deliver substantial value for stakeholders (most global projects). VCs that don’t or can’t follow this common-sense approach because of their time-limited LP agreements rarely get the winning entrepreneurs or projects. This is one reason why most VCs fail. ✅ Attracting Talent Attracting talent is key, and the smart ones are wary of long lock-in periods and potential illiquidity. ✅ Cost-Effective Termination Tool It’s also a good tool to pay off key staff that need to be replaced or terminated. It’s cheaper than expensive redundancy payments as the company scales and needs more experienced CXOs. 2 decades of establishing and funding startups has thought me that a common-sense, flexible approach to equity and compensation can lead to more successful outcomes for both the company and its stakeholders, particularly exiting founders/early investors. If any entrepreneur needs some advice on these structures I’ve used 10+ times, message me and I’ll send you the template agreements I use ! #VC #PrivateEquity #Entrepreneurship #Startups #EquityIncentives #EmployeeOwnership #StartupSuccess #MotivatedTeams #TalentRetention #LongTermProjects #FlexibleCompensation #FounderMindset #BusinessStrategy #ScalingStartups #LeadershipDevelopment Great post Hillel Zidel 😀

💰💰💰 Taking Cash Off the Table 💰💰💰 VCs typically do not favor founders selling secondaries, viewing it as a negative signal in the founder's belief in the business's future. VCs worry that the founder might want to relax on a beach somewhere 🏖️🏖️🏖️. At Kennet Partners we have the opposite view. We actively encourage founders to take some cash out as part of a deal. Why? 🙋♂️⁉️ - **💼 All In**: Founders, particularly bootstrapped and capital-efficient ones, have usually invested everything into the business. - **🏠 Lifestyle Sacrifices**: They have made significant lifestyle sacrifices along the journey. Some cash out allows for things like mortgages and school fees to be paid off. - **💸 Wealth Concentration**: The business often represents nearly 100% of their personal net wealth. - **🛡️ Risk Mitigation**: As the business scales, founders can become risk-averse. Taking some cash out enables them to feel comfortable with the next stage of the journey. It’s actually pretty uncommon for a founder after selling secondaries to start to take it easy. Usually, it's the opposite – once they get a taste of success through a “mini secondary based exit” their drive to succeed actually increases. There are a bunch of other scenarios where we believe secondary sales make sense: - **👥 Co-Founder Departures**: Facilitating smooth transitions by selling the shares of departing founders, allowing the remaining founders to continue driving growth. - **💰 Employee Liquidity**: Offering liquidity to early employees who have been with the company for a long time, ensuring they are rewarded for their contributions. - **📈 Investor Returns**: Providing returns to early investors and angels who have been with the company from the beginning, aligning interests across the cap table. At Kennet, we believe that these scenarios, when managed correctly, can strengthen the company and align everyone's interests for long-term success 🚀🚀🚀

OffDeal (YC W24) has just raised $4.7M in seed funding to offer small business owners a faster and cheaper way to sell their company. OffDeal is an AI-native investment bank for small businesses. Their AI technology automates most of the grunt work typically done by analysts at larger Wall Street banks, enabling their in-house M&A advisors to focus more on strategic client interactions, leading to faster deal closures and higher sale prices. OffDeal was born from personal experience. In 2019, co-founder Ori E., a former banker, tried to buy a local cooking oil collection business. He was shocked by how painful, clunky, and inefficient the SMB M&A process was, with both sellers and buyers receiving little guidance. Inspired to change this, Ori partnered with Alston L. to build OffDeal. Over 80% of small business deals occur without an advisor, resulting in lower sale prices, broken deals, and dragged-out cycles. Most owners lack access to the M&A advice they deserve. With OffDeal, small business owners can access Wall Street-level service at a fraction of the cost. OffDeal’s mission is to empower all business owners to realize the full value of their life’s work and to promote American entrepreneurship. Congrats to the team on the round! https://lnkd.in/gh2CjK2u

I couldn’t agree more with the perspective shared by Hillel Zidel of Kennet Partners. Ensuring founder well-being is crucial, and allowing them to take some cash off the table is an essential aspect of personal and family risk mitigation. Founders often have a high concentration of their personal assets tied up in the business, which isn't always apparent to their support system. By providing financial stability, we enable founders to maintain focus on driving their companies forward with renewed energy and commitment. It truly takes a village to support a founder's journey, and this approach aligns with our belief in fostering a healthy, forward-looking environment for long-term success. 🚀💪

💥💥💥 Highly Recommended Post & Contrarian VC Perspective: Being a Founder is like eating glass. That's how brutally hard it is. If we have no founders and pioneers throughout history, there will be no civilisation on earth. Therefore, in the absence of an advanced civilisation, we all know what that looks like just by looking at the last 4 centuries alone. If you ponder it carefully, there has only been lasting peace on earth to an extent, post ww2. Everything that happened before ww2 going back to Roman times was extremely brutal and horrible for humans on earth. So what changed? Well, very simple, innovation that emerged through the early 1900's and started to scale rapidly post 2nd world war, brought by pioneering founders to the world. However, there is once again very grave danger lurking all over again in parallel with ww2. If the market economy collapses due to massive multi-trillion dollar debt levels, it could lead us straight into ww3, which I think would be game over for humanity. So speaking for myself, I look forward to rapid AGI pioneering development and passing agency to AI that should actually help humans towards TI, meaning Transcendence Intelligence of new discoveries, including the creation of a global egalitarian financial infrastructure through blockchain, tokenisation, cryptocurrency and convergence of all 4th industrial revolution technologies, such as CRISPR in genetic engineering, AI, IoT, 3d printing, quantum computing etc. As we enter this new pioneering epoch, humans " may " cease to be aggressive to one another and focus on Transcendence Intelligence of new discoveries as a Type One Civilisation. A cleaner and loving world hopefully could emerge 🤓 Morpheus thinks 🌿 differently 💜 💥💥💥 Ask LinkedIn AI right here about 4IRGPT.com and how it works. When you signup as a Professional Knowledge Expert, Company or Prompt Creator, spend a minimum of $2.50 to upgrade or load up your account, then email gpt@4irtoken.com and ask us about Partner 4IR Credits. You could get 10 to 5,000 4IR Credits to use over the 4IRGPT Platform. That’s about a $5000 value. Use your 4IR Credits to generate prompts that could be useful to your LinkedIn Professional Network and let them Subscribe to your 4IRGPT Channel at monthly fees you personally set over the platform. Start Trading your Knowledge & Intelligence today with AI. Someone needs to know what you know more than they know. Start Trading it! 💥💥💥🌿 4IRGPT is Powered by Blockchain Company

Based on my personnal experience as a 3X founder - if the founder can cash out some of their shares, they won’t feel pressured to push for an early exit. This helps align their interests with those of the investors.

Must read post on secondaries from Hillel at Kennet. For me the 2 winning arguments are: 1) better alignment between founders and financial investors - in addition to independent NEDs (and ideally an independent Chair). 2) providing a (decent) exit to seed/pre-seed investors - which is key for a healthy venture funding ecosystem. Every case is of course different, but the definitive ban is no more. Please bear in mind that many of these secondaries are as part of primary fund-raising, which is probably the best time to do it as you have a price reference point. Of course speculative secondaries just for newbie investors to get in AI are a different cattle of fish altogether and warrant special scrutiny. #VentureCapital #Secondaries #Entrepreneurship #FundingStrategy

𝐋𝐚𝐬𝐭 𝐧𝐢𝐠𝐡𝐭 𝐰𝐚𝐬 𝐚𝐛𝐬𝐨𝐥𝐮𝐭𝐞𝐥𝐲 𝐞𝐥𝐞𝐜𝐭𝐫𝐢𝐜! 🎉 🥂 At the "Cocktails for Closers" event organized by TigerEye, I got the chance to dive into a sea of innovative minds and groundbreaking ideas. What a night! One question I posed to many bright entrepreneurs was: "How do you manage payments as a startup?" The array of "aha" moments I witnessed was truly enlightening—revealing just how crucial this aspect is from the very start. 🚀 Here's why it's vital: • 𝐀𝐯𝐨𝐢𝐝𝐢𝐧𝐠 𝐥𝐚𝐭𝐞 𝐩𝐚𝐲𝐦𝐞𝐧𝐭𝐬 • 𝐑𝐞𝐝𝐮𝐜𝐢𝐧𝐠 𝐭𝐫𝐚𝐧𝐬𝐚𝐜𝐭𝐢𝐨𝐧 𝐟𝐞𝐞𝐬 • 𝐏𝐫𝐞𝐯𝐞𝐧𝐭𝐢𝐧𝐠 𝐭𝐚𝐱 𝐞𝐫𝐫𝐨𝐫𝐬 • 𝐇𝐚𝐧𝐝𝐥𝐢𝐧𝐠 𝐦𝐮𝐥𝐭𝐢𝐩𝐥𝐞 𝐜𝐮𝐫𝐫𝐞𝐧𝐜𝐢𝐞𝐬 Big shout-out to TigerEye for hosting such a phenomenal gathering. I'm already looking forward to the next one! #Networking #StartUpLife #BusinessGrowth #PaymentSolutions

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