JIGO Blog

Is having ROFR or ROFO statistically common?

Standard Terms

A Mutual NDA template created based on most commonly used provisions and terms : a JIGO X OfCounsel collaboration

When you're a smaller company (vendor or supplier) about to work with a big company, you'll likely run into something called a Master Service Agreement (MSA). 📜 It's basically the rulebook that sets out how you'll work together. Signing this document is usually one of the first steps when you're trying

You've built a following, and now you have a possible Influencer contract with the brand. What is the payment method you should push for? Flat Rate? Monthly? Fee per post? Travel coverage? There is no RIGHT system, but what is the most common system based on data? Flat Rate & Commission

Accelerator asking for fees to participate in their program. Is it a red flag? Maybe or may be not. Is it market? No, its not. NO There seems to be different perspectives around Accelerators charging startups a participation fee. There are some good arguments from both sides. * LinkedIn Post (and

There is an interesting point regarding YC SAFES (post money). It (discreetly) has an anti-dilution clause that is not market at all : Full Rachet Anti-dilution First of all... What is an Anti-Dilution clause? a provision which protects an equity holder from dilution due to subsequent equity issuances (issued either directly

Super common question startup founders have. “How should I split equity with my cofounder?” There are conflicting advice on how equity should be split between co-founders. Y Combinator famously advocates for equal split, and others provide calculators to split the equity "fairly". What does the data say about the (Most Common)

You see a 'play to play' provision in an investment offer from an investor. What is it and is it market? Pay to play : no What is 'play to play'? As the name suggests, “pay-to-play” provisions require existing investors to pay (i.e., invest) in order to continue to play (i.e.,

'Drag along rights' actually sounds scary. But based on statistics you'll probably see this in your early investment contracts for your startup. But is it common / market? Yes Prevalence of Drag-Along Rights The Venture Beacon report by Aumni, a comprehensive analysis of investment contracts up to the end of 2023,

You got accepted to an startup accelerator. Congrats! Now you need to read and the evaluated the actual terms before you accept the offer. Evaluation of the investment terms is going to be very subjective and nuanced. But let's compare the 'investment dollar to equity' exchange of a few of the

If you're going to raise capital for your startup, you need to define the instrument. Priced round vs non-priced. SAFE vs Convertible Note. So forth. There is no right answer but what's the most common (market) financial instrument for (pre)Seed rounds? According to data its... Post Money, Cap only SAFE The

Legality around 'non-compete' is complex, in that every state in the US has different approaches, and some states outright declare them unenforceable in certain situation. So talk to a legal professional. <sefarth.com> Are Non-compete clauses common (market standard) in NDAs? Depends on the context, it being Employer-to-Employee vs Business-to-Business. Yes -

You final got Big Corp to listen to your sales pitch, and now they want you to sign an NDA. No problem. You see 'indemnification' in the NDA. Is this market? including 'Indemnification' in NDAs is NOT market Indemnification is an explicit covenant to pay compensation for losses taken as a

You get an NDA to sign from Big Corp. You see a 'non-solicit' which prevents you from poaching employees from them. Is this clause standard in NDAs? There may be circumstances that a non-solicit clause may be needed, but just purely based on data, most NDAs do not have them. Non-solicit

The startup covering (a portion of) legal fees of the investor. 🤷🏼‍♂️🚩 When I received my first ever investment term sheet this was a section that raised red flags in my mind. But turned out be totally industry norm. Its one of those things that look weird coming from the outside

You want to bring on a great advisor, you agreed on the amount of equity (see this post on what's market for Advisor Equity). But what about vesting schedule? Should there be a vesting schedule and if so what would that look like? Based on what's being said around the industry,

You're trying to sell to BIG CORP. They ask you to sign an NDA prior to discussions. BIG CORP sends you an NDA that says the duration is 7 years. What's standard though? 2 years (24 months) Based on a survey done by Business Law Center on Westlaw with 142 NDAs.

updated 7/23/2024 What's the most common Discount for SAFE investment? 20% Quick note : there is a distinction between Discount and Discount Rate, where Discount Rate = 100% - Discount. Typically conversations would be about Discounts. (e.g. We'll invest with a SAFE with a 20% discount) but the actual SAFE will

Dividends are not the focal point in startup investments. I've even heard an investor say she has never seen a startup actually pay dividends. But its there nonetheless in startup investment contracts. So what is market? It seems to be... 7-12% Non-Cumulative Rates Was unable to find a comprehensive study on

A 'Board of Directors' is required for corporations in the US. And the board will grow and evolve as a company progresses (and as investors ask for board seats). But when can founder expect to lose control of the board? Series B Let's look at the data that's available. But note

What's market for Option Pool size for US startups? It seems to be.... 10%-20% Though there are some variance on the recommended % of shares that should be allocated to the Option Pool, the general consensus seems fairly consistent. The best and latest source of data is, again, from Peter @

What's market for Anti-dilution clauses for venture investment in the US? It seems to be.... Weighted Average and by a large margin if I may add. What are 'Anti-dilution clauses/provisions'? Anti-dilution provisions are mechanisms in investment agreements that protect investors from the dilution of their ownership stake in a company during

What's market for funding round dilution? In other words, how much ownership are startups giving to investors per funding round, and won't raise eyebrows? It seems to... 20% or less (for Seed) I remember chatting with an 'old school' investor who proudly mentioned that they were able to negotiate a 60%

What's market for a founder's salary(US)? It seems to be around... $100K -140K (Seed) Like many things in startup land, there has been and currently are various views on this. Peter Thiel famously said, "The lower the CEO salary, the more likely it is to succeed". And the famous 'Ramen Profitable'

What's market for equity grants to startup first hires (non-founder, US)? The average and mean seem to be around. 1% - 2% If you're giving your first hire more (or less), it's going to prompt questions of why. Again, it's not that its right or wrong, it's that instead of a

What's the most common equity vesting schedule for founders? 4 year vesting with 1 year cliff If your vesting schedule is different, it will raise questions or at least double glances. Though widely agreed that this is the most common schedule, there is surprisingly little statistical data publicly available. The closest

Actional Contract Insight When negotiating a contract with Microsoft, you should state in some form or language that no discounts will be provided and that the invoiced price is the final payment amount. You close a $500K deal with Microsoft. After delivery, you promptly submit a $500K invoice and is processed

College friends start a company together, their professor “advises” them- has 15% of the equity. College friends start a company together, their professor joins the company as a “co-founder”, but is too busy to be involved in the day-to-day (aka advisor)- has 20% of the equity. You would think instances like

What is the revenue number you have to hit to raise a Series A (in the US)? The rule of thumb I had been told, back in 2019, was $1M but that number seem to be moving upward today, which makes sense. So what does the market say? What is the

What's market (statistically common) for liquidation preferences in startup investment terms in the US? non-participating 1X liquidation preference In plain English, this means that when the startup is sold, the investor gets 100% (1X) of their money back and done. As a (overly) simplified example, say your startup is sold for