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How many stock options should executives at a startup company be granted? November 28, 2010

Posted by HubTechInsider in Acquisitions, Boston Executive Moves, Investing, IPOs, Staffing & Recruiting, Startups, Venture Capital.
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A typical North American office

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How many stock options should executives at a startup company be granted?

The Going Rates for Senior Executives’ Stock Options in the Boston area, 2011:

A President or CEO of a startup may typically receive anywhere from 6% to 10% of the company’s stock. The actual percentage of stock granted to the CEO will depend upon such factors as the company’s life stage and financial stability and revenue outlook when the new CEO signs on for employment. The earlier in the company’s formationary period the new CEO signs on, the higher the percentage of stock granted to him may be.

A Senior Vice President of a startup may typically receive anywhere from 1% to 3% of the startup’s stock. In general, and this is across many industries that startups participate in in the Boston area, those with a marketing and sales pedigree are rewarded toward the higher range and those with a financial orientation toward the lower range. This is often due to the fact that very top-notch marketing and sales executives are sinmply harder to find because of intense competition in the Boston area, and when they succeed, they add signigficantly to the bottom line of a startup company’s revenue outlook. In contrast, consider that senior Financial executives are essential to reassure skitish venture, angel and other early stage startup capital funding institutional and individual investors, but they can’t usually stake a claim to having increased sales.

A Vice President or a Key Manager of a startup company in the Boston area may expect to receive (or in the Boston area, may expect to have had to have negociated strongly for) .5% to 2% of a startup company’s stock. A Vice President of sales or a manager of technolgy would be liklier to command toward the higher end of this range of stock percentages, while a Vice President of finance or manufacturing would probably be at the lower end. As I outlined above with Senior Vice Presidents, those with marketing and sales expertise have the greatest amount of leverage. Executives and managers below these senior levels usually receive something less than .5% of the startup’s stock in the Boston area.

I should point out with some stridency that the above stock percentages that I have outlined can be misleading, and I advise starup senior management teams, hr directors, boards of directors, investors, and job seekers to take the above guidelines with care. In the Boston area, a great deal of savvy negociations by knowledgable parties, all armed with a great deal of stock option terminology and business experience, would have to be conducted to arrive at stock option structures like the ones above.

The actual percentage of a startup company that an employee receives in options is much less important than its potential value. Having 10% of a company that’s unlikely to exceed $1 million in value is much less desirable than having 1% of a company that has a good chance of being worth $100 million.

Want to know more?

You’re reading Boston’s Hub Tech Insider, a blog stuffed with years of articles about Boston technology startups and venture capital-backed companies,software development, Agile project management, managing software teams, designing web-based business applications, running successful software development projects, ecommerce and telecommunications.

About the author.

I’m Paul Seibert, Editor of Boston’s Hub Tech Insider, a Boston focused technology blog. I have been working in the software engineering and ecommerce industries for over fifteen years. My interests include electronics, robotics and programmable microcontrollers, and I am an avid outdoorsman and guitar player. You can connect with me on LinkedIn, follow me on Twitter, even friend me on Facebook if you’re cool.

I own and am trying to sell a dual-zoned, residential & commercial Office Building in Natick, MA. I have a background in entrepreneurship, ecommerce, telecommunications and software development, I’m the Director, Technical Projects at eSpendWise, I’m a serial entrepreneur and the co-founder of Tshirtnow.net.



How to use LinkedIn in your job search April 4, 2010

Posted by HubTechInsider in Social Media, Staffing & Recruiting.
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I have written on these pages before about the power of expanding your professional network on LinkedIn. Now I have some new statistics and information that I feel really bore out my earlier comments about the professional social business networking site.


Visitors to the site in 2010 have jumped 31% from 2009 to 17.6 million visitors in February 2010. Your customers, your colleagues, your competitors and your boss are all on LinkedIn. The average memeber is a college-educated 43-year-old making $107,000. More than one quarter of the members on LinkedIn are senior executives, and every Fortune 100 company is represented. Recently, Oracle found their CFO, Jeff Epstein, through a LinkedIn search.


One of the big reasons that LinkedIn works so well for professional matchmaking is that most of the people on LinkedIn already have jobs. But why is that good for job seekers? Well, for one thing, a legion of employed LinkedIn users are using it to research clients before sales calls, ask their connections for advice, and read up on where former colleagues are landing gigs. In this kind of a business-oriented social network, job seekers can do their networking without looking as if they are shopping themselves around. THis population is more valuable to recruiters as well.


In contrast to online job boards, which focus on showcasing active job hunters, very often the most talented and sought-after recruits are those currently employed. Headhunters have a name for people like these: passive candidates. The $8 Billion recruiting industry is built on the fact that they are hard to find, but LinkedIn changes that. It gives the recruiting industry the digital equivalent of a little black book, one that is public ands detailed.


For a generation of professionals, the baby boomers, trained to cloak their contacts at all costs, this transparency is counterintuitive. So far most of the online advice columns have been filled with advice on what *not* to do: don’t post drunken pictures of yourself online, etc. But as more and more companies have turned to the web for recruitment of candidates, it is no longer an advantage for job candidates and job seekers to refrain from broadcasting personal information.


Instead, your new professional imperative should be to present your professional skills as attratively as possible, packing your profile with keywords (logistics engineer, marketing manager, global sourcing specialist) that will send your name to the top of recruiter’s searches. You are also now able to connect your online professional interactions in one place, joining groups on LinkedIn, (LinkedIn has more than 500,000 of them, ranging from groups based on companies, schools, and other professional affinities), offering advice, and linking your blog posts and twitter updates to your linkedin profile.


Look at it this way: you Google other people, so don’t you think they’re Googling you? Part of a networked world is that people will be looking you up, and when they do, you want to be able to control what they find. Helping you present yourself well online is just the start of what you can do using LinkedIn, and with 60 million active users, you should think hard about making it an active and indispensable tool for your career path.


People are in a different context and mindset when they are in and using a professional network. In this networked, interconnected workplace, everyone will have their professional identity online so they can be discoverable for the things that will be important to them. The most obvious thing would be jobs, but it’s not just jobs. It’s also clients, consulting gigs and services.


This new source for recruitment has a complicated relationship with the more traditional staffing and executive recruitment and placement industry. Although LinkedIn is a welcome tool for recruiters, as the LinkedIn software allows recruiters to search its database without access to photographs, thus keeping in compliance with antidiscrimination laws, and to contact anybody in the LinkedIn network. But the Great Recession has forced companies to cut back on their budgets for outside firms. One of the largest corporate recruiters, Heidrick & Struggles, saw their revenues fall 36% in 2009.


LinkedIn’s primary membership is comprised of corporate professionals. Many recruiters spend time daily on the site, reading up on potential candidates, chatting with them in groups and on message boards, and responding to inquires. This approach has been working for many companies: they have been able to use LinkedIn to bring down the time it takes to fill open positions, an important metric among recruiters, by nearly half.


Make sure you always write a personal note when you send a request to connect on LinkedIn. It is very important to complete your profile as much as possible. Get recommendations from former co-workers. Use keywords to bring out the skills you want to highlight. Join groups: recruiters often scour professional groups to round up potential candidates. Answer questions from colleagues that showcase your professional expertise.


Although the prospect of spending all this time online may seem daunting initially, I still recommend placing LinkedIn at the center of your job searching activities. You should be spending a concentrated amount of time on LinkedIn, around 30 minutes a day. I also recommend using a professional picture on your LinkedIn profile page. I recommend against using dogs, cats, horses or cows in the background of your LinkedIn profile picture. I find that many older job seekers are worried that their grey hair or aging appearance will trigger age discrimination. They see that there could be drawbacks to so much transparency, and they fret that using LinkedIn will ensure that employers will potentially know more about them than they should.


These are questions that I have considered from the start of my writings about LinkedIn. Let me tell you what I think about these topics regarding LinkedIn: for all the benefit that LinkedIn brings to a job hunt, it cannot erase the fundamental challenges that exist in the job market. A reality is that many baby boomers are out of work as the industries they have worked in for decades have changes irrevocably. The millenial generation is more affected by joblessness then any generation in American history. These job hunters will need to reinvent themselves in new types of careers. The thing about social networking profiles is that they don’t lie, at least not successfully. You can’t fudge your experience or hide your age, because your connection sknow you in real life. You should post your photo to your LinkedIn profile, as your profile lets you represent yourself as strong as you can, so leverage that to your advantage.


LinkedIn can definitely help you get a job. It can help you expand your professional network, it can help you connect with corporate recruiters and independent staffing firms, land consulting gigs, connect with former colleagues and find out about jobs you never would have known about if you weren’t on LinkedIn. In the end, social networking is just a more efficient way of reaching out to people you know – and people they know. You need to work your professional network, build it before you need it, and use it to help you get an edge in an appropriate way at the appropriate juncture.


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You’re reading Boston’s Hub Tech Insider, a blog stuffed with years of articles about Boston technology startups and venture capital-backed companies, software development, Agile project management, managing software teams, designing web-based business applications, running successful software development projects, ecommerce and telecommunications. You can subscribe to Hub Tech Insider’s RSS feed.

About the author.

I’m Paul Seibert, Editor of Boston’s Hub Tech Insider, a Boston focused technology blog. You can subscribe to Hub Tech Insider’s RSS feed in your RSS feed reader. You can connect with me on LinkedIn, follow me on Twitter, even friend me on Facebook if you’re cool. I own and am trying to sell a dual-zoned, residential & commercial Office Building in Natick, MA. I have a background in entrepreneurship, ecommerce, telecommunications and software development, I’m the Director, Technical Projects at eSpendWise, I’m a serial entrepreneur and the co-founder of Tshirtnow.net.

How to expand your professional network on LinkedIn June 3, 2009

Posted by HubTechInsider in Social Media.
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Metcalfe’s Law: The value of a network increases in proportion to the square of connections.

(The following text is from a note I wrote in response to a sincere letter from one of my professional contacts on LinkedIn who asked me how I am able to expand my network of professional contacts on LinkedIn to such a great degree in such a short amount of time. There are ongoing debates about quantity vs. quality that rage online. I am of the school that you need a high quantity of high quality connections in order to experience the benefits of “Network externalities” or “Network effects”, in much the same manner as I have written about regarding Twitter. A large network allows you to see deep within organizations, check out potential employers, potential hires, and find out so much more than just having a few professional connections affords you. The point of networking isn’t to have communications amongst people already in your address book or the people you currently work with; The point of networking is to expand your professional horizons and connect with people you don’t know but would like to.)

Hi Jim –

Please feel free to contact me at any time with any requests or questions – I love to help any of my professional contacts!

There are a couple of simple techniques you can use to increase your connections on LinkedIn in order to expand your professional network:

1. Research and read articles and blog posts from the LinkedIn experts: I highly recommend Guy Kawasaki’s articles on LinkedIn, and there are many others that are just a Google search away. I read many of these articles and it helped me tremendously.

2. Join Groups on LinkedIn and post connection requests there (if they are allowed) – in LinkedIn groups where they are not officially allowed, you can usually get away with starting a discussion and then placing your connection request at the end or in your signature. This is a very effective technique.

3. If you have a personal blog, place a link to your LinkedIn profile there, as I have done:

https://hubtechinsider.wordpress.com/my-technology-experience/

and then you can get lots of connection requests from that avenue. People like to connect to people in their field of interest or vocation.

4. Start incorporating LinkedIn connection requests into your other online communications (email, facebook, twitter, etc.) to gain more connections.

5. Work on getting your present and past friends and work associates to link with you on LinkedIn.

6. I highly recommend joining an organization known as TopLinked.com, now known as OpenNetworker.com – for $10 / mth., you will begin receiving many requests for connections. I recommend you do research on LinkedIn using the sources I described above in order to decide if a vastly expanded network of professional contacts on LinkedIn is for you. I find that it helps greatly in providing an enhanced “vision” into companies and organizations that you just cannot get with a small number of connections. One of the points of networking is to expand your professional horizons, and that doesn’t really mean connecting to people you already know. Opennetworker.com is also a way of networking, not just some paid service. It means leaving your connections open for viewing on LinkedIn, providing introductions for people from your network of professional contacts, and providing help to people who sincerely request it as you have done. Provide help, information, and networking to your connections. Be a good networker by putting in the effort. It also means never hitting the “I don’t know this user” button; If someone requests a connection you’d rather not be connected with, simply archive the request. Someone reached out to you — don’t repay their efforts with a rude act like hitting “IDK”, as it has repercussions on LinkedIn for people who are simply trying to expand their professional horizons.

Having a large professional network can bring you benefits down the road that you are not even aware of at present. It has already brought me alot of joy. Think of what is called “Network externalities”, or “Network effects”. These concepts are behind the very underpinnings of the World Wide Web and the Internet. Start using them to your advantage.

I hope this helps; Thanks for your nice note Jim!

– Paul

(By the way, if you are currently on LinkedIn and would like to connect with me, please don’t hesitate to send me an invitation to connect on LinkedIn – thanks for reading my blog!)

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Want to know more?

You’re reading Boston’s Hub Tech Insider, a blog stuffed with years of articles about Boston technology startups and venture capital-backed companies, software development, Agile project management, managing software teams, designing web-based business applications, running successful software development projects, ecommerce and telecommunications. You can subscribe to Hub Tech Insider’s RSS feed.

About the author.

I’m Paul Seibert, Editor of Boston’s Hub Tech Insider, a Boston focused technology blog. You can subscribe to Hub Tech Insider’s RSS feed in your RSS feed reader. You can connect with me on LinkedIn, follow me on Twitter, even friend me on Facebook if you’re cool. I own and am trying to sell a dual-zoned, residential & commercial Office Building in Natick, MA. I have a background in entrepreneurship, ecommerce, telecommunications and software development, I’m the Senior Technical Project Manager at eSpendWise, I’m a serial entrepreneur and the co-founder of Tshirtnow.net.

A brief history of the Aspect Ratio April 21, 2009

Posted by HubTechInsider in Definitions, Technology, Video Gaming Video Games.
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common (image) aspect ratio found in video.

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The 4:3 aspect ratio was originally developed by W.K.L.Dickson in 1889 while he was working at Thomas Edison’s laboratories. Dickson was experimenting with a motion-picture camera called a Kinescope, and he made his film 1 inch wide with frames 0.75 inches high. This film size, and its aspect ratio, became the standard for the film and motion-picture industry because there was no apparent reason to change it. In 1941, when the NTSC proposed standards for television broadcasting, they adopted the same ratio as the film industry.

In the 1950’s, Hollywood wanted to give the public a reason to buy a ticket to attend the theatre rather than sit at home watching the TV. Because our two eyes give us a wider view, a wider movie makes more sense. Widescreen formats are formatted much closer to the way we see. Our field of vision is more rectangular than square. When we view movies in widescreen format, the image fills more of our field of vision and has a stronger visual impact. Wider screens gave the theatre audience a more visually engulfing experience. The 16:9 aspect ratio allows TV to move closer to the movie experience.

Want to know more?

You’re reading Boston’s Hub Tech Insider, a blog stuffed with years of articles about Boston technology startups and venture capital-backed companies,software development, Agile project management, managing software teams, designing web-based business applications, running successful software development projects, ecommerce and telecommunications.

About the author.

I’m Paul Seibert, Editor of Boston’s Hub Tech Insider, a Boston focused technology blog. I have been working in the software engineering and ecommerce industries for over fifteen years (I got started with computers really early). My interests include electronics, robotics and programmable microcontrollers, and I am an avid outdoorsman and guitar player. You can connect with me on LinkedIn, follow me on Twitter, even friend me on Facebook if you’re cool. I own and am trying to sell a dual-zoned, residential & commercial Office Building in Natick, MA. I have a background in entrepreneurship, ecommerce, telecommunications andsoftware development, I’m the Director, Technical Projects at eSpendWise, I’m a serial entrepreneur and the co-founder of Tshirtnow.net.

Twitter and Network Effects April 13, 2009

Posted by HubTechInsider in Social Media.
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Image representing Twitter as depicted in Crun...

Image via CrunchBase

Metcalfe’s Law: The value of a network increases in proportion to the square of connections in the network.


It is amazing how many people are out there who still don’t “get” Twitter. Twitter is the most perfect example yet of a medium created for and by network effects.

Guy Kawasaki, former Evangelist for Apple Computer, has called Twitter a “weapon”.

If you can’t quite understand how yet, here is something you might not have thought of:

Did you know a 10,000-person reach FM radio station in a town of 200,000 people is worth $3-15 million?

Now compare that to the list of 100,000+ people (“followers” in Twitter parlance) on Twitter that many celebrities, social luminaries and internet gurus have amassed.

Twitter recently passed Digg in popularity. Since January 2009, Twitter has grown by 1600% in the USA. The growth is exponential each month. Celebrities worldwide are flocking to Twitter.

Twitter is surely big now, but it’s going to be huge. How do I know this?

Look around… watch CNN or FoxNews… these mainstream media outlets are pushing their Twitter accounts onto the viewers. It makes Yahoo’s home page when NBA stars get caught Tweeting during halftime of their games.

In effect, the mainstream media is turning Twitter into the new mainstream media.

But…if you’re not famous, chances are you’re going to get lost in the shuffle on Twitter. Twitter has even rigged it so that these famous people and businesses get even more followers by putting them on a “suggested followers” list for newbies that are just getting started on Twitter.

A few people have offered $100,000 – $250,000 a year to be on that suggested users list. Why pay that kind of money? Because being on that list gets you thousands of new followers daily. So what does that tell you? It should tell you that there’s a lot of money to be made by having a large following on Twitter.

Earlier this year, Jason Calacanis, founder of the search engine Mahalo, offered to pay Twitter $250,000 to place his account on the recommended users list. He later claimed he was “half joking”, but he maintains the investment would have paid off. He calculated that the placement would have steered 5MM to 15MM new followers to his account within two years and that many would have navigated to his web site from there:

“If 10% click on a link once a month…you have about 1 million visits a year…I’d pay $.05 for a follower.”

Calacanis contends that lots of businesses could benefit from such large followings. As an example, an airline such as JetBlue could perhaps offer a discount to the first 1,000 Twitter responders and “never have another empty seat.”

Getting back to my radio station example above: in a lot of ways, a large Twitter following is way more powerful than that radio station’s listener following. Seriously think about that because Social Media is EXPLODING and you need to get in on the ground floor and ride the wave up.

Like any network, you get out of Twitter what you put into it. If you don’t build up your following, or network – your tribe, then you won’t get much out of it. If you engage your following, respond to them and in general, show them that you truly understand how to use this new social networking platform and communications medium, then you will begin to reap the rewards of network effects.

Some definitions I found of “Network Effects”:

– In economics and business, a network effect (also called network externality) is the effect that one user of a good or service has on the value of that product to other users.

– The phenomenon whereby a service becomes more valuable as more people use it, thereby encouraging ever-increasing numbers of adopters.

Want to know more?

You’re reading Boston’s Hub Tech Insider, a blog stuffed with years of articles about Boston technology startups and venture capital-backed companies,software developmentAgile project managementmanaging software teams, designing web-based business applications, running successful software development projectsecommerce and telecommunications.

About the author.

I’m Paul Seibert, Editor of Boston’s Hub Tech Insider, a Boston focused technology blog. You can connect with me on LinkedIn, follow me on Twitter, even friend me on Facebook if you’re cool. I own and am trying to sell a dual-zoned, residential & commercial Office Building in Natick, MA. I have a background in entrepreneurshipecommercetelecommunications andsoftware development, I’m the Director, Technical Projects at eSpendWise, I’m a serial entrepreneur and the co-founder of Tshirtnow.net.

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