Startup School Week 2 Recap: Startup Mechanics

Kirsty Nathoo, Chief Financial Officer and Partner at Y Combinator

The second week’s lecture of Y Combinator’s startup school as taught by Kirsty Nathoo (Chief Financial Officer and Partner at Y Combinator) covered most of the basic issues that most startups will face as they go through the early days of becoming a company. Topics in this lecture looked through the life cycle of a company starting in the early days of formation, going through raising some money, hiring some people and giving out shares. Below is a process of incorporating a company that was discussed by her:

  1. Formation of the Company – This refers to the Why, When, Where and How to incorporate a company.
  2. Assigning Equity – Here, she spoke about allocating equity; purchasing shares; Cap Tables, which records ownership of founder shares; and vesting, which is about rights and restrictions on the repurchase of shares from a founder who may have left the company.
  3. Fundraising – involving raising money on a Priced Round, where the shares are sold for a specific price at the time of that round. And raising money on a non-Priced or Convertible Round, where the investor gives money now but the shares are given in the future. Also, the concept of Dilution where parts of the company are sold to investors.
  4. Hiring – deciding to hire somebody as either a contractor or an employee and paying them according to their hired role; giving equity to employees etc.
  5. Doing Business – These are things you have to do to be a legitimate company including keeping your documents organised, knowing your key metrics and spending investor’s money reasonably.

You can watch the video using the link provided below. Also a full transcript of the lecture is provided here.

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Fortune Chuku

Fortune Chuku is an IT Consultant and Researcher. He is passionate about education and entrepreneurship.