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It turns out that the open office layout I mentioned last week is more controversial than I expected. The main culprits are noise, privacy, and ability to focus for an extended period of time. Since the post, a number of people have suggested different ideas to help provide more options for team members, especially when the phone is involved.

Here are a few privacy ideas for an open office layout:

• Replica British telephone booths throughout the space
• Several BuzziSpace BuzziHoods, which are wall mountable acoustic cocoons (imagine a something like a large square helmet that’s three feet across and is comfortable to stand under while blocking out most sound)
• Multiple Framery modern glass phone booths that are soundproof
• White noise machines that are exceptional at blocking out casual conversations while being barely noticeable

There are a number of privacy options to try out and we’ll be experimenting shortly.

What else? What are some other privacy ideas for an open office layout?

With so many different management tools like the simplified one page strategic plan, quarterly check-ins, and board decks, it’s easy to spend an inordinate amount of time doing management stuff instead of building the business. Only, too often, I’ve seen management tools not commensurate with startup stage.

Here are a few thoughts on management tools related to startup stage:

• Basic management materials should be developed regardless of stage (yes to a business model canvas, no to a business plan)
• Financials should be fairly simple with a focus on cash and burn rate at first and become progressively more sophisticated as the business matures
• Board decks should focus on strategic issues with tactical items and standard data review done in advance on the meeting
• KPIs and goals should always be kept as minimal, measurable, and memorable as possible

Err on the side of simple and let the sophistication of the management tools grow as the startup grows.

What else? What are your thoughts on management tools relative to startup stage?

Terms sheets are relatively short legal documents that outline the proposed high-level details of an investment or acquisition. Over my career, I’ve been involved in a half-dozen term sheets on both sides of the table. While term sheets can be complicated, they’ve been more standardized over the years with open source legal docs like the Series AA Equity Financing Documents from Y Combinator and the AngelList Docs.

Here are a few thoughts on common terms:

• Pre-Money Valuation – This is the value of the company before the investment (so, if $1 million is invested at a pre-money valuation of $2 million, the post-money valuation is $3 million)
• Liquidation Preference – Investors with a 1x non-participating preferred liquidation preference get their money back or their percentage ownership in the event of a sale vs a 1x participating preferred liquidation where investors get their money back plus their percent ownership of the amount left over (double dip). 1x non-participating preferred is most common for seed stage investments while participating preferred is often used when there’s a discrepancy between the desired valuations of the entrepreneur and investor.
• Dividends – Similar to interest payments for the preferred shares, these are used to improve returns. Seed and early stage investments don’t typically include a dividend component.
• Anti-Dilution – If the company raises money in the future at a lower valuation, the previous investors get more shares to account for the new, lower per share price. Weighted average anti-dilution is the most common.
• Option Pool – With each round of funding, investors often require new equity allocations to the employee stock option pool, usually in the 10 – 15% range. Most importantly, the option pool shuffle comes into play and it’s important to model out the difference of the option pool being formed pre or post investment.

Now, there are a number of additional items like pro-rata rights, information rights, preemptive rights, registration rights, and more, but they are fairly standard. Term sheets are best reviewed by experienced startup attorneys and not general practitioners.

What else? What are some other thoughts on the common term sheet items?