# About the Handbook Open Core Ventures' comprehensive handbook for building an open core company. The OCV Handbook is [Open Core Ventures'](https://www.opencoreventures.com/) source of truth for how we create new companies. It includes our recommendations and guidance for building and growing open core companies. This is a public handbook. Providing public access to our internal knowledge base supports our [mission](/about-ocv/mission-and-vision) to enable more people to become founders. The guidance shared in this handbook is continuously updated to reflect the current status of OCV operations and is subject to change. Contribute to this handbook by [submitting an issue](https://gitlab.com/opencore-ventures/ocv-handbook/-/issues). {% hint style="warning" %} Do not rely on this handbook for legal, investment, or tax advice. Do not add personal or confidential information. {% endhint %} ## Quick Links

Startup Manual

Advice for founders building open core companies./spaces/vRFdFk6Bf7sA03777yVY/pages/LThc2RqOxBKU56Qt3TMy

Company Operations

Operational procedures and guides for OCV founders./spaces/F2Lpo0yTIjyJ7q0Km0D5/pages/xSKACgaFjsHdWkvrL7EZ

Catalyst

Guidance on starting a new open source project./spaces/PoqwmKdqT60DC9KPEDeB/pages/LThc2RqOxBKU56Qt3TMy

OCV Employees

Handbook for internal OCV policies and operations./spaces/pN2JQhQnR6b7hpOuZkYO
## How to use the handbook OCV founders, please consult the OCV handbook often. Use it as a first line of support. If something isn’t clear, ask for clarification. The OCV team uses the handbook every day to provide shared context: 1. **Discussions:** Include a handbook link when adding discussion topics to agendas. Document any resulting decisions or changes. 2. **Feedback:** Include a handbook link when asking for guidance or feedback on an existing process, guideline, or startup advice. 3. **Onboarding:** The majority of founder onboarding is self-serve via handbook links. Share handbook links when following up on onboarding tasks. 4. **Answering questions:** Provide a short answer covering any situation-based nuance and a link to where the question is covered in the handbook. Add the answer if it isn’t already in the handbook. # Open Core Open core is a business model for monetizing open source software. Open core companies provide an open source core product and a commercial, source-available premium product. {% embed url="" %} **📹** [**Watch Sid’s full presentation on Commercial Open Source Business Models**](https://www.heavybit.com/library/video/commercial-open-source-business-strategies/) Open core is a hybrid software development and licensing model that includes open source and proprietary software. It typically consists of an open source core with proprietary features and functionality built around it. The open core model provides a path for commercializing open source projects. All of the code is source-available, allowing everyone to contribute to the whole, but you must pay to use certain parts of the software. An open core company must have proprietary intellectual property to monetize. Open core leverages an existing open source project and builds a commercial version with proprietary features around it. Think of the open source core as a distribution and R\&D strategy, and the commercial, proprietary features as a monetization arm. Software companies that meet the following three criteria are generally considered open core. {% stepper %} {% step %} **Build on open source.** The open source version is actively developed alongside a commercial product. {% endstep %} {% step %} **Contain proprietary intellectual property.** Open core companies must have proprietary IP to monetize. {% endstep %} {% step %} **All code is source-available.** Users can contribute to and modify the proprietary code in addition to the open source code, but must pay a licensing fee or subscription to use it. {% endstep %} {% endstepper %} Open core is not a support and services model. Support and services-based COSS companies (Red Hat) only produce open source code but charge subscriptions for support, training, and implementation services. OCV does not start support and services-based COSS companies. ## Advantages of open core Commercial open source software companies tend to [outperform](https://cossreport.com/) closed-source software companies. Companies built around open source software raise more money, faster, and at higher valuations than solely proprietary software companies. They benefit from early signals of product-market fit, faster research and development cycles, and greater user trust. {% stepper %} {% step %} **Early signals of product-market fit.** Open core companies come with a pre-packaged community, making it easier to find early customers and hire passionate employees. Product adoption is faster because people can use it for free, and the free version works. {% endstep %} {% step %} **Faster research and development.** Building with open source has the benefit of a direct line of communication with the community. The community accelerates improvements through feedback, feature requests, and code. {% endstep %} {% step %} **Greater user trust.** As OSS proliferates the market, users expect to be able to inspect, modify, and contribute to the software they use, disadvantaging closed-source software companies. Proprietary code in an open core product is source-available. {% endstep %} {% endstepper %} ## Open core is a sustainability model for open source Open source software underpins modern software, but the industry’s lack of monetary support for creators and contributors has created a [sustainability problem](https://www.opencoreventures.com/insights/someone-has-to-pay-for-the-domino). As a project grows in popularity, many maintainers find they can’t support the “weight” of support, feature, security, and other requests. As projects become more popular, a cycle of growth emerges: 1. OSS creators/maintainers make something awesome 2. Early adopters arrive and contribute, work with minimal documentation, and help the project out 3. Late adopters come on the scene but are less likely to contribute, expect better docs, are more likely to ask questions 4. Mainstream adopters show up and expect backward compatibility, consistent performance, security, and requested features to be present For successful projects, the software lifecycle represents an increasing level of time and effort. Almost all successful projects will feel this pain. How they react is the difference between happy maintainers and burnout, and the line between sustainable and unsustainable software. At OCV, we think open core will be the most common way to make open source projects sustainable. ## Open core concerns {% tabs %} {% tab title="Explotation" %} Some people believe the open core model exploits open source. We believe open core is a way to sustain open source by allowing passionate creators to monetize their efforts. Open source users benefit when a company backs an open source project via an open core business model because dedicated resources are allocated toward supporting the open source version. Contributors can get paid to work on the project. {% endtab %} {% tab title="Self-competition" %} A common concern is that open core companies are competing against themselves. In our experience, the opposite happens: Developing an open source version of the product accelerates adoption and acts as an on-ramp to the paid version. {% endtab %} {% tab title="Pirating" %} There is a risk of increased piracy when making proprietary code source available. The risk is generally low and outweighed by the community contributions and customer trust you will receive in exchange for providing access to the code. Those willing to pirate software are unlikely to pay for software regardless. Most companies do not pirate software. {% endtab %} {% tab title="Hyperscalers service-wrapping" %} Open core companies do face the risk of service-wrapping from the hyper clouds. Freedom to create and compete is part of the open source ethos. An open core company indeed opens itself to more competitive risk than a closed-source product. The benefit of building with open source is innovation speed and the tradeoff is allowing direct competition. In the end, the users determine which product is best. The best way to manage this risk includes developing application software and adopting a buyer-based pricing model. {% endtab %} {% endtabs %} ## Origins of open core Andrew Lampitt [coined the term](https://alampitt.typepad.com/lampitt_or_leave_it/2008/08/open-core-licen.html) in 2008 after he noticed there was confusion in the industry around dual licensing strategies, and as a result, they were getting a bad rap due to what was perceived as bait-and-switch tactics. The problem, he argued, was that dual licensing doesn’t accurately describe the approach as an emerging business model. Open core does not claim to be open source—it is a business model that builds alongside an open source project. # First Principles When a company takes VC money, the potential exit outcome can be significantly larger, but it comes with a big risk of failure and expectations of driving large returns. OCV founders sign up for a big vision for their company when taking on venture investment. ## Growth solves most problems Growth and speed are what define a startup, not simply founding a company. Startups are designed to gain momentum, grow fast, and use that growth to overcome obstacles. Don’t lose momentum. Cultivating a sense of urgency for yourself and the company at large is one of the most important culture-defining elements you can impose as a founder. Having a sense of urgency means you don’t wait to do things. It’s a proactive, action-oriented mindset versus a reactionary mindset. Set the expectation that your company addresses situations as soon as possible and doesn’t wait to take action. There will be problems that arise that you are tempted to slow down to resolve, but mostly, you will need to find short-term, quick fixes and come back to the problem later because you need to get to scale to solve the problem. **The only way to overcome a problem later is to grow fast now.** If you grow as a startup, you can hire and fundraise to solve the problem. If you stay the same size, the company isn’t able to hire and fundraise, and the company will ultimately no longer be a startup and likely fail. Whatever you are facing now, if you grow, you can attract more money, automate more, hire better people, and overcome it later. ## Unscalable behaviors drive traction “[Do things that don’t scale](http://www.paulgraham.com/ds.html)” is the opposite mentality of “build it and they will come.” It means that in the early stages of building a company, you will need to do a lot of manual work to build momentum that will make your start-up take off. It’s the most common advice given at Y Combinator and can be the difference between success and failure. Examples of high-impact, unscalable behaviors: 1. **Solve problems manually until you can automate them.** For example, recruiting users manually. You can’t wait for users to come to you; you have to go find them. The same is true for early marketing. 2. **Growing 20% WoW.** Lean into the power of compound growth. Rapidly compounding growth from a lower initial customer base can drive large numbers of users and revenue. 3. **Delight your customers.** Go out of your way to make the customer experience exceptional. Writing handwritten notes may not scale, but adopt the mantra that “if you go out of your way to make existing users super happy, you'll one day have too many to do so much for.” 4. **Exceptional attention to users.** Over-engage with your early users and aim to get something in front of users early. Feed the feedback loop. “It's not the product that should be insanely great, but the experience of being your user.” 5. **Focus on a deliberately narrow market to start.** Get really good a serving a specific market to start and then expand. If you try to solve everyone's problems, you end up solving no one’s problems. ## Founders own outcomes Founders are accountable for the decisions and outcomes of their company. All decisions and outcomes stop with you. Set goals that you believe in, and be fully invested in accomplishing the goal rather than routinely going after what OCV suggests. We have a good idea of what you should go after, but you can disagree and strive for whatever you believe will drive long-term success. You will need to rally teams around the goal, and people will be able to tell if you aren’t personally invested in achieving it. If goals aren’t being met, values are being ignored, or progress isn’t being made, you are accountable for fixing it. When the suggestions made by OCV are not aligned with the direction of the decisions made by the highest C-level person at the company, any resulting consequences should be resolved by the company. OCV does not override the decisions of the highest C-level person at the company. The CEO makes final decisions and can never point up. You don’t want to be in the position where you are explaining to your reports that the reason you did something is “someone higher up said to do it.” For example, a company has layoffs, and the CEO says, “The board made us do it.” That would be a very weak stance to take. Either you own the decision or don’t do it. Founders are the final decision-makers. # Project & Founder Selection ## Project selection OCV’s research team uses a standard set of criteria to assess an open source project’s commercial viability. Our research criteria are based on existing traction—typically the number of GitHub stars and monthly pull requests—and an overview of the potential market opportunity, trends, current competitive landscape, etc. Our research and outreach process is based on years of experience reviewing projects and building open core companies. While our research is a good starting point, it is not exhaustive, and there may be many other paths to success. We believe the best path is to just get started, and we follow the typical startup-building model of hypothesizing, testing, and iterating often and quickly. ## Founder selection ### Recruiting CTOs Ideally, we can recruit the original project author—and current maintainer—as the CTO. When the original author is unavailable or difficult to identify, we recruit a core maintainer or top contributor. In some cases, we recruit an engineer from outside the community with the technical depth to quickly become a leading contributor. Founding CTOs are offered a starting salary (we often match your current salary) and granted [10-25% founder equity](https://handbook.opencoreventures.com/ocv-employees/vc-ops/portfolio-company-formation-process/incorporation-steps-1-8#block-6fc236889a8940a098c4509a22714f35). We partner with you to build the narrative and early traction needed to recruit a CEO and raise follow-on capital. ### Recruiting CEOs We sometimes recruit a CEO within a couple of months of launch; in other cases, it takes a year or more. We look for former founders—often from the YC community—who have built 0-to-1 products, led growth, raised capital, and navigated the challenges of early-stage company building. The best CEO candidates already want to start another company. We give them the ability to skip the early foundational work—finding an idea, a co-founder, early investors, and first users— and offer a livable salary and [equity](https://handbook.opencoreventures.com/ocv-employees/vc-ops/portfolio-company-formation-process/incorporation-steps-1-8#block-6fc236889a8940a098c4509a22714f35). It's less ownership than starting from scratch, but the right candidates place significant value on the early momentum. {% embed url="" %} ### Outreach process 1. OCV completes an internal research doc and establishes the basis for commercialization. 2. OCV contacts a potential founder and schedules an informational meeting. 3. OCV schedules 1-2 additional calls to discuss the details of starting the business. 4. If there’s mutual interest in proceeding with forming a new company, OCV completes its internal approval process. This may include a conflict of interest check. 5. Once approved, OCV sends the founder an indicative offer letter and begins the [formation process](/how-we-work/company-formation#formation-process). The outreach process typically includes 2-3 live calls with our team to discuss [OCV’s model](https://www.opencoreventures.com/about), potential commercialization plans, and answer questions. The process from start to finish can vary in length depending on availability and complexity. We are happy to take more calls and answer questions throughout the process. ## Evaluating our model OCV’s model differs from the typical VC model, making it difficult to compare with other venture models. Our model includes highly personalized and ongoing advisory and support from company formation through the Seed fundraising process. We understand that it's natural to seek advice when assessing a new opportunity, and caution that without a full understanding of our model, it may be difficult for someone to offer educated advice. We encourage you to ask as many questions and request as many calls as needed when evaluating an opportunity with OCV. ## Requesting references from current OCV founders We understand founders would like to speak with other OCV companies as a reference as part of their decision-making process. To best respect our founders’ time, we ask that you allow us to make direct intros after we have a mutual interest in moving forward. # Company Formation & Support The process of launching a new company takes about five weeks. After formation, we continue to support the company by leading the CEO search, helping companies gain traction, and guiding the fundraising process. ## Formation Process The company formation process begins once the founder(s) have signed the Founder Offer Letter. OCV will initiate the legal incorporation process, bank account setup, and set up core business systems and equipment. OCV manages the process end-to-end and will notify founders when they have action items to complete. It typically takes a minimum of 6 weeks to complete the company formation process. {% stepper %} {% step %} ### Legal incorporation The legal incorporation process takes 2-3 weeks from the day founders sign their engagement letter. The process includes drafting and executing formation legal documents, receiving an Employer Identification Number (EIN), and filing the IRS letter required for a bank account application. It typically takes about two weeks to finalize legal documents, and a week for DE filing. Founders will establish their domain (purchase or transfer) at this stage. OCV will transfer existing domain names to the company, if applicable. Founders can start building their website at this stage. {% endstep %} {% step %} ### Banking and equity funding Bank account setup and funding take 1-2 weeks from the day we receive the company's EIN and IRS letter. An EIN is required for bank account setup. Founders may be required to complete KYC steps for the bank account application. It typically takes three days for bank account setup, one day for common share purchases, and two days for SAFE funding. Common shares must be purchased by OCV and the founders **before** OCV SAFE funding. Founders will file their 83b Election to the IRS and confirm with the Legal Team within 30 days of the common share purchase. {% endstep %} {% step %} ### Corporate credit card and EOR setup Corporate credit card and employer of record (EOR) setup takes 1-2 weeks from the day the bank account is funded. Founders may be required to complete KYC steps for a corporate credit card. Founders will need to sign the EOR contract and complete founder onboarding in the EOR system. {% endstep %} {% step %} ### Core business systems setup Systems access happens concurrently with other formation steps. Founders typically get access to administrative-related systems (digital workspace, email, internal messaging) the week after signing their offer letter. Banking, equity, and people management systems access will follow setup. {% endstep %} {% endstepper %} ## Formation fees OCV may incur certain startup expenses on the Company’s behalf during the formation process. Incurred expenses will be reimbursed to OCV at cost. Amounts should be minimal unless a special domain purchase was required. Once the Company’s finance systems are set up, all expenses will be billed to the Company directly. OCV will invoice companies for reimbursement for actual costs incurred. We do not charge companies any fees. ## Applying to YC YC is a big part of our DNA given Sid went through the program, and we know how much value it can add to a company. We encourage all of our portfolio companies to [apply to Y Combinator (YC)](https://www.ycombinator.com/apply). If you get accepted to YC, we'll increase the founders’ equity grant by 10% relative to the existing grant. For example, a 20% grant becomes 22%. This adjustment is intended to offset the estimated 7% dilution from YC's investment. Many of OCV’s founders aren’t looking to start companies when we first reach out. We become the virtual co-founder that enables you to focus on building, often starting with increasing the velocity of your contributions to the OSS. We then help get the company into a shape and trajectory that can attract YC and other investors. We believe that companies that go through YC are, on average, 100% more valuable in their next fundraising round, and we think you will benefit from the experience and network for the rest of your life. ## Post-external funding After a company raises its Seed round, we step down from active board participation and transition to a monthly touchpoint cadence with ad hoc support as needed. This "out of the nest" milestone signals the company is ready to scale independently. Post-Seed OCV companies retain access to OCV resources. # Board of Directors A Board of Directors (Board/BoD) is the governing body of a company. The Board’s role is to provide strategic governance and oversight, serving the organization’s stakeholders. Core activities include approving annual budgets, measuring goals and achievements, and hiring and managing the executive team, including compensation. OCV holds the single board seat for Pre-Seed companies. After a company raises its Seed round, we step down from active board participation. ## Fiduciary Duty Board members (and corporate officers) are fiduciaries who are legally required to put their principals' (such as shareholders/stakeholders) or beneficiaries’ interests above their own. The Board and corporate officers have 3 primary legal duties: ### Duty of Care Fiduciaries have the obligation to provide a level of care that an ordinarily prudent person would exercise in a similar situation. To exercise a duty of care, fiduciaries should make informed decisions, seek advice when appropriate, consider the consequences of their actions, and actively stay informed on company affairs. ### Duty of Loyalty Fiduciaries must act in the best interest of the company and its shareholders rather than in their own self-interest. Fiduciaries may never use information obtained through their position or leverage corporate advantages for personal gain, should avoid conflicts of interest, and should only utilize company resources in good faith towards the best interests of shareholders. ### Duty of Obedience Fiduciaries must not act inconsistently with and should ensure their actions are aligned with the company’s mission. ## Actions that require board approval Founders of OCV companies should be aware that the following actions require approval from the company’s Board: * Any amendments to corporate bylaws or the company’s certificate of incorporation * Equity grants: Grants or transfers of any company equity in the form of stocks, options, or warrants to any person or organization * Any sale or distribution of the assets of the company * Latest 409A valuations before issuing stock options * Any distributions to shareholders * Any borrowing or lending * Annual budget approval * Senior management changes in employment status or amendments to their employment contract (including for the CEO) * Employment contracts representing $150,000 or more per year * Changes to the company’s employee benefit plans * Any restructuring of the company, including dissolution * Any agreements materially important to the company. Partnerships and contracts above $50k are considered material. ## Board meetings & minutes The legal team keeps a minutes book for all board meetings and serves as the secretary of the meeting. For single-member boards, there will be no formal board meetings, as most corporate matters are approved via written consent. There is no formal requirement to file any meeting minutes with the state. # Onboarding {% hint style="info" %} Founder onboarding checklists are in the `Onboarding` tab in your company's Office Hours doc. {% endhint %} Onboarding begins immediately after signing the indicative offer letter. Your official first day is typically the “start date” listed on your offer letter. Founders will have tasks to complete before their official start date and may opt to have their first [individual office hour](https://handbook.opencoreventures.com/founder-experience/office-hours) before their first day. ## Slack Slack is OCV’s preferred communication tool. Each company has two OCV channels: 1. `ocv-[company name]` for general questions and communicating with the OCV team. 2. `accounting-[company name]` for finance-related discussions. Use Slack as the first line of communication with the OCV team. Avoid DMs as much as possible and keep the majority of conversations in the open company channel. Always @ mention GPs if you want to call their attention to a particular message or are following up on an action item. The OCV Slack channels are intended for executive-level company communication. Sensitive company matters are frequently discussed in this channel, and hires outside of the executive team should only be invited to the company’s specific Slack channels. New founders will be welcomed and introduced to other OCV founders in a shared “OCV Founders” channel on their first day. The “OCV Founders” channel is where you can find important updates and information from OCV. ## [83b election](https://handbook.opencoreventures.com/ocv-employees/vc-ops/portfolio-company-formation-process/incorporation-steps-1-8#block-a32446b549b4440abfcc3382f8a66b62) Founders who have purchased shares or elected for early exercise must file their 83(b) elections through physical mail or online and provide proof of mailing/submission (postmarked before the 30-day deadline) to the legal team. Beyond personal tax implications, 83(b) elections can affect a company's future tax withholding requirements—a key due diligence item during later financing rounds. ## [Business systems access](https://handbook.opencoreventures.com/company-ops/business-systems) Account and system ownership of all admin systems will be transferred from OCV to the company founders. Founders should confirm access to all core business systems on their first day. If you have trouble accessing a system, reach out to OCV in our shared channel. ## Company laptop purchasing Full-time employees (FTEs) must work on a company-issued laptop or computer equipment. FTEs may purchase a company-issued laptop using their personal corporate credit card. Laptops should be purchased and acquired before your official first day. Contractors should use their own equipment for work. ## Prepare for Office Hours Review the [Office Hours](/founder-experience/office-hours) handbook page and prepare your agenda. A link to your individual office hour agenda can be found in your company’s Pulse dashboard. The first two office hour agendas are pre-populated. OCV partners typically want to discuss the project and its background, initial commercialization, setting your first goal, and will introduce the Building Blocks concept. Founders will be asked to share their 2-sentence company description during [Group Office Hours](/founder-experience/office-hours#group-office-hours). We recommend spending time writing a first draft on your first day. The description will be workshopped during individual office hours, which may occur before or after your first GOH, depending on your start day.New CEOs should review the existing 2-sentence description and practice delivering it and/or make changes to it. Remember, founders are their company's biggest cheerleaders, so speak slowly and with genuine enthusiasm when you share it. # Office Hours Office hours are weekly meetings with OCV partners. The goal of these meetings is to help you make meaningful week-over-week (WoW) progress. Office hours with OCV partners should be highly leveraged. Make every minute count by being highly prepared and specific. OCV schedules all recurring meetings and creates company agenda docs. OCV companies at any stage can request additional office hours as needed. All requests for meetings or changes to existing meetings (time, format, agenda) should be made through OCV. {% hint style="warning" %} OCV Founders regularly attend group meetings with other founders, and confidential information may be shared. This information is not to be shared. {% endhint %} ## Individual Office Hours Individual Office Hours (IOH) are 1:1 meetings with OCV partners. This is your time to explore high-priority topics in depth. You should review onboarding tasks before your first IOH and ask any administrative questions in your company's Slack channel, so you can make the best use of the OH time. ## Biweekly/Monthly Group Office Hours Biweekly Office Hours (BOH) and Monthly Office Hours (MOH) are meetings with OCV partners and other OCV company founders. BOH and MOH focus on growth and goal setting. Company CTOs and CEOs are invited to join; don't add additional team members to BOH or MOH. BOH and MOH include 4-5 companies at a time to encourage peer learning. Group pairings are loosely based on the company's stage of development and/or industry focus. Topics that require more time should be moved to the next IOH agenda. ## Meeting etiquette 1. Always have an agenda prepared ahead of the meeting. OCV will help prep and review agendas for your first few meetings. 2. Submit your KPIs in Pulse ahead of your meeting. You'll receive a Slack notification each week linking directly to the submission page. Your inputs push automatically to the Reporting Dashboard at the top of your OH agenda doc. 3. Ensure all meeting attendees have access to your agenda. 4. Add a header for each new meeting that includes the meeting date and lists attendees. 5. Use a numbered list for agenda items. A numbered list makes it easy to reference where you are in the agenda. 6. Answers to common questions will be provided via links to the handbook or blog post. Read the provided material before the meeting and adjust your questions to address any follow-up questions or company-specific nuances you’d like to cover. 7. Founders and any additional meeting attendees are expected to take notes in the doc **during** the meeting. This helps clarify understanding in real time. 8. Founders should confirm takeaways, action items, and timelines before the end of the call. ## Meeting format Pre-Seed companies attend weekly Office Hours, which alternate between OHs (25 minutes) and GOHs (50 minutes). Each company has \~10 minutes to cover agenda items during GOH. Office Hours meetings follow a standard format: 1. Read your two-sentence homepage description 2. Review growth updates 3. Open discussion Companies that have successfully fundraised (Post-Seed companies) move from a weekly cadence to a monthly cadence and follow the standard meeting format. Post-Seed companies don't have regularly scheduled IOHs, but may request ad-hoc 1:1s. ## Agendas **Every meeting must have an agenda attached to the meeting invitation. No agenda = no meeting.** Agendas should be prepared a day before the meeting. Use the ["By Date" agenda format](https://handbook.opencoreventures.com/ocv-employees/meetings#by-date-agenda-format) to track Office Hours meetings in your Company Office Hours document. All OH agendas are kept on a single page, so it's easy to review and reference past meeting agendas. Each week, the agenda for both IOH and GOH should start with week-over-week goal progress, including the week-over-week growth rate: `# WAUs / % WoW growth` 1. Previous week’s goal: *1,200 WAUs / 20% WoW growth* 2. Previous week's performance: 1*,100 WAUs / 10% WoW growth* 3. Next week's goal: *1,320 WAUs /* *20% growth* Founders should clearly indicate whether the previous week’s goal was met by highlighting the outcome: * **Green** if the goal was met * **Red** if the goal was not met **Yellow** should not be used. If it is unclear whether a goal was met, that indicates the goal was not defined clearly enough and should be refined for the following week. Goal progress should focus on a single, measurable goal and be tracked weekly. Post-Seed companies will report month-over-month progress. Include any additional goals/metrics in a separate section titled “Secondary metrics” when relevant. Evaluate progress as either achieved or missed. If it’s unclear whether the goal was achieved or missed, you may need to reframe your goal. OCV will pressure test your next goal during office hours (i.e., is it the right goal, is it ambitious enough). ### Agenda Template **How to insert this template into your OH agenda:** Use this [step-by-step guide ](https://scribehow.com/viewer/Insert_a_Meeting_Template_Into_Google_Docs__9hWMACAgRgWB7zx_9h2Abw?utm_campaign=%5BEVENT%5D+View+Notification+Experiment\&utm_content=Anonymous+View\&utm_medium=Email\&utm_source=customer.io)to use the OCV Template script to insert the agenda template into your OH agenda. {% tabs %} {% tab title="Agenda template" %} *Use this template for all OH agendas. Always format your agenda as a numeric list. Don't add extra headers or tables. Images/screenshots are added as a line item.* #### Date | Group Office Hours 1. Goal Progress\* 1. Previous week's goal *(what you said you would do at the last meeting)* 2. Previous week's performance *(if missed, include % achieved)* 3. Next goal *(singular, binary, measurable)* 2. Growth Plan *(how will you achieve your next goal)* 3. Open Discussion *\*Post-Seed companies should track **monthly goals** in their agendas.* {% endtab %} {% tab title="Example" %} #### *Nov 2, 2025 | Group Office hours* 1. *Goal Progress* 1. *Planned: Increase DAUs from 6,700 to 8,070 (10% WoW growth)* 2. *Missed: Added 900 DAUs (67% of goal)* 1. *1,200 new sign-ups, 1,000 DAUs* 2. *100 DAU churn* 3. *Next goal: Increase DAUs from 7,600 to 9,120 (10% WoW growth)* 2. *Growth Plan (how will you achieve your next goals* 1. *Launch a new reactivation email campaign* 2. *Launch “invite your team” functionality* 3. *2 influencer videos and a guest blog post scheduled* 3. *Open Discussion* 1. *Google Ads continues to be our biggest source of traffic and new signups.* 2. *We’re testing removing the signup wall and letting users try out the product before creating an account. Users will be prompted to sign in to save or share.* 3. *Started discussions with the first enterprise plan customer.* 1. *SSO requirement; scheduled to ship in 2 weeks* {% endtab %} {% endtabs %} ## Reporting Dashboard Every company has a Reporting Dashboard pinned at the top of its Company Office Hours doc. All information in the Dashboard is automatically populated from Pulse. Review your dashboard at the start of the month to ensure accuracy. Use the standard Reporting Dashboard template:
CategoryNumberLast updated
Cash on Hand*$950K2026-01-12
Cash burn*Dec: $52K
Jan projection: $65K		2026-01-12
Runway12 months2026-01-12
TeamName, Title, LinkedIn2026-01-12
KPIs*

Weekly (MRR / WAUs)

Week of Nov 14, 2025:

$30K / 13,000

Week of Nov 21, 2025:

$35K / 16,000

Week of Nov 28, 2025:

$40K / 20,000

Week of Jan 4, 2026:

$55K / $26,000

----------------------

Monthly (MRR / WAUs)
Oct: $10K / 5,000
Nov: $20K / 10,000
Dec: $40K / 20,000
Next Month Goal: $80K / 40,000

2026-01-12
*\*Post-Seed companies only need to include cash on hand, monthly burn, and KPIs.* 1. **Cash on hand:** Utilize the month-end Accounting financial statements via the Bank Recon tab for the latest “Total Bank" statement balance. Round to the nearest $10k. 2. **Cash Burn:** Utilize the month-end financial report via the Month CF for the latest “Net cash provided by operating activities.” Use this as the latest month's burn. Provide a projection for the next month's burn by accounting for changes in hiring or spending (e.g., new contractor starting or new ad campaign launching). Round to the nearest $5k. 3. **Runway:** Current runway is calculated as (Cash on Hand - $200K) / Cash Burn. We include assumed dissolution costs of $200k. 4. **Team**: Include each team member's full name and job title/function (e.g., SWE, designer, writer, etc.) and link to LinkedIn profile. Include contractors and link to the contract in the Shared Drive. 5. **KPIs:** Latest North Star metric for growth, and any secondary metrics that may be helpful. This section will display both weekly and monthly KPIs: the last three months' official numbers once books are closed and the goal for next month, and the last four weeks actuals. KPIs are submitted in Pulse and pushed automatically to the dashboard. ## Quick Fire Sessions Quick Fire Sessions are monthly portfolio-wide meetings with OCV partners. They cover a single startup topic and include a demo and Q\&A portion. Demos should be <5 minutes and show an implementation of the discussion topic, and questions should be specific and actionable. For example: 1. If the topic is pricing, demo your pricing page and ask questions about unit economics. 2. If the topic is mid-funnel conversion, demo your signup flow and ask questions about the user experience. 3. If the topic is repo structure, demo your repo and ask questions about integrating open source and proprietary code. The forum is curated for Pre-Seed companies, but Post-Seed companies are welcome to join. {% embed url="" %} # Runway A company's runway is the amount of time it has until its funds run out. OCV companies are funded with \~18 months of runway to achieve initial traction and reach an inflection point for fundraising. Faster growth leads to a higher valuation and increases your odds of successfully fundraising. It's fine to let runway drop low when approaching real traction—VCs invest in momentum, not cash reserves. Prioritize achieving "lift" (meaningful traction) rather than simply extending runway for an arbitrary amount of time. Identify the most critical inflection point you need to reach to fundraise, and structure your spending to achieve that milestone. The #1 mistake founders make is thinking you can extend your runway to success. This leads founders to aim for maintaining a long runway instead of gaining traction as quickly as possible. Preserving your runway seems efficient, but it’s the opposite. Companies need speed to raise their next round. Using cash to increase the speed of growth is the way to go, even if it shortens your runway. Keith Rabois (Khosla Ventures) explains further, > *“If you think about lift in a plane context, a company is only valuable if you achieve lift. Runway is a tactic for achieving lift, and you may need to extend the runway so that you have more time to get lift. But unless you’re actually achieving lift with that extra time, it doesn’t help you.”* {% embed url="" %} ## Burn rate Burn rate is the speed at which a startup spends its cash. It determines the company's runway. Spend to accelerate growth—what do you need to spend to grow 20% WoW? If increased spending on one activity has a high probability of generating a lot of usage and/or revenue, take the risk. Measure the speed and potential payoff of actions and go after the activities with the quickest payoff. ## Capital efficiency Capital efficiency measures how effectively a startup uses its invested capital to generate growth. It measures how much value you can create from each dollar spent. Sustainable unit economics is important—spending more than $1 on customer acquisition to generate $1 in revenue is bad business. Evaluate decisions by this standard: Are you spending the minimum to drive maximum revenue? Capital efficiency means finding many low-cost, high-revenue activities—not refusing to spend. # Building Blocks Building Blocks are the compelling points that create the foundation of your company's story—your vision, market, customer, and product. They are the memorable facts, anecdotes, data, and insights that make people believe in what you are doing. You’ll use Building Blocks to create a compelling company story that communicates an exciting direction. Your company story will help you recruit first hires, land customers, and fundraise. OCV will help you start your Building Blocks during Office Hours. ## Two-sentence company description The goal of the two-sentence company description is to make it very clear what your company does and to establish credibility. It's forward-leaning and provides enough information to pique people's interest in learning more. The target audience for the two-sentence description is investors, rather than potential users or customers. **Two-sentence description formula:** 1. The **first sentence** explains what you do using common market terms. For example, "Duplicati is a secure backup platform for managed service providers." 2. The **second sentence** explains why people pick you and includes proof points. For example, "MCPJam is used by developers at Asana, HeyGen, London Stock Exchange to test their apps for production readiness." Name the **open source project** you’re building around if it’s well known and an important part of your growth story, and/or you are the creator, or the company is the lead maintainer. For example, *"Ray AI makes it easy to deploy agentic workloads in Ray."* Name your **biggest closed-source incumbent** if they are a household name and customers don't love it. For example, *“Authentik is the open source alternative to Okta."* You'll rapidly iterate on your two-sentence description at the start, but should quickly lock in on one version. Continue to make marginal changes, but you shouldn't be redoing the two-sentence pitch every week. Everyone in your company should be able to recite the two-sentence description. Building the habit of effectively and succinctly describing your company will benefit you for the entirety of your tenure as a founder. Even CEOs of well-known public companies typically begin with a two-sentence description when introducing their company. ## Worksheet Your worksheet is a workspace to collect relevant information about your company and track proof points. It’s a knowledge center where you can draft your value props, document anecdotes, and collect information. Connect your worksheet to an LLM to generate content or get ideas. The more up-to-date you keep the worksheet, the better output you’ll get. The worksheet is pre-populated with six building block categories: product, value props, market, unique insight, traction, and team. Use the prompts below to start collecting information for each category. **Building Block Categories and Prompts**
CategoryPrompt
Product
  • What does your company do?
  • How do you do it differently?
Value prop
  • What problem are you solving?
  • How is the pain addressed today?
  • How do you solve this problem?
Market
  • Who is making a lot of money in this space right now?
  • What is your target customer, how many are there, and what is your ACV?
  • TAM, SAM, SOM
Unique insight
  • Why now?
  • What is a non-obvious or contrary opinion do you hold about your market?
Traction
  • How popular is the open source project?
  • How much progress have you made?
  • How fast are you growing?
Team
  • What’s your relationship to the open source project?
  • What special expertise does the team have?
Build a habit of consistently adding to your worksheet by documenting new insights, feedback, and major milestones. For example, track the growth rate metrics you’ll share in the [monthly investor update](https://handbook.opencoreventures.com/startup-manual/fundraising/investor-management#monthly-investor-updates), add notable takeaways from customer calls, links to competitor news, etc. ## Company Story The `company story` tab is where you will draft and workshop your company story. A company story is a narrative that communicates who you are, what you do, how you do it, why you do it, and who you do it for. You’ll use the most compelling points from your worksheet to create your company story. Compelling points are unique to you and immediately resonate. They help audiences connect with your vision, purpose, and momentum. ## Content ideas The `content ideas` tab is a workspace for brainstorming and tracking content ideas. These ideas can be anything from website copy updates to blog posts and videos. # Vendor Deals OCV has pre-negotiated perks and discounts with vendors across the tools and platforms most commonly used by early-stage companies. If you're aware of a tool or partnership that would be valuable to the portfolio, let the OCV Ops team know. Log in to access information and access guides for the following vendors: 1. [Anthropic](broken://pages/T2kGLtWWckepz5Dg3SEO#anthropic) 2. [AppSignal](broken://pages/T2kGLtWWckepz5Dg3SEO#appsignal) 3. [AWS](broken://pages/T2kGLtWWckepz5Dg3SEO#aws-activate) 4. [Carta](broken://pages/T2kGLtWWckepz5Dg3SEO#carta) 5. [Circleback](broken://pages/T2kGLtWWckepz5Dg3SEO#circleback) 6. [Customer.io](https://handbook.opencoreventures.com/founder-experience/pages/T2kGLtWWckepz5Dg3SEO#customer.io) 7. [GitHub](broken://pages/T2kGLtWWckepz5Dg3SEO#github) 8. [Google Cloud Platform](broken://pages/T2kGLtWWckepz5Dg3SEO#google-cloud-platform) 9. [Microsoft Azure](broken://pages/T2kGLtWWckepz5Dg3SEO#microsoft-azure) 10. [Modal](broken://pages/T2kGLtWWckepz5Dg3SEO#modal) 11. [Neon](broken://pages/T2kGLtWWckepz5Dg3SEO#neon) 12. [OpenAI](broken://pages/T2kGLtWWckepz5Dg3SEO#openai) 13. [PostHog](broken://pages/T2kGLtWWckepz5Dg3SEO#posthog) 14. [Scarf](broken://pages/T2kGLtWWckepz5Dg3SEO#scarf) 15. [Stripe](broken://pages/T2kGLtWWckepz5Dg3SEO#stripe) # Operating Principles Our framework for making decisions and taking action, built on years of experience and learning what success looks like for OCV’s portfolio companies. ## We build for venture-scale Many project maintainers or potential founders ask us early on about our expectations. For example, they ask if we will demand they become profitable early, or if we “flip” companies quickly, etc. Like other venture firms, we only have one goal: when we start a new company, we expect that the company *eventually* has the potential to become huge and achieve venture-scale returns. This usually means $1B+ valuations or IPO, and over $100M in revenue. OCV companies strive to build big companies that achieve high revenue targets and growth rates—founders are signing up to swing for the fences and push the pace on how fast they can grow the company. Raising venture capital is a vital tool needed to accelerate and fund growth. Founders need to be prepared to fundraise. ## We build open core OCV starts [open core](/how-we-work/open-core) companies around existing open source projects. Building an open core company requires having a vision for building paid features around the open source core without degrading the original project or features. Solely providing support services for the open source project is [rarely a viable business strategy](https://opencoreventures.com/insights/the-red-hat-model-only-worked-for-red-hat). OCV companies are expected to build on top of the open source project that the company originally started from. Traction around an open source software project is key to evaluating a company’s potential because it indicates utilization interest, and active users are a great resource for gaining feedback and marketing the company. We have yet to see success when a company pivots away from the original open source project. ## We fund competing open source projects We can't promise to never fund competitors—even if we wanted to. We never share competitive information between companies; it's unethical, and it would destroy our credibility. There are countless factors that determine a startup's success, and the "idea" or "initial product" is just one element. It would be shortsighted to reject an exciting project simply because its initial product or target customer overlaps with another OCV company. The initial product and target customer typically evolve significantly by the time a company reaches IPO. We can't predict how startups will transform on their path to becoming massive businesses. Our [vision](/about-ocv/mission-and-vision) is to launch 2,000 companies annually in the future. Some overlap is inevitable. Many successful investors—including key backers of GitLab and WePay (like YC)—regularly invest in competitors, sometimes even within the same batch. Real competition rarely comes from other startups. Most companies fail from internal issues, not external threats. Focus on your own company. If a founder is fixated on competing with another tiny startup, they've already lost focus. The real external threats are established industry giants and market indifference. Lack of visibility is a much bigger risk than OCV funding a similar company. ## We wind down when it’s the best option Our model is not to give founders as many “shots on goal” as possible while they navigate the idea maze. We already know the project they are commercializing and the general market. We're going "all in" right away to prove there's a real commercial opportunity. If so, founders are off to the races. If not, founders can wind down without burning years of their lives. # Mission & Vision **We’re on a mission to enable more people to become entrepreneurs.** We lower the barrier to creating an open core software company, which allows more people to contribute value through open source and source-available code. **Our vision is that OCV will start the majority of venture-funded software companies.** Our goal is to create 2,000 new companies a year because the leading organization will benefit from the network effects of starting companies at scale. There are about 10,000 venture-funded companies a year, and [roughly 40% of these companies are venture-funded ](https://www.insiderintelligence.com/content/software-startups-vc-funding)[software](https://www.insiderintelligence.com/content/software-startups-vc-funding)[ companies](https://www.insiderintelligence.com/content/software-startups-vc-funding). In the future, we expect that of the 4,000 venture-funded software companies created annually: * 80% will be open core * 80% will be started by VCs * 80% will be started by OCV
## Most software companies will go from proprietary to open core. **80% of venture-funded software startups will be open core.** Open core is a business model that builds commercial source-available software around an open source core. Open core has an advantage over closed-source software because it enhances trust and R\&D velocity. With open source software dominating more and more of the market, closed-source software companies will be at a disadvantage because more users will expect to be able to inspect, modify, and contribute to the software they use. Open core software will become the default because it’s more secure, modifiable, and benefits from faster R\&D velocity. In the future, people won’t trust closed-source companies when there are open core alternatives. ## Most companies will go from founder-started to VC-started. **80% of venture-funded software startups will be started by VCs.** VCs will start companies, recruit founders, and pay them a salary to build the company from day one. Startups can’t happen without great founders, yet the hurdle to becoming a founder is massive: you have to be able to live without a salary or company-sponsored health insurance for at least a year. Under the current model, the talent pool for startup founders is limited to those who have the financial means to support themselves without a salary. The venture ecosystem is supply-constrained, and there [aren’t nearly enough start ups](https://whoisnnamdi.com/not-enough-startups). A shift toward VC-started companies will correct supply and demand and lower the barrier to entry. More entrepreneurs will be able to start companies that will create more open core software and provide more value in open source. ## The leading VC-started open core organizations will experience a network effect. **80% of venture-funded software startups will be started by OCV.** The VC firm starting the most companies will gain network effects and see better outcomes. There are 1,000+ startup accelerators, but YC has produced the majority of accelerated unicorns. YC companies benefit from the network effects of learning from other YC companies, founders, and best practices. OCV will become the leader in starting companies by starting 2,000 companies a year. We will achieve this through our operating model: OCV incorporates a new company with a $2M starting investment, recruits a founding CTO and CEO, and provides operational support. Through our platform model, we provide finance, business operations, people operations, marketing, and recruiting support. Our model benefits from economies of scale when working with outside vendors and contractors. We’re automating everyday startup tasks and developing cohorts of future leaders through peer learning and support. OCV companies will benefit from the network effects of combined experience and reputation and be the recipients of better training, services, and outcomes. # Handbook Guidelines The handbook is focused on content that helps OCV start and scale [open core](https://handbook.opencoreventures.com/open-core-model/) companies. It includes anything OCV team members and OCV founders need to do their jobs effectively. The startup advice included in this handbook is specific to Pre-Seed founders. Generic, Google-able content is out of scope. We follow a [handbook-first](https://handbook.gitlab.com/handbook/about/handbook-usage/#why-handbook-first) approach. When a decision or recommendation is made, the first action item is to document the change in the handbook. Decisions aren’t “final” until they are in the handbook. A handbook-first approach minimizes duplication and provides a single source of truth. Default to making live updates as decisions are being discussed, rather than listing them as an action item for later. If an update is small (e.g., updating existing content to reflect the most up-to-date thinking), make it yourself instead of waiting for someone else to do it. ## Public by default OCV defaults to documenting in the public handbook according to the following guidelines: 1. It’s ok to be messy. Prioritize getting relevant information into the handbook quickly and worry less about organizational structure, word choice, etc. 2. Avoid linking to internal docs and add templates to the handbook whenever possible. Linking to internal templates may be unavoidable in some cases, like linking to a spreadsheet or legal and financial documents. 3. Avoid naming software and systems in the handbook to prevent phishing attempts. 4. Do not share personal, financial, or sensitive HR information in the handbook. Security-sensitive finance and HR processes should be documented in our project management tool. ## Authenticated content Some handbook content is only accessible to OCV employees and founders. Log in to Pulse to access authenticated content. ## Editing the handbook We use GitBook to manage and publish our handbook content. GitBook uses a Git-based workflow for editing, reviewing, and merging changes. ### Creating a change request 1. Always update the name of the change request to describe the change you are making. 2. Keep change requests small and specific. 3. Reviews should respond within 48 hours. ### Merge rules 1. Every change request needs to be up to date before requesting a review or merging. 2. Every change request needs at lease one review before it can be merged. Default to requesting a review of the Head of Content. 3. Be intentional and selective about who you request a review from. Do not request a review from everyone. ### Content guidelines 1. Before adding content, check: 1. **Does similar content already exist?** Search first! You might just need to update an existing page. 2. **Does this warrant its own page, or should it be a section within an existing page?** When in doubt, start as a section. 2. Use headers, visuals, and charts liberally. 3. Write concisely and be straightforward. Use an AI tool to help remove filler words. 4. Do not share personal, financial, or sensitive HR information in the handbook. 5. Avoid naming software and systems in the handbook to prevent phishing attempts. 6. Avoid linking to internal docs and add templates to the handbook whenever possible. 7. Avoid nesting pages. ## Information hierarchy The handbook is organized into 4 levels: spaces, groups, pages, and subpages. We use a flat structure to organize categories and pages; we do not nest content beyond a single subpage.
### Spaces
Spaces are the horizontal tabs at the top of the page. They are the highest-level containers. They define the primary audience or major functional area. Our current spaces are: 1. **Home:** Prospective and new founder space for sharing about OCV, our model, what to expect, and how we interact with founders. 2. **Startup Manual:** Open core founder space for sharing startup knowledge and advice. 3. **Company Operations:** OCV founder-specific space for sharing operational instructions and guidance. 4. **OCV Employees:** OCV employee space for documenting internal processes and policies. ### Groups {% columns %} {% column width="50%" %} Groups are thematic collections within a Space. Groups organize related topics together, typically at least 3 related pages. Think of groups as answering "what category of work is this?" (Fundraising, Product Development, Legal) while pages answer "what specific topic?" A good test: if you can't easily think of 2-3 other related pages that would fit in the group, it's probably just a page. {% endcolumn %} {% column width="50%" %}
{% endcolumn %} {% endcolumns %} ### Pages Pages contain content on a single topic or concept. Pages contain the primary content people are looking for. *Examples: "Investment Thesis," "Equity Management," "Weekly Standup Process."* ### Subpages Subpages are content that supports the parent page. They cover a sub-topic that is relevant to a smaller audience, and are often action-oriented (how-tos, templates, or specific implementations). Use subpages sparingly. ### Avoid nesting content Deep nesting makes content effectively invisible. The complexity creates decision paralysis at every level, fragments related concepts across multiple locations, and makes reorganization nearly impossible as simple page moves become tangled webs of broken links. Additionally, deep navigation becomes unusable on mobile devices, where many people access documentation. ### When to consider restructuring 1. You have more than 5 subpages under one parent page 2. People repeatedly ask, "Where should I put this?" 3. You see duplicate content in multiple locations 4. A Group has only 1-2 pages (might not need to be its own Group) 5. You catch yourself creating a sub-subpage # Style Guide The OCV Style Guide is used for our handbook and public-facing materials. It provides guidelines to keep our content and communications consistent and effective. It is a living document and should be referenced often for the latest guidance. ## Content Philosophy Content at OCV is dynamic and iterative. Our public communication channels (handbook, blog, social media) are transitional spaces that are constantly evolving as we gain new information and insight. Our approach to creating content reflects our values. **Boldness:** Our content is opinionated and confident. We iterate quickly based on feedback. > Example: Our handbook guidance is constantly changing and evolving. > Example: We published a [blog post](https://opencoreventures.com/insights/agpl-license-is-a-non-starter-for-most-companies) taking a stance on the AGPL software license. After receiving feedback and counterarguments via social media, we updated the post with our adjusted stance. **Resourcefulness:** We follow the good/better/best framework and default to speed over perfection. Public-facing content should always include accurate information and be free of typos but may include ephemeral thoughts and opinions. > Example: We update our handbook in real-time with imperfect information. > Example: We published a [blog post](https://opencoreventures.com/insights/technical-founders-need-a-demand-focused-co-founder-from-the-start) on recruiting a startup CEO. The blog post reflects our current opinion on when and who to hire. OCV may change its opinion in the future and contradict the blog post. The business goal of the blog post is to help us attract and recruit CEOs matching our current demand today. We’re comfortable with editing or retiring the piece as our business model shifts in the future. **Inclusion:** We acknowledge that OCV’s approach to content is atypical and we are open to different perspectives. We prefer to be agile and experimental in our approach to content and encourage contributors to find creative and effective ways to work to meet our business needs. ## Voice & tone 1. Always spell out “Open Core Ventures” on the first reference. Use “OCV” for all the following instances. 2. Don’t use “invest” to describe OCV. OCV starts companies; it does not invest in existing companies. 3. Use the term “OCV companies” or “companies” when referring to our portfolio companies. Don’t use “portfolio” or “PortCo”. ## Writing conventions Use the most popular U.S. English spelling and phrasing. ### Active voice Whenever possible, use the active voice instead of the passive voice. The active voice identifies the subject that performs the action. In the example below, “Contributors write the handbook,” it’s easy to see who is doing what. Active voice is closer to the style used in conversation and is especially important for localization. In passive voice, “The handbook is written by the contributor,” the subject receives the action. This sentence uses more words and takes longer to identify the subject. The table below shows more comparisons between active and passive voice. | **Active** | **Passive** | | -------------------------------------------- | -------------------------------------------------- | | Contributors write the handbook. | The handbook is written by the contributor. | | Remove your shoes before entering the house. | Shoes should be removed before entering the house. | | The cat dropped the phone on the floor. | The phone was dropped on the floor by the cat. | ### Acronyms For clarity, spell out acronyms at first use. For example, “POC” can mean either “proof-of-concept” or “point-of-contact”. Use the format “proof-of-concept (POC)” on first use. ### Capitalization 1. Use title case for handbook page titles and sentence case for all headlines. 2. Use sentence case for titles and headlines on the blog. 3. Capitalize brand names unless the brand name uses unusual capitalization (eBay, GitLab). Generally, default to the preferred capitalization of the brand, unless the entire brand name is lowercase. In these cases, capitalize the first letter (example: Reddit, Lego). 4. Capitalize work titles when they precede a name. For example, “General Partner Sid Sijbrandij.” 5. Use lowercase for work titles when there is a comma separating the subject from the title. For example: “the graphic designer, Dakota Jones” and “Dakota Jones, senior graphic designer” #### Title case versus sentence case Sentence case is our preferred convention for titles and headlines. Sentence case is when only the first word and proper nouns are capitalized. It’s easier to read and comprehend quickly. Title case is when all words except articles, conjunctions, and short prepositions are capitalized. It’s generally reserved for names of works (books, manuscripts, movie titles, etc.) and can be complicated to get right. ### Headings Headings should be descriptive enough to suggest the corresponding context when seen out of context. 1. Use sentence case for headings. 2. Use headings liberally. ### Frequently Asked Questions (FAQ) Don’t use FAQs. ### Names and titles On the first reference, introduce the subject by full name and title. See [capitalization](https://www.notion.so/OCV-Style-Guide-4b059f93f1d8406ebdb75453a05600e6?pvs=21) guidelines for work titles. When using names in quotes or throughout an article and after the first reference, use their first name only, as in the example below. > External Secrets co-founders Lucas Severo Alves and Gustavo Carvalho played pivotal roles in shaping the ESO project’s inception and growth. “The vision was to grow the project to be the de facto solution in the Kubernetes secret management space and donate it to the CNCF,” said Lucas. ### Numbers 1. Spell out numbers one to nine. Use digits for 10 and above. 2. Use digits and the percentage symbol (%) for writing statistics. 3. Spell out numbers and the word “percentage” when used as the first word in a sentence. For example, “Ten people saw the balloon in the sky,” and “Eighty percent of people think open core is the best business model.” ### Present tense Use the present tense instead of the future tense as shown in the table below. | **Present** | **Future** | | -------------------------------------------------------------- | ------------------------------------------------------------------- | | There is a time limit for the candidate to submit the project. | There will be a time limit for the candidate to submit the project. | ### Procedures Use a numbered list to reference and distinguish between steps. Start each step with a capital letter. Use complete sentences or incomplete lists as shown in the table below. End complete sentences with a period. Do not include a period in a list because it is an incomplete sentence. | **Procedure: Sentence** | **Procedure: List** | | ---------------------------------------------------------- | ------------------- | | 1. Use the numbered lists for procedures and instructions. | | 2. Be consistent with sentence versus list procedures. 3. Don’t mix sentences and incomplete sentences in a list. | OCV job recruiting includes: 4. Candidate job posting 5. Recruiter outreach to the candidate 6. General interviews | ### Serial commas Use Oxford style before the coordinating conjunction in a list of three or more items. In this example, “writing style, mechanics, and voice”, add a comma after “mechanics” and before “and”. # Startup Manual OCV's Startup Manual is for founders building and growing open core companies. It includes strategic guidance from company formation through growth stages. Our mission is to enable more people to become founders, and our public handbook is a way for anyone to learn and benefit from our frameworks. Everyone is [welcome to contribute](https://gitlab.com/opencore-ventures/ocv-handbook/-/issues). ## Recent Articles from Sid Sijbrandij
Cover image
Building venture-scale open corehttps://opencoreventures.com/insights/building-venture-scale-open-core/files/GrREttVQ8CIpFkCAzTCf
Every startup needs an AI strategyhttps://opencoreventures.com/insights/every-startup-needs-ai-strategy-sid-sijbrandij/files/wFqlXGGTroIOWB9Ad3dZ
Founder-compensated startups are default deadhttps://opencoreventures.com/insights/founder-compensated-startups-are-default-dead/files/QCYJkRuYMo2k8IOYWQZA
Open core split should be based on features, not on code basehttps://opencoreventures.com/insights/open-core-split-should-be-based-on-features-not-on-code-base/files/PBZHWOdBpuZEYh6mPPBt
A standard pricing model for open corehttps://opencoreventures.com/insights/a-standard-pricing-model-for-open-core/files/LGaYz1w8bVXMBRyqdXT0
Artificially constraining your company to one goal creates velocity and creativityhttps://opencoreventures.com/insights/artificially-constraining-your-company-to-one-goal-creates-velocity-and-creativity/files/e9jNE04ksa81Y24zpg8z
Don't listen to potential customers' "if only" requestshttps://opencoreventures.com/insights/dont-listen-to-the-last-objection/files/0AYLvnb6EXdiWhilSKrp
The Red Hat model only worked for Red Hathttps://opencoreventures.com/insights/the-red-hat-model-only-worked-for-red-hat/files/SJc7LNNrLCdYYRrl7jBt
Let demand steer early-stage open core product developmenthttps://www.opencoreventures.com/insights/let-demand-steer-early-stage-open-core-product-development/files/TF1FEEwl9gRoyDBiehRD
# Buyer-Based Open Core While most open core companies will have a statement of intent regarding their relationship to the open source project, they usually don’t disclose how they place features and functionality. Buyer-based open core is a transparent feature segmentation framework to determine which features are open source and which are proprietary. The buyer-based open core framework segments features based on the most likely user: Features that managers and up want are proprietary, and features that individual contributors want are open source. It's no longer about "Where is that feature technically?" Or "How much more work was it to make?" Or "Where in the repo does it live?" It's about the end-user. Consider the user persona rather than the technical implementation. Management features like access controls, audit logs, and compliance tools naturally fall into the proprietary category, while individual contributor features often belong in open source. | Persona | Individual Contributor | Management/Executive | | -------- | --------------------------------------- | --------------------------------------------- | | License | Open source | Proprietary | | Billing | Free | Paid | | Features | Core functionality, sharing, API access | Access controls, audit logs, compliance, etc. | [List of enterprise features.](https://www.enterpriseready.io/) ## **Advantages of buyer-based open core** 1. Features are consistently added to the free and open source version. 2. You can serve different users with a single use case by building propriety functionality on top of existing open source features. For example, you have a collaboration feature that is free to use, but approvals are paid. 3. Executives are least likely to contribute to open source and have complicated use cases. They pay for features that meet their specific and possibly unique needs. 4. Executives are the least price-sensitive. You can charge a lot of money for the features an executive needs. With buyer-based segmentation, the plan scales with the highest-tier user. Everyone within a company is on the same plan and gets the same features, even if they don’t use them. The disadvantage of buyer-based segmentation is that it's harder to keep the open source and proprietary code separate. ## Features that drive growth are free Don't put barriers around fundamental behaviors that drive growth. For example, sharing is a viral thing. Keep that free. But after sharing comes the complications. Managers will ask, "Can we limit public sharing? Can we get an overview of what documents are shared with whom? Can we prevent people from sharing documents outside of our organization?" Make sharing wide open by default, but charge for the governance and control features that managers and executives need. ## Feature placement decisions are sticky Feature placement decisions are sticky. Once something is proprietary, internal reluctance to open source it grows over time. When in doubt, don't default to making a feature proprietary, thinking you can open source it later. Likewise, resist the urge to move features from the open source version into the licensed version. Doing this completely erodes trust. Use feedback from the community and users to refine where you place features as you build. The worst-case scenario is giving too much away for free, and the business can’t sustain itself. The second-worst-case scenario is to build a company on top of an open source project and never contribute back. This is a balancing act, and companies are bound to get it wrong sometimes. The buyer-based model provides guardrails for companies so they don’t overcorrect in either direction. It’s a monetization strategy that enables business growth while furthering the open source movement. ## Module-based open core The opposite of buyer-based open core is module-based open core, where features are separated based on functionality. Products segmented this way tend to have * Fewer proprietary features * Price-sensitive buyers * Frequent open source contributions from users * Features that are distinctly open source or proprietary—features don’t build on each other Module-based open core makes it harder to create proprietary features because functionality within the product is either solely open source or solely proprietary. # Licensing & Distribution Open core software includes both open source and proprietary licensing. Proprietary code should be source-available but require a license or subscription to use. **Licensing guidelines:** 1. Use the same license as the open source project 2. MIT is the preferred open source license 3. Use the [Developer Certificate of Origin](https://developercertificate.org/) for managing contributor copyright ## Use permissive (MIT) OSS licenses OCV prefers to start companies around projects that have a permissive license (e.g., MIT, Apache, or BSD) or the possibility of relicensing. It’s best practice to use the same open source license as the project. We will consider projects that aren’t permissively licensed on a case-by-case basis, but advocate for MIT whenever possible. Relicensing should be done through the influence of the author of the project or the key contributor in the community. If relicensing, release a blog post ([example](https://goauthentik.io/blog/2022-11-02-the-next-step-for-authentik)) explaining the rationale behind this change to the open source community. ## Contributor copyright: DCO and CLA We recommend the Developer Certificate of Origin (DCO) over a Contributor License Agreement (CLA) because the DCO is a lightweight, per-commit sign-off mechanism that simply asks contributors to certify that they have the right to submit their code under the project's license — no legal paperwork, no signatures, no friction. CLAs, by contrast, often require contributors to sign a separate legal document (sometimes requiring employer approval), which creates a meaningful barrier that can discourage casual or first-time contributors. The DCO also avoids the asymmetry of CLAs, where contributors hand over broad rights to a single entity; instead, it keeps copyright with the original authors while preserving a clear, auditable record of provenance. For most open source projects, the DCO strikes the right balance between legal clarity and community accessibility. ## Proprietary code is source-available This might seem counterintuitive, but transparency in your proprietary code creates [significant advantages](https://www.opencoreventures.com/insights/why-open-core-will-replace-proprietary-software-as-the-default). We recommend that all OCV companies make proprietary code source available so anyone can contribute. Use the [OCV Source Available License](https://github.com/OpenCoreVentures/open-core-ventures-source-available-license). There is no great reason not to do this. Maybe competitors are copying you, but we’ve never seen a startup die because of this. Startups die because no one cares enough about them, no one is using their product, and their product is not improving fast enough. ## License templates
MIT license template Below is a standard template for OCV companies with an MIT open source license. Please copy, paste into the “LICENSE” document, and update the company’s legal name. This template needs to be updated by your legal team if the open source project is under an Apache or other permissive license. 
Copyright (c) 20xx-present [Insert Company’s Legal Name Here]

Portions of this software are licensed as follows:

- All content residing under the "doc/" directory of this repository is licensed under the "Creative Commons: CC BY-SA 4.0 license".
- All content that resides under the "sa/" directory of this repository, if that directory exists, is licensed under the license defined in "sa/LICENSE".
- All client-side JavaScript (when served directly or after being compiled, arranged, augmented, or combined), is licensed under the "MIT Expat" license.
- All third-party components incorporated into the [Insert Company Name Here] Software are licensed under the original license provided by the owner of the applicable component.
- Content outside of the above-mentioned directories or restrictions above is available under the "MIT Expat" license as defined below.

Permission is hereby granted, free of charge, to any person obtaining a copy of this software and associated documentation files (the "Software"), to deal in the Software without restriction, including without limitation the rights to use, copy, modify, merge, publish, distribute, sublicense, and/or sell copies of the Software, and to permit persons to whom the Software is furnished to do so, subject to the following conditions:

The above copyright notice and this permission notice shall be included in all copies or substantial portions of the Software.

THE SOFTWARE IS PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. IN NO EVENT SHALL THE AUTHORS OR COPYRIGHT HOLDERS BE LIABLE FOR ANY CLAIM, DAMAGES OR OTHER LIABILITY, WHETHER IN AN ACTION OF CONTRACT, TORT OR OTHERWISE, ARISING FROM,OUT OF OR IN CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN THE SOFTWARE.
Open Core Ventures Source Available License (OCVSAL) version 1.0 {% code overflow="wrap" %} ``` Open Core Ventures Source Available License (OCVSAL) version 1.0 Using software and associated documentation files (the "Software") in production requires a valid commercial agreement from the copyright holder. The licensor grants you the right to modify the Software, test it, and share modifications to the Software, for non-production use. You must retain this license on any copies of the Software you share with others. If you provide suggestions, contributions, or other feedback about the Software, you grant the licensor an irrevocable, royalty-free, unlimited license to use that feedback without restriction. THE SOFTWARE IS PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. IN NO EVENT SHALL THE AUTHORS OR COPYRIGHT HOLDERS BE LIABLE FOR ANY CLAIM, DAMAGES OR OTHER LIABILITY, WHETHER IN AN ACTION OF CONTRACT, TORT OR OTHERWISE, ARISING FROM, OUT OF OR IN CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN THE SOFTWARE. IF THE FOREGOING WARRANTY DISCLAIMER IS UNENFORCEABLE UNDER APPLICABLE LAW, THIS LICENSE IS VOID AND YOU HAVE NO RIGHT TO USE THE SOFTWARE. ``` {% endcode %}
The licensing for a repository should be stated in the master directory of the repository in a document titled “LICENSE”. Where different portions of a repository have differential licensing, it is best to be explicit about that differential licensing. The license document should describe explicitly which directories fall under which license and where specifically the software is proprietary. It’s best practice to put proprietary features in a `/proprietary` subdirectory within the open source repository. Avoid naming the subdirectory /ee or /enterprise-edition. The licensing can be described in the subdirectories themselves under separate license documents referenced in the master directory in the format of: > *All content that resides under the "subdirectory/" directory of this repository, if that directory exists, is licensed under the license defined in "subdirectory/LICENSE".* Alternatively, you can delineate open source and proprietary code on a file-by-file basis, but it makes it really hard for people to quickly get an idea of what's proprietary and what's not. ## One distribution with two licenses Keep all the code in a single repository whenever possible and make it available for both self-hosted and SaaS deployments. The proprietary code is source-available, and the features in the proprietary codebase are activated by a paid subscription. The alternative is two distributions with separate licenses, which adds friction when a user wants to use proprietary functionality. Not only do they have to get a license, but they also have to reinstall the software. That’s a big hindrance that can slow the adoption of the commercial software. Separate repositories are technically clean, but they reduce monetization potential. ### Problems with separate repos 1. Changes need to be made in multiple places, duplicating efforts 2. If a user has a problem, they have to figure out the right repo to submit a PR to 3. If a user has a feature request, they don’t know where to send the request because they don’t know whether it will be open source or proprietary This is easiest when you are both the author of the open source project and the founder of the company. If you aren’t the author of the project, you will need to get permission from the people running the project to add proprietary code. If you don't control the upstream repo, build trust first. Many open core companies build on existing open source projects they don't control. If you're not the maintainer of the upstream project, focus on becoming an active contributor before seeking integration. You should be contributing to the open source codebase to the extent that project maintainers see you and your company as a positive influence. Once you've established yourself as a trusted contributor, consider asking the upstream maintainers if you can add your proprietary code directly to their repository. The key is demonstrating that maintaining separate repositories creates extra work and inefficiency. ## Maintaining a soft fork If you are working with a community or foundation-owned open source project and can’t integrate the proprietary code into the upstream project, combining source code into a single repository may require maintaining a soft fork and pushing features upstream. It’s a “soft fork” because the open source part stays the same. You just add the `/proprietary` subdirectory and a few hooks to load those files. Any open source improvements or features are upstreamed. This does require a significant amount of resources and the responsibility of keeping in sync, but the result is a better experience for the end-users of your open core product. Stay heavily involved with the community to reduce the risk of the forks splitting. You will have more influence over the overall direction of the project if you are a well-respected contributor and can more easily mitigate potential issues between the upstream fork and your downstream version. ## Offer both self-hosted and SaaS options Most companies should offer a SaaS version of their software. This isn't about replacing self-hosted options but rather giving customers a choice and creating an additional revenue stream. Keep your SaaS version and your self-hosted version as similar as possible. Typically, the SaaS version has the same open source features offered in a free tier, but with usage limits like "no more than three users per team" or other restrictions. The code itself should still be visible and modifiable. Make the proprietary features available in both options. If you create them in the SaaS version, make them source-available in the self-hosted version, too. ## Telemetry is default on Telemetry should be on by default, with an option for users to opt out. Otherwise, most users won’t enable it. Telemetry collection must be completely transparent: 1. Document exactly what you collect, why you collect it, and how it benefits users. 2. Provide clear opt-out mechanisms and never hide data collection behind unclear documentation. 3. Write a blog post explaining your telemetry approach. Detail what data you collect, what you don't collect, and how it helps you improve the product. 4. Make it easy to disable. Show that you respect user privacy and aren't trying to hide anything. ### Include a value-exchange When adding telemetry to an open source project, you need to include a value exchange for the user. For example, when users have telemetry turned on, it checks if they are on the latest version, and users get automatic vulnerability alerts. {% hint style="info" %} **Example message** We see # installations getting hacked, so we’re showing vulnerabilities in the interface. You can enable these proprietary features if you share more data with us. Enable telemetry to get automatic notifications when there’s a security vulnerability. {% endhint %} Consider making telemetry opt-in for security-focused audiences. The data loss is worth avoiding community trust issues that can permanently damage your reputation. When users discover "hidden" telemetry, they assume the worst about your intentions—even if your data collection was reasonable and well-intentioned. ## Activating proprietary features To activate the proprietary features, the customer instance talks with your entitlement service. They report statistics (customer ID, number of users, aggregate usage numbers of certain features), and you report to them how many users they are entitled to. Don't have license files; it should be an online check. 1. Use a Unique ID for each customer (probably, UUID) 2. Customer ID comes from your sales software (Zuora, Salesforce, etc.) # OSS Community Building a commercial company around an open source project gives you an immediate audience, but it doesn’t give you immediate *access* to that audience. You need to find a way to reach them. For example, you can’t expect a project maintainer to give you access to their email distribution list just because you are building around the same project. They may have no initial interest in partnering with you or promoting your product. Some ways to reach your built-in open source audience: 1. **Community contributions:** Spend time making meaningful contributions to the project and helping other contributors out. 2. **Services instead of alternatives:** Provide services to the project through hosting the project or working on the specific needs of businesses using the project. 3. **Content marketing:** Write about the project and how you’re contributing to it, using it, or planning to improve it. It gives the project and your company visibility with the audience. 4. **Hacker News:** Join Hacker News and start engaging with relevant conversations and creating content that the community would find interesting enough to share and comment on. Use “[Show HN](https://news.ycombinator.com/showhn.html)” to share something you’ve made that people can interact with. “[Ask HN](https://news.ycombinator.com/ask)” when you have questions that the HN community can help you with. ## Improve the open source code faster than before A common community concern when companies form around open source projects is that development will slow down as resources get diverted to proprietary features. It’s important that the open source part of the codebase expands more rapidly than it did before the company existed. Most of the people at your company are net new. As long as one of them sometimes adds something to the open source codebase, the open source codebase should be better off. ## Value creation over reputation management Many founders get paralyzed by concerns about how the community will perceive their commercialization efforts. The best way to maintain community trust is to consistently deliver value through your open source contributions and maintain transparency in your approach. If you're contributing meaningfully to the open source project and being transparent about your business model, the community will generally respond positively. ## Community contributions To be efficient with capital, [build with the community](https://opencoreventures.com/insights/dont-listen-to-the-last-objection). Engaging the open source community around your project and product is an advantage for open core companies—use it! Plant seeds by shipping a small minimally viable change (MVC) and asking the community to help mature it. Shipping incomplete functionality to expand the scope often goes against instincts. However, planting those seeds, even in an incomplete state, allows others to see the path and contribute. With others contributing, iterations happen faster. While MVCs come with a low level of shame, they allow the wider community to contribute and people to express interest. ### Increasing contributions 1. Keep review turnaround time under a week. The faster the turnaround time, the more encouraged people will be to keep working on your project. 2. Generate awareness of your project through [content marketing](/startup-manual/gtm/growth/content-marketing). 3. Host a hackathon. If you don’t already have a significant social following, you can host a hackathon [Devpost.com](https://devpost.com/), [Hackathon.io](https://www.hackathon.io/network), and [Dev.to](https://dev.to/) 4. Start a [discourse](https://www.discourse.org/) forum. It’s good for SEO and you can create a custom domain for your forum. ### Improving contribution acceptance rates **General guidelines when you (the founder) are the only or primary maintainer:** 1. Give the community direction by generating high-priority issues for them to work on. 2. Hire a contributor success person to review and manage community contributions. 3. Provide documentation with guidelines and tips for contributors. **Specific guidelines for when the project is maintained by someone else, maintained by a foundation or separate company, or PRs/MRs need to go through a lengthy approval process because the project is mature or there are many approvers:** 1. If a foundation or a community of maintainers maintains your open source project, help maintainers by providing resources. 2. Pair someone with the maintainer when he goes through it on a Zoom call (live) and do a write-up of what was wrong, and in the next MR, share what you changed. 3. Instead of asking them to document => pair with someone to do the documentation for them 4. Help improve the processes and culture that slow PR review and acceptance. 5. Working with open source projects ## Competitor contributions Given the nature of most OCV companies, we may encounter competitors contributing to or leveraging the same underlying open source project. The general guideline is to accept competitors’ code contributions if they’re good. Faulty codes and/or if they’re difficult for the open source community to maintain would be reasons to reject or request rework. ## Become the obvious choice Make your software more user-friendly than alternatives. Make your open source offering better than other open source options in the same space. When you become the default choice for open source users, converting them to paid plans becomes much easier. You want people to come to you regardless of whether they are looking for open source software or a paid product. Don't be afraid of competition. If a large company like Microsoft is adopting your technology, embrace it and use it to establish yourself as the expert. If competitors are white-labeling your software without attribution, make sure everyone knows it is based on what you made. Make a page on your website that lists all the companies building on your software. Make your company look as big as possible. Then, look at what they're selling, as it’s probably an indicator of demand. Look at which ones are successful and what they are selling, and go build that. # Brand Founders should have a website and logo on their first day. We encourage building a website and creating a logo using AI. Choose whichever website hosting platform you are most comfortable with. * Website: [v0](https://v0.dev/), [Lovable](https://lovable.dev/), or a static site generator like [Hugo](https://gohugo.io/) or [Astro](https://astro.build/) * Logo generator: [Looka](https://looka.com/), [Logoai](https://www.logoai.com/), [Design AI](https://www.design.com/s/logo?var=ai-logo-generator-dcom\&code=25OFFSEM\&utm_medium=cpc\&utm_source=google\&utm_campaign=usa_02_competitor\&utm_adgroup=chatgpt_logo\&utm_content=766763526651\&utm_keyword=chatgpt+logo+creator\&utm_network=g\&gad_source=1\&gad_campaignid=21390476129\&gbraid=0AAAAADwF9LDz7-TwioR9bDNlSCzC98QbI\&gclid=CjwKCAjwq9rFBhAIEiwAGVAZPzcZ0cE1wxSRi9J3CMCEnyuQkGI-Z_mNH3sRauGNpC56vGTkW0W9WhoCyIoQAvD_BwE) ## Company logo Using AI is the most efficient way to create your company logo. Don’t overthink the company logo—keep it simple. Your horizontal logo should work in narrow header spaces, and your stacked version should work in square social media profile spaces.
**File formats needed:** * SVG (vector, infinitely scalable, primary format) * PNG with transparent background (multiple sizes: 512px, 256px, 64px, 32px, 16px) * JPG for specific use cases **Four mandatory versions:** * Full color (primary version) * Single color/black * White/reverse (for dark backgrounds) * Grayscale **Two layout options:** * Horizontal (primary for web headers, business cards) * Stacked/vertical (for social media profiles, mobile apps, square spaces) **OCV Website Logo** To add your logo to the OCV website, we need a logo that meets the following requirements: 1. Approximately 3:1 aspect ratio, horizontal layout. 2. SVG preferred, transparent PNG accepted. 3. Apply a #CFCECE fill or overlay ### AI logo generation prompts When prompting AI, insist on simple, clean designs that work at small sizes (favicons, mobile apps). If you can't quickly sketch the logo from memory, it's too complex. When prompting AI to create a company logo, consider including: 1. Include specific keywords in the prompt: 1. simple, scalable logo 2. works in black and white 3. minimal design with clear typography 2. Include your industry/company name in prompts. 3. Any significance or meaning behind the company name. 4. Personality traits would you use to describe the company (adjectives, emotional/intuitive feelings the brand is expected to invoke). Include a few competitor examples. Don't just pick the first result. Generate 10-20 options, then create the required variations of your top three choices before deciding. You can refine your AI-generated logo using tools like Figma, Canva, or GIMP. Test scalability immediately. View your logo at 16x16 pixels (favicon size) and 200+ pixels wide. If key elements disappear or become illegible, simplify further. ## Website content The content of your website should be forward-looking. Build the website for the product you want to have in 6 months; your website will undergo many, many iterations over time. Aim to have a company website published in your first week or sooner. OCV will transfer any existing domain names to the founder. The first version of your website may be a single page, but should include: 1. **Headline and description.** The headline should explain your company in a few words. The description should explain what you do in 1-2 sentences. 2. **Value props and/or features.** How does the product help its users, and what are the existing or planned features? 3. [**Pricing**](#pricing-page-template)**.** The pricing page is often the most visited because it quickly tells visitors what the company offers. Even if you’re not sure what you are selling or for how much, it’s a good exercise to start thinking about. The first version may be an hourly rate for support and services. 4. **Competitors.** A simple and clear way to help people understand your business is to list the companies and technologies you replace. For example, [GitLab’s Platform page](https://about.gitlab.com/platform/) lists each category it serves and which tools and technologies it replaces in each. 5. **About us and contact us.** Include the company vision and mission, details about the open source project, a contact form, and team bios. It’s important that founders are included on the website and share their specific expertise. Include the founder's role in the open source project (creator, maintainer, contributor). 6. [**Terms of Use**](#terms-of-use)**.** Use the template provided by OCV’s legal team. 7. [**Privacy Policy**](#privacy-policy)**.** Use the checklist provided by OCV’s legal team. ## One website for the project and the company For companies that can [maintain the original project name](https://handbook.opencoreventures.com/company-formation/step-1-choose-the-company-name/), it’s best to keep the open source project and commercial company websites together rather than separate, if you can. Two different websites can confuse and require double the effort to maintain. Much of that effort will be duplicative. Don’t worry about deprecating the existing open source project website. Instead, make the commercial company website a superset of the two. The commercial site should be the go-to destination for all communication and information. Eventually, the two websites may evolve into one, but that can happen over time. Doing everything all at once may alarm the community. It’s better if this is a gradual process that happens as the community gains trust in the commercial entity. People are a lot more receptive to change as long as the commercial company is consistently doing the right thing. If combining the open source and company website isn’t an option, create a new website and include a link to the open source project repo in the website footer. ## Terms of Use Terms of Use, also known as Terms of Service, are a legal agreement between a company or website and its users that outlines the rules and guidelines for using the service. It's a legally binding agreement between the company or website and its users that protects both parties' interests. {% hint style="info" %} ### **Terms of Use Template** [Terms of Use Template](https://docs.google.com/document/d/1b3Fuq4JyJ5l08v0CmppNsztfEmCpiAxo/edit?usp=share_link\&ouid=114605482382680978191\&rtpof=true\&sd=true) Provided by OCV’s legal counsel for OCV (open core) companies as of February 20, 2023. Companies must review and edit highlighted sections prior to releasing their Terms of Use. {% endhint %} ## Privacy Policy A privacy policy tells visitors what information you collect from them and what you do with it. If you collect any personal information (emails, names, etc.), you need one. If should cover how you handle any personal information collected by the company from the website, products, and services. Not all privacy policies look the same—yours should match what your website actually does. Don't mention mobile apps if you don't have one, or talk about data collection of minors if your site isn't for kids. With respect to the personal information that the privacy policy should cover: 1. Who does the personal information concern? 2. The relationship between the Company and the individuals whose personal information is collected. Is this personal information generally collected in a consumer context or in a business context? 3. How does the Company collect or receive the personal information? 4. For what purposes is the personal information collected, used, and shared? List all categories of personal information that the Company collects. {% tabs %} {% tab title="Template" %} Use the provided [privacy policy template](https://docs.google.com/document/d/1OUfayfbvUBQKUoGJXFw3cJO3wOCNL0jW/edit#heading=h.3dy6vkm). Use the Coverage Checklist to determine which sections you need to include and which to eliminate. {% endtab %} {% tab title="Coverage Checklist" %} Use this to figure out what your privacy policy needs to cover. 1. Does the Company receive any personal information from its business customers to process on their behalf (e.g., as a service provider)? If so, please describe the types of personal information received in this context, how the Company receives this information, and what the Company does with this information. 2. Will the Company be aggregating or anonymizing any personal information and using it for purposes outside of the product or service? If so, please describe. 3. Will the Company be using any personal information for R\&D purposes? If so, please describe. 4. Does the Company have a mobile application? 5. Does the Company collect information from other third-party sources? This may include public records, data providers (e.g., data brokers), affiliate partners, and marketing partners. 6. Does the Company allow users to log into the service or platform through social media credentials (e.g., Facebook or Google authentication)? 7. Does the Company utilize (i) cookies (and if so, whether these are first-party or third-party cookies), (ii) local storage technologies, (iii) web beacons, and/or (iv) session replay technologies? If so, please describe. 8. Please confirm if users of the service can refer friends or other contacts to the service. If so, please describe the categories of personal information that are collected for this purpose. 9. Does the Company engage in email marketing? If so, how may users opt out? 10. Does the Company engage in text-based marketing or otherwise send text messages to individuals? If so, how does it obtain consent? 11. Does the Company engage in interest-based advertising on its website? 12. Please provide a list of categories of third parties with whom the Company may share personal information and the purposes for such sharing. 13. Will customers be able to make purchases via the website? If so, will the Company be using a payment processor? 14. Please describe what rights users are generally provided, if any (e.g., access their information, update their information, delete their information). If rights are provided, are these rights only provided to certain individuals (e.g., California residents) or to all individuals? 15. Is the website directed at children? Does the Company otherwise knowingly collect information from children under the age of 16? Please describe. 16. Confirm if the Company is subject to the CCPA. 17. Is the company governed by GDPR? Consider the employee base, customer base, and target market. {% endtab %} {% tab title="Location Requirements" %} ### Location-Specific Requirements **If you have customers in these places, there are extra rules:** * **California (CCPA):** Must let California residents request/delete their data * **Europe (GDPR):** Stricter rules - need explicit consent for cookies, data processing * **Canada (PIPEDA):** Similar to GDPR for Canadian customers **Simple rule:** If you're unsure, give ALL users the right to access, update, and delete their data. It's good practice anyway. {% endtab %} {% endtabs %} # Announcements ## Company announcement Founders may choose to publish an announcement post on their own website. Announcements authored by the company typically address the existing open source community and explain why the founder decided to start a company around the project. Please coordinate with OCV on publishing timing. Sometimes OCV will publish a new company announcement for the company. The company's website and social media pages (LinkedIn and Twitter) must be live before OCV can share the announcement. We ask that founders participate in a 45-minute interview with OCV to gather content for the announcement post. The interview will cover: 1. **Background:** The open source project origin and founder background 2. **Existing market:** The problem/solution space the technology operates in 3. **Company vision:** Thoughts on the company and product roadmap. 4. **Open Charter:** Why the company is an Open Charter company (if applicable) ## Monthly release announcements Commit to a regular communication schedule for release updates. A monthly blog post is recommended. The blog post may include a changelog and should highlight new features and notable improvements. Publishing a monthly release post is a chance for you to share your product story. At a bare minimum, it’s essential to proactively communicate any changes to the product to users and customers. But a release post can also be a powerful marketing tool. Take your release post a step further by explaining why the improvements are helpful to users and customers, how they fit into the overall product vision, and sharing prompts for getting started. Reiterating your product roadmap and vision helps generate excitement and may encourage contributions. ### **Release post content** 1. New feature highlights describing what the feature is and how to use it 2. Roundup of all the changes and improvements made since the last release. Note anything that has been deprecated or any required upgrades 3. Pictures and gifs showcasing new features and improvements 4. Community contribution section thanking anyone who contributed to the most recent release ### **Release post titles** Avoid overly generic release post titles like “FakeAPP 1.0 released” and instead tell the reader about something interesting you shipped. | OK | Better | Best | | -------------------- | ---------------------------------------------------------------------------------------------- | ----------------------------------------------------------- | | FakeAPP 1.0 released | FakeAPP 1.0 released with real-time collaboration, advanced analytics, customizable dashboards | Work faster with shared insights and customizable workflows | A stronger title goes beyond simply announcing a release by highlighting what’s actually new and valuable. For example, “FakeAPP 1.0 released with real-time collaboration, advanced analytics, and customizable dashboards” immediately signals concrete improvements, helping readers quickly understand why the update matters. An even more effective approach leads with the user benefit or problem solved by those features. A title like “Build smarter and collaborate faster with FakeAPP 1.0” frames the release around outcomes rather than mechanics, making it more compelling and relevant than a generic “FakeAPP 1.0 released,” which offers little insight into why the announcement is worth a reader’s attention. # Product ## Product-market fit Building a company around an open source project with good traction indicates that it has good potential for PMF, but does not guarantee it. Product market fit (PMF) is when the product meets the needs and wants of its target market, and people are willing to pay for it. It's achieved when the product has a substantial market and can generate significant revenue. To achieve product market fit, a startup should be able to identify its target market and demonstrate a deep understanding of its needs and preferences. The product needs to meet the target market's needs and solve their problems. **PMF signals:** 1. Increase in OSS contributors/contributions 2. An increase in ARR growth speed 3. Sales are a more predictable process and less costly in terms of time and resources required 4. The sales team closes deals without the founder's involvement Once the product is developed, test it with your target market to get feedback and make necessary improvements. Continuous testing and iteration are crucial to achieving and maintaining product-market fit. It is important to note that finding product market fit is not a one-time task but a continuous process. A product may achieve product market fit initially, but it can lose it over time if it fails to keep up with changing market trends and customer needs. ## Commercial MVP A minimum viable product is the simplest version of a product that can be sold. The goal of an MVP is to collect customer feedback with minimal effort and avoid building products that customers don't want. It is important to start talking to customers early on and throughout the lifetime of a company. They will help provide insight into the problem that the company is solving, which should inform product development. Don’t make the mistake of building in isolation. Customers buy solutions to problems, not features. By [identifying and prioritizing the needs of your heaviest users](https://opencoreventures.com/blog/2023-03-dont-listen-last-requirement/), you can develop products that address your customers' most pressing problems. Understanding these problems deeply requires iterative development to refine how you meet customer needs. ## Deciding first features Don't reinvent the wheel to get started creating enterprise features. [**EnterpriseReady.io**](http://enterpriseready.io/) is a great resource that identifies which enterprise features to build first by providing a research-backed roadmap of the 12 most valuable enterprise features, based on studies of successful SaaS companies. Founders can use the self-assessment tool to benchmark their product, receive specific implementation guidance with real-world examples, and prioritize development efforts that will drive enterprise adoption and revenue. To improve the existing product, product features should be weighted based on their source in listening to customer feedback and informed by customer discovery, and not necessarily on the frequency of requests. 1. Ideas for features and functionality can come from users, but the result of what the product will do is defined by the product team. 90% of the product scope will come from the product team. 2. Prioritize feature requests based on effort vs value. Focus on high-value low low-effort changes. 3. Working closely with large customers tends to yield the best new features. Large customers have knowledge, expertise, and ask for things that other customers want. The heaviest users will give the best feedback. They understand the limitations of the software and will be more likely to have submitted pull requests for modifications and issues. Visibility into that feedback through contributions by heavy users is an advantage of open core products. [Potential customers never buy because of product features](https://www.inc.com/geoffrey-james/6-ways-to-convince-customers-to-buy.html). Overvaluing the requirements of a potential customer can be a high effort and deprioritize more meaningful improvements. Someone who has never used your product can’t really know how to make it better. Sales requests are important, but they will not make up a significant amount of feature development. Product and sales should have a list of the 5-10 most important requests that they revisit every quarter. ## Premium/Enterprise releases A premium or enterprise release for an open core company will usually be a version of that software that includes a software as a service (SaaS) option (which is hosted) in addition to source available and open source versions. On-premises offerings with releases should be evaluated on a case-by-case basis for companies and are generally more useful for infrastructure projects. Certifications and data locality can represent a challenge for implementing on-premises offerings, along with the possibility of functionality degradation. [Replicated](https://www.replicated.com/) helps software vendors with the delivery of on-premises solutions. ## Professional support & services In the early stage of a startup’s product development phase, your R\&D efforts may look like professional support and services. Utilizing professional services engagements for R\&D efforts should focus on building features that have the potential to be relevant to other customers. {% embed url="" %} ## Avoid second-system syndrome Second system syndrome refers to the tendency to overcomplicate and over-engineer a new version of a product or system. This syndrome occurs when the creators of the second system try to address all the perceived flaws and shortcomings of the first system, resulting in a bloated and ineffective solution. 1. **Focus on the core functionality:** Identify the most critical features and prioritize them over secondary or nice-to-have functionalities. Keep the system lean and focused on delivering value to users. 2. **Iterate and gather feedback:** Instead of aiming for a perfect and fully-featured system from the start, adopt an iterative approach. Release early versions of the system, gather feedback from users, and make incremental improvements based on their needs and preferences. 3. **Stay aligned with user needs:** Continuously engage with users to understand their requirements and ensure that the system remains aligned with their needs. Avoid adding features or functionalities that are not directly relevant or valuable to the target users, and avoid building in isolation. # Pricing ## Default to price-based costing Default to using the price-based costing method, which looks at what competitors or substitutes would charge to provide a similar product/service to get a sense of willingness to pay. Base your pricing on existing incumbents and those who are defining the market at this time. Pricing has a negative correlation with demand. When the price goes up, the number of customers willing to pay that price will go down. In general, pricing alone should be the primary reason 20% of people are not willing to buy the product. Experiment with different deal structures & pricing units to see what works for your customers to drive sales. ## Consumption-based pricing The consumption-based pricing model is a service provision and payment scheme where the customer pays according to the resources used. The provider needs to track customer usage and bill accordingly. Consumption-based billing is best for businesses that can easily break down their offerings into small, variable units. | **Advantages** | **Drawbacks** | | -------------------------------------------------------------------- | --------------------------------------------------- | | Fair to the customer (paying for actual usage) | Difficult to predict revenue (can’t price annually) | | Align operating costs with customer usage rates (e.g. cloud storage) | Receive payment in arrears as opposed to in advance | ## Hosting fees Use hosting fees to control high hosting costs. When the cost of hosting is high, consider a hosting fee for small customers and a minimum size for hosting costs to be waived. **Two hosting examples:** 1. Use Cloud to explain its “You pay the bill:” [Posthog](https://posthog.com/pricing), [Consul](https://www.hashicorp.com/products/consul/pricing), [Jira](https://www.atlassian.com/software/jira/pricing) 2. Unless they sell an API, not an interface: [MongoDB](https://www.mongodb.com/pricing), [Elastic](https://www.elastic.co/cloud/), [Redis](https://redis.com/redis-enterprise-cloud/pricing/) ## Pricing tiers Keep your pricing tiers simple by limiting them to 3 tiers. It’s OK if you need to go up to four tiers, but don’t add more than that. Upgrades to paid plans will be driven primarily by features. 1. **Free:** Typically, a SaaS product that includes all the same functionality as the open source software and includes limited access to proprietary features and functionality. 2. **Premium:** Includes everything in the free tier and introduces paid features. Premium tiers typically include some base-level support. 3. **Enterprise:** The highest-paid tier that includes everything from free and premium, plus enterprise-specific paid features and support. [Enterpriseready.io](http://enterpriseready.io) is a great resource to find paid features to build first.
TierFree (Good) Premium (Better)Enterprise (Best)
Potential BuyerIndividual ContributorManager/DirectorExecutive
PriceFree ($0)$$ (e.g. $9)$$$$ (e.g. $99)
Billingper user/mo
billed annually		per user/mo, billed annually
## Open source and free tier are not the same The **open source project is available to download**, **use, and modify via the repo it’s stored in.** There are no restrictions, limits, or constraints on the open source version, but it’s not usually available as a hosted SaaS product. **The free tier is a hosted SaaS product** that includes all the same functionality as the open source software, *and* includes some access to proprietary features and functionality. The goal of the free tier is to drive people to upgrade to paid versions by imposing limitations, like limits on consumption, number of users, storage, or some combination of those things. Limitations within the free tier should focus on quickly driving users to the paid tiers to reduce friction. The intention of providing a free tier is to let people try out the product. Avoid free forever plans. For self-hosted products with no SaaS option, the open source version may be the free "tier," but no limits should be imposed. ## Free tier starts as a premium trial Design the free tier to start as a 30-day free trial of the premium offering and then revert to basic features. If hosting costs are significant, offering a free SaaS tier is not recommended. Provide a generous trial period that doesn’t require credit card information instead. Trials should always require a user account. A well-designed trial period can help users understand the value of the product and encourage them to upgrade to paid plans. ## Only offer annual billing subscription terms Simplify pricing plans by only offering an annual subscription. It makes it easier to instrument and finance your company when all customers are on the same plan, versus segmenting by monthly and annual subscriptions. Companies can offer flexible payment terms and a money-back guarantee if customers have reservations about annual commitments. **Benefits of annual subscriptions** 1. Reduce customer churn 2. Provide cash upfront, which is an effective non-dilutive way to fund the company (cash impact between monthly and annual contracts is substantial). The recurring revenue metric of annual recurring revenue (ARR) versus monthly recurring revenue (MRR) differs based on the yearly or monthly billing subscription renewal period. Upfront billing ensures 12x recurring revenue when customers are billed yearly. Reporting metrics when a company has both annual and monthly customers is duplicated if both options are available to customers. There is a risk of losing some business upfront in only billing yearly, but those customers are more likely to churn regardless. Often, companies start with monthly billing and switch later to annual billing as they mature, but it is better to start with annual billing early on. ## Wrap professional services into a subscription Any subscription service is basically support when the product doesn’t exist yet. It’s important to get the customers on a subscription contract early on (instead of billing professional services hours) so they’ll have access to future product releases. This ensures high retention for the long term. Instead of charging customers for building new features, use it as a point of negotiation for more subscriptions or higher-tier subscriptions. As the R\&D team spends time supporting customer needs, they will gain valuable insights that serve as the basis for proprietary product features. 1. Companies can provide consulting services (hourly rates). 2. Support should only be sold through a subscription contract. 3. With a subscription, customers have access to proprietary features for free. There is no discount for not using the product. 4. It’s encouraged to [do things that don’t scale](https://handbook.opencoreventures.com/operating-principles/#24efeb7b074d80b89444fdd6add8d861) - don’t worry about too much support with early customers. Just make sure it isn’t consulting work. Customers like professional services—purchasing teams have the budget, but not enough time. Have on record that they’ll save XXX hours with your professional services team on board. The company will learn a ton from the professional services team. Make sure there’s internal knowledge sharing and transfer. Looking a few years into the future, companies will have a professional services department (typically <10% of overall revenue). It’s recommended to build this in-house before onboarding external partners so the company retains knowledge acquired during the engagement. ## Subscription agreements Subscription agreements establish the terms and conditions governing the relationship between a company and its subscribers. These agreements provide a framework for the ongoing delivery of products or services to customers on a recurring basis, such as monthly or annually. {% hint style="info" %} ### Subscription Agreement Template [Use the Subscription Agreement Template](https://docs.google.com/document/d/1b52mxaLNhWNBm00XpzTvV4HiysCVMIdC/edit?usp=sharing\&ouid=114605482382680978191\&rtpof=true\&sd=true) crafted by OCV’s legal counsel for OCV companies as of February 20, 2023. Companies must review and edit highlighted sections prior to executing the agreement with customers. {% endhint %} Subscription agreements offer: 1. **Legal protection:** Subscription agreements protect both the company and the customer by establishing the legal terms and conditions of the subscription. This can help to prevent legal disputes down the line. 2. **Clarity and transparency:** Subscription agreements can help to ensure that both parties understand their rights and responsibilities. This can help to build trust and increase customer satisfaction. 3. **Payment and billing:** Subscription agreements can outline the billing cycle and payment terms, including any late fees or penalties. This can help to ensure that customers are aware of their payment obligations and can prevent billing disputes. 4. **Cancellation and termination:** Subscription agreements can specify the circumstances under which a customer can cancel their subscription or under which a company can terminate a subscription. This can help to avoid confusion and provide clarity on the cancellation process. ## Self-serve subscriptions If you’re starting with a low price point and offering self-serve onboarding (e.g., freemium models), it's best to use TOS/Stripe Click-Through for simple recurring payments. This approach minimizes user friction and streamlines transactions. Subscription models and metered billing, on the other hand, are more complex and require more planning and thought, which can delay your launch. Unless you anticipate a significant volume of self-serve paid customers at launch (which is rare), it’s recommended to start with clearly defined pricing and terms of service (TOS). As customers cross payment thresholds, you can track this in your logs and manually invoice them. Once this process becomes unscalable, you can then automate and integrate billing solutions. ## Service level agreements Use a standard service level agreement (SLA) for all customers. Don’t make it up based on what your customer asked for. Custom SLAs can quickly become unmanageable. ## Discount programs As your company grows to over 100 people and you can handle more complexity, you can consider discounted programs. 1. Education: Free version without user limitations or paid offerings at a discounted price 2. Non-profit: Discounted per-user price for paid offerings 3. Startup: 50-75% discount for startups that meet specific criteria. For example, a seed-stage startup with less than $X in funding and less than $X in revenue. Discounting may also happen outside of a specific program on a case-by-case basis. Companies don’t lose their ability to discount by having a list price. Discounting may also happen outside of a specific program on a case-by-case basis. Companies don’t lose their ability to discount by having a list price. # Pricing Page Your pricing page is likely the most visited page on your site after your homepage. This is not the place to innovate; follow the established conventions outlined below.

Simple page format example

1. **Skip useless headers.** Empty headers like “Simple, transparent pricing” or “Choose a plan that’s right for you” are just a distraction. 2. **Offer 2-4 pricing tiers and display them horizontally and above the fold.** 1. Give each tier its own box and button. 2. Call the free plan “Free” and show the price ($0). Don’t call it open source. 3. Use incremental feature lists and don’t repeat features across tiers. 4. Include usage limits and minimum thresholds in the features list. 5. Use “planned” instead of “coming soon” when noting upcoming features. 6. Use “SaaS” to describe hosted services and use “Cloud” to describe managed services. 7. Give each tier its own CTA button. 8. Make the most desired tier the primary call to action. 3. **Show the monthly price but** [**only offer annual billing**](/startup-manual/gtm/pricing#annual-billing)**.** Eliminating monthly subscription options simplifies your billing cycle, gives you more cash up front, and helps prevent churn. 4. **Display the enterprise price.** Including the price helps users self-select into the right category. If the listed enterprise is too much, it’s probably not the right category and acts as a gatekeeper for unqualified enterprise leads. 5. **Use font size and color to show information hierarchy.** Offering too many choices, toggles, and buttons adds friction, making it harder for people to make a choice. Don’t use small print and asterisks. 6. **Use CTA language that users understand, and make sure the action matches the language.** 1. “Sign up” leads to a sign-in page. 2. “Contact us” leads to a form. Don’t use direct email links. Require a company email address and company name as a minimum. 3. “Schedule demo” leads to an event scheduler. ### Handling multiple deployment options 1. **Present one choice at a time.** Help customers select a tier, then present deployment options during the signup and onboarding workflow. If deployment options vary by plan, display as a list item within each tier. 2. **Default to showing SaaS pricing.** If someone wants to self-host, they'll contact you. Put a line at the bottom: "Need to self-host? Contact us about Enterprise." 3. **Avoid:** * Toggles for SaaS vs. Self-hosted vs. Desktop * Icons trying to show which tier supports which deployment * Separate pricing tracks for different deployments. ### Comparison tables It’s duplicative and unnecessary to add a table comparing features across your tiers. Create tier-specific landing pages if you need to provide more information about each plan. Competitive feature comparison tables, however, can add value when they are concise and visually appealing. 1. Call out your top value-add against your competitors in the header. 2. Organize rows to show decreasing feature parity. Common features go at the top. 3. Organize columns from most similar to least. Your product occupies the first column.

Competitive feature comparison table showing decreasing feature parity and a value-focused header.

### Cost calculators Pricing calculators can be helpful when they demonstrate value or savings, such as showing cost comparisons against current solutions, ROI from time saved, or money saved versus competitors, because they help justify the purchase decision. Calculators that simply compute usage-based costs (like "enter your token count to see what you'll pay") tend to add complexity without benefit, as customers struggle to estimate their usag,e and the calculation distracts from clear decision-making. If customers need a calculator just to understand what they'll be charged, your pricing structure is probably too complex and should be simplified first. # Growth Growth is single most important factor in determining whether, how quickly, and on what terms companies can fundraise. OCV companies have \~9-12 months to show meaningful traction. If a company struggles to gain traction, we may wind it down. Growth is shown through usage and revenue metrics. Investors want to see an obvious demand for a commercial product. For an enterprise company, meaningful growth could be a handful of logos at a few hundred thousand in annual recurring revenue (ARR). Early-stage startups operate on a weekly growth cadence: week-over-week (WoW) growth goals and product deliverables. That’s why OCV meets with Pre-Seed companies weekly. The most successful founders drive growth efforts in the early stages. Investors will want to know that you've figured out growth and have a deep understanding of your growth channels. Understanding your growth channels means you know where to spend to grow more. ## In this section This section covers the core levers behind early-stage growth.
TopicPage
Growth Goals
Weekly growth targets, WAU, activation, retention, and carrying capacity.		/spaces/vRFdFk6Bf7sA03777yVY/pages/jAe8dgH9PcXjkjbFzmc3
Content Marketing
Topic selection, titles, and distribution.		/spaces/vRFdFk6Bf7sA03777yVY/pages/aGUwgiMazIbu29NSTUH0
Events & Conferences
When events pay off and how to measure them.		/spaces/vRFdFk6Bf7sA03777yVY/pages/CXcJRuqJYZAQjX8cIccp
Public Relations
News hooks, rapid response, and PR support.		/spaces/vRFdFk6Bf7sA03777yVY/pages/iw04KRNhYcDqAMZExSOl
SaaS Customer Metrics
CAC, churn, retention, LTV, and LTV/CAC.		/spaces/vRFdFk6Bf7sA03777yVY/pages/UDK72NYXp09jSIuIDHb0
# Growth Goals Pre-seed company KPIs should be either usage-based or revenue-based growth, reported weekly. Most companies start by tracking [weekly active users (WAU)](#wau), and revenue becomes the primary metric once you have a first paying user. 10% WoW growth from a [reasonable baseline](#growth-rate-examples-low-baseline-growth-versus-rapid-early-growth) is the bare minimum growth rate. Growth below 10% is an immediate signal to make changes and place new bets to get growth above 10% the following week. **Goals are always binary, measurable, and ambitious.** Production-based goals (“Release this feature” or “Write this blog post”) are important inputs that help you achieve your goals, but are not goals themselves. ## Growth rate Growth is measured by growth rate, which is typically the ratio of new users/customers to existing ones. {% hint style="info" %} **Growth Rate =** \[(Present Value - Initial Value) / Initial Value] x 100 {% endhint %} Early growth numbers can be misleading. In your first few weeks, percentage growth should look astronomical because you're starting from nearly nothing. 1. Growing from 1 user to 11 users is 1,000% growth. 2. Growing from 1,000 users to 1,100 users is 10% growth. The second scenario has a much lower growth rate but adds a lot more users. Target extremely high WoW growth in the first few weeks until you've established a baseline of 1,000 users. Then you can start tracking toward 10% WoW growth.
Growth rate examples: Low-baseline growth versus rapid early growth **Scenario 1: \~10% WoW growth from a low baseline** \ Starting from 5 users and growing at a steady 10–12% each week looks healthy on paper, but the compounding effect is slow to show up when your base is small. By week 10 you have 15 users. The growth rate is right; the baseline is the problem. This is why getting to your first real users fast matters. **Scenario 2: Rapid early growth**\ Starting from the same 5 users, aggressive early acquisition (500%+ WoW in the first weeks) builds the base quickly. By week 10 you have 858 users. **The takeaway** \ Early-stage growth rate is less meaningful than the baseline it's applied to. Your goal in the first month is to acquire users as aggressively as possible and then aim for 10% WoW growth.
## Weekly active users (WAU) Weekly active users (WAU) is your top-level metric that tracks the number of people who interacted with your product each week. How you define an "interaction" should be as simple as possible—someone who logged in or took an action in the product. The definition of this metric should never change. Tracking WoW growth is only meaningful when the definition is consistent. Weekly active users is a helpful, high-level growth metric that you will report on at every [office hour](/founder-experience/office-hours#agenda-template). However, founders should be looking under-the-hood metrics to understand the health of this metric and what's driving it. Engagement and retention metrics add color and insight into what's driving aggregate WAU growth. Engagement metrics tell you how users are behaving in the product and retention metrics tell you if they are getting real value. You should quickly familiarize yourself with some concepts that will help you get deeper visibility into what's driving growth: [user activation](#user-activation), [cohort retention analysis](#cohort-retention-analysis), and [carrying capacity](#carrying-capacity). The video from YC partner David Lee is the clearest explanation we've found of how retention works under the hood, and why it's the primary driver of sustainable WAU growth. {% embed url="" %} ## User activation User activation is a helpful concept for understanding your product onboarding funnel. Founders need to make a judgement call on how to define onboarding and what completion looks like. You want to define onboarding completion as a step or action that user completes whereby there's a high likelihood that user will stick around. That action is your activation milestone. An activation milestone is the behavior that most reliably predicts retention. Finding it requires looking at your retained users and asking: what did they do that churned users didn't? A peer-to-peer payment app might consider activation when someone links a debit card or sends their first dollar. Or they define activation as sending two transactions because there's a large drop-off after the first. So their milestone is two transactions, and the entire onboarding funnel is built around getting users there. [Mint's internal concept of "time to pie"](https://hbr.org/2015/01/intuits-ceo-on-building-a-design-driven-company) found that once a user saw a pie chart of their spending by category, they were very likely to be retained. Everything before that moment (signing up, connecting financial accounts, etc.) counted as an interaction, but didn't predict retention the way that single moment did. So they defined activation around it and treated reducing time to pie as a core product initiative. A special form of activation is converting to a paid user. Founders often track their paid conversion rate as well as their activation rate. Activation rate is the percentage of new users who reach your activation milestone. Once you've defined the milestone, your onboarding funnel exists to get users there as fast as possible, and activation rate tells you how well it's working. The milestone doesn't have to be complicated. The right milestone is whatever behavior most reliably predicts that a user will stick around. ## Cohort retention analysis [Watch David Lieb's video on Cohort Retention.](#wau) User retention is the most honest signal of whether your product has value. Cohort analysis is how you measure it. A cohort is a group of users defined by when they first used your product. Cohort analysis tracks how many users from each group return in subsequent weeks. The simplest starting point is tracking new versus returning users each week, and doing the same for activated users specifically. A cohort analysis that blends all users together can hide what's actually driving or dragging retention. Cutting users in different ways reveals which segments retain well, which don't, and why. Segment your cohort analysis by acquisition channel to see which channels are producing durable users and which are inflating WAU without contributing to your retained base (this requires tracking attribution). A growing WAU number driven by paid acquisition can look healthy until those users are isolated and found to churn at twice the rate of organic users. If paid marketing is assumed to be profitable based on average life time value (LTV) across all users, but the LTV of paid users is significantly lower than organic, that spend may not be profitable at all. Other useful dimensions to cut by: 1. **Acquisition channel:** paid, organic, referral, direct 2. **Cohort timing:** comparing older cohorts to newer ones tells you whether product improvements are actually moving retention 3. **User profile**: company size, industry, or role for B2B; demographic or geography for consumer 4. **Device or platform**: particularly relevant if your product experience varies by surface 5. **Free versus paying users:** paid and free users behave differently, and blending them hides both; segmenting by paid versus free shows whether paying customers are actually engaging with the product, and when they're most likely to churn When a segment retains well while others drag the overall number down, it usually means one of two things: the product is a strong fit for that segment and a weak fit for others, or onboarding works better for one type of user. Either way, it points to where to focus, whether that's doubling down on a channel, tightening acquisition targeting, or fixing a specific onboarding gap. ## Carrying capacity Improving retention moves the growth curve, but how far your growth can actually go depends on how many new users you're adding, and whether that number is growing. Carrying capacity tells you how many users your current growth engine can sustain at steady state. {% hint style="info" %} **Carrying capacity =** users added during a period ÷ % of userbase that churns during the period {% endhint %} If you're losing a fixed percentage of your user base every period, you need a constant stream of new users just to hold steady. At some point, those two forces balance out: the number of users you're gaining equals the number you're losing. That equilibrium is your carrying capacity. Carrying capacity example: If each week you are, 1. Adding 5 new users 2. Losing 5% of your base 3. Ceiling = 100 users If you add 10 new users per week at the same churn rate, and the ceiling doubles to 200. The ceiling isn't fixed but it's predictable, given a constant acquisition rate and a constant churn rate. However, the math only applies when new user acquisition is linear, meaning you're adding roughly the same number of new users every period. If that's the case, you will eventually hit your ceiling no matter how good your retention is. The only way to avoid a hard ceiling is to grow acquisition as a percentage, not just in absolute terms. If you're adding 10% more users every week than the week before, your acquisition is compounding along with your base, and a fixed carrying capacity doesn't really apply. This is the mechanic behind the 10% WoW growth target: week-over-week percentage growth keeps your acquisition expanding in proportion to your base, which is what prevents you from flatlining. There are two levers to raise your carrying capacity: * Reduce churn * Increase new user acquisition If you're adding the same number of users every week and growth is slowing, that's not a signal to double down on the same acquisition channel. It's a signal to evaluate whether you're approaching equilibrium, and whether the right move is to find a new lever, improve retention, or both. ## Later-stage growth benchmarks As companies progress to later stages, there are a few other well-known benchmarks you may hear about. ### Triple Triple Double Double (T2D3) This is a growth benchmark for early-stage companies to go from $1-2M in ARR (typically Series A stage) to $100M+ ARR in 5-6 years. So if you start at $2M ARR, you'd go: $2M → $6M → $18M → $36M → $72M → $144M ### The Rule of 40 This is an efficiency benchmark that's more relevant once you're at scale (typically $50M+ ARR, though people debate the threshold). It says your growth rate + profit margin should exceed 40%. For example: 30% growth + 15% margin = 45%, good. ### Burn multiple This is an efficiency benchmark that tells you how many dollars you're burning to generate each dollar of new ARR. Lower is better, but the expectations are different at each stage of the company. Read [David Sacks' substack article](https://sacks.substack.com/p/the-burn-multiple-51a7e43cb200) if you want to know more. # Content Marketing Content marketing is one of the most cost-effective ways to let people know you exist. Companies that get content marketing right from the start tend to see higher rates of success due to the ratio of attention versus time—you can write a blog post in a day, but it takes weeks of prep work and a lot of money to attend an event. Writing about features, functionality, and your overall vision for the company is a low-cost way to gather input and reactions to the company's direction. It’s natural, especially for a CTO, to feel very uncomfortable focusing on marketing, and the inclination is to focus on building better software. But for most startups, <5% of your target market has heard of your open source project compared to the market leader. Spreading awareness is a bigger lever than improving the product. ## Content topics One of the best places to source content is from the friction you experience in your daily work. Instead of setting aside time to think about blog post ideas, document your most frustrating work moments. Take note of heated discussions and debates within your team and community. The best fodder for exciting content is when you feel like you’re running into a wall on an issue or have an ah-ha moment. These experiences are authentic; chances are, you aren’t alone in whatever friction you feel. 1. **Building in Public:** Appeals to technical audiences by exposing how technical decisions are made and implemented. 2. **The Startup Journey:** Appeals to your community and potential customers in a relatable way. It humanizes your business and gives customers, investors, employees, and audiences something to connect with emotionally. 3. **Take a Stance:** Establishes you as a forward-thinker with strong opinions about your industry. It sparks broad discussion and is a way to gain name recognition and traction.
Angle & AudienceHow to talk about it

Building in Public

Technical

  1. The problem and the criteria for implementation.
  2. The potential solutions
  3. Final decision and tradeoffs made
  4. The process of implementation, including challenges
The Startup Journey
Community
  1. Share vision & mission progress updates
  2. Explain how you're building differently
  3. Share big company milestones and tie them back to the overall mission and vision.
  4. Recognize, spotlight, and thank contributors
Take a Stance
Industry
  1. Share an opinion on newly released technology
  2. Challenge strongly held beliefs about commonly accepted ways of doing things and propose an alternative
  3. Propose solutions to a commonly known or felt issue
## Hiring writers We do not recommend hiring a full-time writer or content marketer at the pre-Seed stage. Depending on your content marketing strategy, it may be useful to hire a freelance or contract writer for support. When working with writers, it's important to establish clear expectations and communication channels. Always establish clear ownership of the content. Contractors should assign all copyrights to the company they are contracted by. This means you are free to use, modify, and share the content anyway you choose. We highly suggest you have the contract writers ghostwrite for you and publish under your name. This will help position you as a thought leader. The default OCV contract stipulates that content will be published under the founder's name. ## Competitor content Startups are underdogs—the odds of success are not in your favor, and you are competing with large, established companies. Getting early attention and awareness is key to the company’s success. Creating competitive content that picks on the weaknesses of the industry leader is one way to leverage an established company’s clout to bring attention to your company. As a general rule, focus on the largest competitor that is primarily known for the same type of product as yours. Don’t go after other small underdogs. The bigger and more popular the company, the less likely you'll face backlash for commenting on what they are failing at. It’s unlikely the company will react because you are too small. And if they do, it’s great awareness for your company. Create a Google Doc and set up Google alerts to start recording the company’s activities. Start by looking at recent, negative press. Go back a few years if necessary. You can break up the activities into two categories: 1. **Product:** Create a product comparison and identify areas where the product is weak. Look for where there have been numerous customer complaints. 2. **Newsjacking:** Start a list of decisions the company has made that have received negative attention. For example: deprecating a favorite feature, increasing prices, or hiding a security breach. Select a competitive angle and double down on it. What is the issue that stands out the most? Deeply research the issue and write an opinion piece on the decision and its impact on users or the industry. Make diagrams, charts, and other visuals when applicable. If others have written about the issue or shared how they were impacted by a decision the company made, reach out and ask to interview them about their experience and perspective. This can be an informal interview. Ask to record and make sure you get permission to quote them. If the company makes an announcement, especially if it’s potentially controversial or impactful, be prepared to generate a [rapid response](/startup-manual/gtm/growth/public-relations) to the news. **Examples:** 1. [Rocky Linux responds to the news of Red Hat closing off RHEL code](https://rockylinux.org/news/keeping-open-source-open/) 2. [Salesforce stages an “End of Software” protest at Siebel’s Annual conference and follows up with an “End of Software party”](https://entrepreneurshandbook.co/the-staged-protest-that-kickstarted-the-growth-of-salesforce-into-a-billion-dollar-company-a53d6995f762) 3. [GitLab responds to the news of GitHub being acquired by Microsoft](https://about.gitlab.com/blog/2018/06/03/microsoft-acquires-github/) ## Optimizing blog post titles Titles should include 2+ nerdy keywords. Some examples of nerdy words include names of competitors, names of complimentary software, coding languages, popular open source projects, and trendy engineering concepts. Here are the most common elements of great blog post titles: 1. Controversial opinions 2. Exciting takeaways 3. Numbers and percentages 4. Names of companies or projects and names for trendy concepts Avoid generic and clickbait blog post titles. The character count should not exceed 80 characters. ### Title examples Titles that are specific and make a statement do better than titles that are lofty and generic. Avoid overly simplistic blog post titles like “Autoscaling 101” or “Choosing the best software for your needs.” The title should give away the most interesting key point of the article. | **Generic title (boring)** | **Specific title (interesting)** | | ----------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------- | | Kubernetes autoscaling 101: How to choose the best solution for your needs | Event-driven autoscaling saves 60% of cloud costs compared to HPA | | The downsides of SSO | Centralizing your sign-ins with SSO decreases your attack surface and increases your attack vector | | Backups, versions, and project restoration: how all these pieces fit together | FreeCAD’s handling of backups and versions doesn’t serve users, Ondsel fixes this | **Examples of excellent blog posts:** 1. JSONnet is the perfect solution for real-time monitoring with Ceph dashboards 2. Here's how we resolved an ancient flamewar by slowing the conversation down 3. Using Ceph for local storage is an **anti-pattern** that kills performance 4. When forums suck: The high cost of cheap conversation 5. FreeCAD's Copy+Paste is a hot mess 6. Mining for gold in the issue tracker **Examples of how to improve titles:** | **Bad (generic)** | **Better (More specific)** | **Best (Crux front and center)** | | -------------------------------- | ----------------------------------------------------- | ------------------------------------------------------------------------------ | | A pricing framework for startups | Good, better, best: A pricing framework | Your premium product offering should cost 10X more than the entry-level option | | Open source business tips | How we run our business on open source software | Why we’re ditching Google Docs for Next Cloud | | AI: Gaming uses | How to use AI tools to create engaging games | Make game assets 5X faster than Unity with Stable Diffusion | | Building a software startup | Managing a hyper-growth startup requires rapid growth | Growth solves everything: How to achieve 20% WoW user growth | ## Blog post images and media Try to include supplemental images and media in your blog posts. 1. Include graphs and charts to visually represent any data you are presenting. 2. Include tables to visually identify any comparisons you are making. 3. Include screenshots of relevant software or code. 4. Include videos if they provide supplemental information or context. Make sure to summarize the content of the video within the article. ### Stock photos Don’t use stock imagery in your blog posts. It comes across as unauthentic and incredible. It’s better to include no image than to include a stock image. Screenshots showing what you are referring to in the blog post are good alternatives to stock imagery. ## Content distribution New companies need to work hard to get their content in front of their desired audience and build that audience. Publishing on third-party sites, cross-posting to various social publishing networks, leveraging industry influencers, sharing content on appropriate discussion forums, and pitching press are just a few ways to start distributing content to gain attention. The strategy is going to look different for each company but start by asking yourself a few simple questions: 1. **Does my project have an active community, and do I have good standing there?** If the answer is yes, leverage this. Share content with your community on forums and ask them to contribute through guest posts, tutorials, or video content. 2. **What specific publications are my customers reading?** Make a list of the top three and develop a few pitches specifically for publication on their site. Reach out to OCV’s Head of Content for assistance pitching publishers. 3. **Who are the biggest influencers in the industry, and do I have any mutual connections?** This could be someone with a YouTube channel, a large social media following, or a well-known speaker. 4. **Are there industry-adjacent companies with reputable blogs I can guest publish on?** Think about companies that could be potential product partners in the future. They should be speaking to a similar audience. ### Cross-posting Consider publishing to third-party sites that allow cross-posting. Cross-posting is when you publish an article on more than one site. Include a link back to the original article on your website. Cross-posting on a third party site gets your content in front of a relevant audience while you build up brand recognition and a social media following. ### Link sharing on forums Share links to content on community sites like Hacker News, Reddit, and any other forum relevant to your business. Follow the contributor guidelines for each forum. Don’t spam these spaces. **Hacker News** Hacker News is a link-sharing site run by Y-Combinator that focuses on computer science and entrepreneurship. The primary guideline for submitting content to Hacker News is “anything that gratifies one’s intellectual curiosity.” Content that goes viral on Hacker News can generate tens of thousands of website views. This is an excellent way to gain the attention of the developer community. Hacker News is a community, so please familiarize yourself with the [guidelines](https://news.ycombinator.com/newsguidelines.html) before participating. Anyone can create an account, and you gain karma points over time through participation. Users earn karma points when their submissions and comments are upvoted and lose karma points when they are downvoted. Users need 30 karma points to flag a submission and 500 karma points to downvote. Karma points do not affect submissions. Creating genuinely exciting content with a great title is the best way to get your submission upvoted. “Self-promotion” on Hacker News means sharing your own content, it does not mean the content itself is self-promotional. Avoid being shadow banned by the moderators by regularly sharing content that is not your own. Getting your content organically shared on Hacker News may be challenging without much social media following. It’s OK to post links to your content on Hacker News, but it’s better when someone else posts. Here are some general tips for contributing to the Hacker News community: 1. Regularly share content that is not your own. A good ratio is 5:1. For every 5 articles you share, one can be your own content. 2. Look at the homepage daily and interact with content that is interesting to you by upvoting and participating in the discussion thread. 3. Search for topics that are of interest to you and read the discussions. This may spark new content ideas for you to write about. 4. If a discussion is happening on a topic you are an expert in, contribute to the conversation. ## Paid Advertising Paid advertising is one demand generation method to consider, but it’s typically better to start with unpaid marketing efforts like content marketing and outbound prospecting. Set clear goals before starting paid advertising. Goals will differ based on your desired outcome. # Events & Conferences We typically don’t recommend spending money attending conferences. Most are generic and yield poor returns. Lost time before and after an event can also distract from primary goals. If an event is strictly about your technology and the audience loves what you are making, it’s worth considering. The audience should comprise potential customers, i.e., individuals who can generate revenue for your business. Otherwise, it is extremely hard to get a good return for the time and money invested. ## Conferences Tiers of participation can range from attending and presenting to hosting a booth and sponsoring. Be clear about your goal of attending the conference. For example, “generate X# of sales leads” is a measurable goal. “Increase brand awareness” is not. **Examples of reasons to attend a conference and measurable goals** 1. Recruiting: generate X# of qualified applicants for XYZ role(s). 2. Lead generation: collect X# of qualified leads and contact leads within 3 days. 3. Events can only help with the initial lead generation. The follow up is what is more useful and events are where the job is just starting. 4. Community building: add X# of people to the Discord group. 5. Investor relations: secure X# of meetings with specific investor firms. ### Conference booth **Include an incentive.** When hosting a conference booth, include an incentive to get people to visit your booth and sign up for something. Example: 50% off the first year’s subscription. **Strong messaging.** Booths that tend to do well at events have strong, targeted messaging. To increase your chances of meeting your event goal, consider creating event-specific messaging tailored to the audience attending the event. For example, if the event is about a specific technology that your product uses, make that front and center. ## Events for t**eam bonding** Team building is not a strong enough reason to sponsor or host a booth at an event on its own. You can hold team-building events separately from conferences. If you pair an event with team bonding, arrive a few days early for dedicated team-building time. # Public Relations News is timely and interesting to the general public. Startup news tends to fall into the following categories: 1. Product launches and new features 2. Integrations and plugins with well-known products 3. Fundraising 4. Significant new hires 5. Company milestones: Deals with big-name customers, user growth, MRR/ARR growth ## Early-stage PR activities PR activities for early-stage startups will typically focus on: 1. **Press releases:** Writing and distributing press releases to the company website and the newswire. 2. **Media relations:** Pitching news, stories, and company experts to journalists. 3. **Content placement:** Publishing content authored by someone within the company on third-party sites. ## Rapid Response Responding to industry events is an opportunity to assert your company as a thought leader and as a relevant voice in your industry. These are drop-everything, all-hands-on-deck moments. Founders drive the urgency and excitement around these moments. A well-executed rapid response is like a sonic boost to your company’s visibility and credibility. Not all rapid responses will be successful, but learning from each opportunity will improve future odds. When a rapid response is needed, the founding team must react quickly to assess the situation and create and publish a response. The response should reflect the team’s authentic viewpoint on the situation. This is an opportunity to do a thought exercise around your company’s niche in the market and where you can add value to the situation. ### Events to watch for 1. [Competitor moves](/startup-manual/gtm/growth/content-marketing#competitor-content) (e.g., acquisitions, mergers, product announcements, licensing changes) 2. Industry changes (trends, standards, policy, law) 3. Security breaches ### Common response types 1. Comment on how the event impacts the industry and why your company’s mission/vision is relevant. 2. Provide a solution, preferably using your product. 3. Report on the situation in cases where you have insider knowledge. Founders should set keyword alerts for ongoing new monitoring. ### Rapid Response process Speed is paramount to a successful rapid response. When a rapid response opportunity arises, alert the company and OCV’s head of content and COO for support. Rapid response communication with OCV will happen in the company’s OCV Slack channel. 1. As soon as a rapid response is alerted, the CEO/CTO creates a Zoom call, and all necessary stakeholders join. This could mean the entire company. 2. Create a shared document for collaboration and begin populating it with links and comments on the situation. Determine how best to proceed with an external message and create a plan. Assign activities and due dates to appropriate stakeholders. 3. Once a plan has been established, end the Zoom call and set a check-in call for 2 hours later. 4. Resume the Zoom call after 2 hours to follow up on deliverables and assess any additional information. 5. Coordinate the publishing of public materials with social media, community responders, and anyone else involved. 6. Assess results and progress as you release materials. For example, did you tweet about the situation and get a lot of attention from that tweet? Should the topic of the tweet become a blog post? 7. Continue this rotation for 3-5 days, or until the news cycle has ended. ### Rapid Response tactics Each response opportunity will require a custom plan. This is a generic list of actions needed to execute a rapid response: 1. Internal documentation of the situation, including official company stance and response. 2. External-facing blog post and/or YouTube video 3. Product demo(s) & documentation 4. Social media posts 5. Comments on Hacker News and/or Reddit 6. Swag giveaways, coupon codes 7. Press briefings/contact press 8. Graphs and data science 9. In-depth technical articles 10. User profiles that show the human side of the story 11. Interviews with journalists and providing on-the-record commentary 12. In-person events and meet-ups ## When to hire a PR consultant Hiring a PR consultant is a good option for companies expecting one-off announcements and/or for companies that are pre-fundraising and are doing well with owned content (content published to the company blog is getting traffic; traffic is growing). A PR consultant is retained for a single event and will manage the press release, press outreach, and other planned communication strategies. The benefit of using a consultant is that they typically don’t require an ongoing contract and fee. ## When to hire a PR firm A public relations (PR) firm is a professional services company that specializes in managing a company or individual's public image and reputation. The goal of a PR firm is to build and maintain a positive public image for its clients and to help them communicate effectively with their target audience. Most companies will hire a PR firm ***after*** a successful first round of fundraising, but there is no set timeline for the “right” time. It’s dependent on the company’s ability to demonstrate either of the following: 1. A well-built, relevant story to tell 2. A viable product with early traction (investment, customers, new hires, etc.) 3. A steady drumbeat of potential product and company news (\~1/quarter). A PR firm can help develop messaging and positioning, but the company should first have a solid idea of its story, product vision, and ideal audience profile. The PR firm can help fine-tune and adjust to make it relevant to current trends and conversations happening within the industry. Hiring a PR firm is typically a long-term commitment. Companies will get the most out of this vendor relationship if they have a steady stream of news and announcements to promote. # SaaS Customer Metrics Understanding key drivers of your retention and churn rates will help you deploy company resources from product development to sales/support team staffing. ### Customer Acquisition Cost Customer Acquisition Cost (CAC) is the cost to acquire a new customer. It includes all expenses related to marketing, sales, and any other activities aimed at attracting and converting new customers. {% hint style="info" %} CAC = Total Marketing and Sales Expenses / Number of New Customers Acquired {% endhint %} If a company spends $10,000 on marketing and sales efforts in a given period and acquires 100 new customers during that time, the CAC would be: $10,000 / 100 = $100 It's important to track and analyze CAC to ensure that it aligns with the lifetime value of the customers. If the cost of acquiring customers exceeds their lifetime value, it may indicate an unsustainable business model. ### Customer Retention Rate Customer Retention Rate (CRR) is the percent of customers you retain over a period of time. It's also called Gross Logo Retention. A good annual CRR target is 90%. {% hint style="info" %} ## # of Customers at End of Period - # of New Customers Acquired During the Period / # of Customers at the Start of Period x 100 {% endhint %} The Customer Churn Rate is 1 - Customer Retention Rate. ### Revenue Retention Rate The Revenue Retention Rate is a metric that measures the percentage of revenue a company retains from existing customers over a specific period of time. It helps businesses understand their ability to generate ongoing revenue from their customer base. To calculate the Revenue Retention Rate, you can use the following formula: Revenue Retention Rate = (Revenue at End of Period - Revenue from Lost Customers) / Revenue at Start of Period x 100 Alternatively, the formula can be expressed as: Revenue Retention Rate = (Revenue from Retained Customers) / Revenue at Start of Period x 100 Example: A Revenue Retention Rate of 100% or higher indicates that a company is successfully retaining existing customers and generating additional revenue from them. A rate below 100% suggests that the company is losing revenue from its customer base. Monitoring and improving the Revenue Retention Rate is essential for SaaS businesses as it directly impacts their revenue growth and profitability. High retention rates indicate customer satisfaction, loyalty, and the potential for upselling or cross-selling opportunities. By analyzing the Revenue Retention Rate, businesses can identify areas for improvement, such as addressing customer concerns, enhancing the value proposition, or optimizing pricing and packaging strategies. ### Customer Life Time Value Customer Lifetime Value (CLTV or CLV) is a measure of the total revenue a customer is expected to generate for a business throughout their entire relationship with that business. It helps businesses understand the long-term value of acquiring and retaining customers. To calculate Customer Lifetime Value, you can use the following formula: LTV = Average Revenue Per Customer \* Customer Lifespan The average revenue per customer is the average amount of revenue a customer generates for the business in a given period, such as a year. The customer lifespan is the average duration a customer remains engaged with the business. For example, let's say a subscription-based SaaS company has an average revenue per customer of $100 per month, and the average customer remains subscribed for 24 months. The Customer Lifetime Value would be: LTV = $100 \* 24 = $2400 To calculate Customer Lifetime Value (LTV) from churn rate, you can use the following formula: LTV = Revenue per Customer / Churn Rate The revenue per customer is the average amount of revenue a customer generates for the business in a given period, such as a month or a year. The churn rate represents the percentage of customers who stop using the product or service during a specific time period. For example, if the revenue per customer is $100 per month and the churn rate is 10%, the LTV would be: LTV = $100 / 10% = $1000 Please note that this is a simplified calculation and does not take into account factors such as customer acquisition cost or discount rates. It provides a basic estimation of the Customer Lifetime Value based on the given revenue per customer and churn rate. ### LTV/CAC Ratio The LTV/CAC ratio is a crucial metric for SaaS businesses. It measures the relationship between the Customer Lifetime Value (LTV) and the Customer Acquisition Cost (CAC). This ratio helps determine the long-term profitability of acquiring customers. To calculate the LTV/CAC ratio, divide the Customer Lifetime Value by the Customer Acquisition Cost: LTV/CAC Ratio = LTV / CAC A high LTV/CAC ratio indicates that the lifetime value of a customer exceeds the cost of acquiring that customer. This is a positive sign as it suggests that the business is generating more revenue from customers over their lifetime than it spends to acquire them. On the other hand, a low LTV/CAC ratio indicates that the cost of acquiring customers is higher than the value they generate over their lifetime. This can be a warning sign as it may lead to unsustainable business growth. A ratio of 3:1 or higher is generally considered favorable, indicating a strong return on investment in customer acquisition. However, it's essential to analyze the ratio in the context of the specific industry and business model. # Sales Pre-Seed stage founders (typically the CEO) own the sales function. With lean teams consisting of just founders and a few engineers, hiring a dedicated salesperson rarely makes economic sense. More importantly, founders need constant contact with users and customers to discover product-market fit. Your initial hypothesis and understanding of the problem, market, and product are essential in driving sales efforts. Don’t worry about not knowing how to sell at this stage—focus on understanding your customer. Spending hours planning target markets, messaging frameworks, or elaborate sales processes is a distraction at this stage. Instead, keep it simple: talk to users and prospective customers relentlessly, rank your hypotheses, and prove them right or wrong quickly. ## Talk to users and customers Your primary job is to understand customer needs and steer the product toward maximum revenue potential. This requires continuous engagement with both users of your open source project and potential commercial customers. **Talk to customers and users constantly.** They provide the insights that inform product development decisions. Building in isolation is one of the most dangerous mistakes pre-seed companies make. Potential customers don't buy features—they buy solutions to their most pressing problems. Focus on the heaviest users of your open source project, as their needs often represent the most valuable commercial opportunities. **Avoid the consultant trap.** While industry experts can supplement user feedback, generalist consultants cannot replace direct customer conversations. Agencies typically follow rigid internal methodologies to produce generic deliverables that aren't useful for the highly iterative nature of early-stage product development. You need the real-time feedback loop that only comes from talking directly with prospective customers. ## Engage in market conversations Build brand awareness through active participation in relevant discussions on platforms like Hacker News, LinkedIn, Reddit, and industry-specific forums. This engagement serves two purposes: it identifies potential customers and heavy users, and it helps you understand the problems they're trying to solve. Focus on engaging directly with individuals rather than broadcasting marketing messages. The goal is understanding their problems and how your solution might address them. When engaging potential customers, focus on understanding their current state and pain points: * "Can you tell me how you're using \[open source project/similar tools/current processes] today?" * "What's the hardest thing about that? Why is that hard? How often does this problem occur?" * "Why is it important to solve this problem? How do you solve it now?" Follow up with clarifying questions: "Can you tell me more about that?" or "What do you mean by that?" These conversations should be about understanding problems, not showcasing solutions. ## First Customers Your first customer acquisition will look completely different from later customers. Most open core businesses eventually target large enterprises, but these can be difficult to land initially. Don't be afraid to start with smaller customers or broader use cases while building your enterprise pipeline. **Key principles for first customers:** 1. **Don't anchor too much on ideal customer profiles.** Beggars can't be choosers—get your first customer by any means necessary. 2. **Let customers force product requirements.** Ask: "What problem do you have that you're dying to pay money to make go away?" Let their needs drive your development priorities. 3. **Do things that don't scale.** Once you land your first customer, provide exceptional, hands-on service that wouldn't be sustainable at scale but creates deep customer success and learning opportunities. 4. **Don't focus heavily on contract value initially.** Getting reference customers and learning from their implementations is more valuable than maximizing early revenue. ### Early enterprise customers While challenging to acquire, large customers often provide the best product insights. They have sophisticated needs, domain expertise, and request features that smaller customers also want but can't articulate. These relationships can be worth pursuing even at lower initial contract values because they drive valuable product development. ## Leverage the open source community The communities around your open source project are your best source for identifying potential commercial customers. Look for the heaviest users—companies that have implemented your software extensively, contribute back to the project, or ask sophisticated questions about enterprise features. These communities reveal not just who might pay for a commercial solution, but also what problems are most acute for real users in production environments. ## Ask for customer intros Be aggressive about asking for introductions to interesting companies from everyone in your network. OCV will introduce founders to connections in our network. We recommend using Happenstance and filtering to first-degree connections. Experiment with a few different potential ICP profiles and find companies that match those profiles from your connected networks. When requesting an introduction, first confirm that your connection is OK with making the intro. Then send a self-contained email that the recipient can forward directly. Send a separate email for each request. For example, if you ask for 5 introductions, send 5 draft messages. The email should include: 1. Company description 2. How the recipient can use your technology 3. Your ask (Let’s schedule time, a demo, etc.) {% hint style="info" %} #### Example email **Subject:** Fortify Gobii’s API‐First Agents with Enterprise-Grade Security Rich, thanks for offering to introduce me to Gobii, blurb below, [Garak](http://getgarak.com/) is the commercial evolution of NVIDIA’s Garak—an industry-leading LLM red-teaming framework built by the former [Google Safe Browsing lead](https://www.linkedin.com/in/divyachitimalla/) (protecting over a billion users). We stop data leaks, prompt injections, tool misuse, and drifting behavior throughout agent deployment and production. Gobii’s API-first architecture can plug directly into Garak’s SDK to automatically audit every incoming request and outgoing response—catching PII exposure and injection attempts at the API gateway. Our real-time guardrails ensure that any malicious or malformed prompts are sanitized before reaching your core agent logic. Can we set up a quick call to discuss embedding Garak into Gobii’s API pipeline? Best regards, Divya {% endhint %} ## Directly engaging potential customers Doing things that don’t scale in engaging users directly will help founders more deeply understand their customers’ motivations and get honest feedback. Advertising efforts alone will not directly provide the essential insights that come from proactive sales in informing strategy for early-stage companies. Outreach to potential customers should be proactive and focused on understanding their problems, not showcasing ideas that are not direct solutions. Some of the questions founders should be asking customers: * Can you tell me how you are doing/using \[open source software project, substitute for product, similar processes] today? * What is the hardest thing about that? Why is that hard? How often do you have to do this? * Why is it important to solve this problem? How do you solve this problem now? ## Increase conversions with personalized outreach Personal outreach from the CEO to users can drive conversion and provide valuable feedback. When users experience personalization and feel understood, [they experience a halo effect](https://www.cmswire.com/customer-experience/psychology-and-science-behind-modern-customer-experience/)—positive feelings evolve into a good impression of the company and drive brand loyalty. [Research shows](https://www.ceo-review.com/the-importance-of-personal-connection-why-being-the-face-of-your-brand-matters/) that when people feel more connected to a brand, they spend more with that brand. People love getting a personal touch from a company’s CEO or CTO. Depending on volume, send personalized outreach based on two triggers: new signups and new trials. New trials are a higher-intent proxy, but if the number of new trials is low, expand your outreach to signups. High volume will require filtering to focus on high-intent prospects. Use a tool like [Apollo.io](http://Apollo.io) to enrich user data and automate your outreach. ### Set up an automated outreach sequence on LinkedIn LinkedIn profiles serve as a strong proxy for ability and willingness to pay—users with professional profiles convert at significantly higher rates. Email can work in some cases, but it’s a more cluttered space. For developer products, LinkedIn-only filtering may exclude some high-value users. 1. **Set up filtering.** Track trials in Stripe, push users to Apollo for enrichment, then filter by LinkedIn enrichability and location (conversion rates vary significantly by region). Expect \~10-15% of signups to pass filters. 2. **Automate outreach.** Set up automation in your LinkedIn account to send connection requests to filtered users. Be careful about account security and flag risk. The 200 weekly connection limit becomes your bottleneck, so prioritize accounts based on filters. 3. **Experiment with messaging.** Test 100+ variations to find what resonates. Thank users for being early adopters and ask for feedback on how to better serve them. Ask for their "wishlist" items they want built. Keep it personal and brief. Make it collaborative, not a sales pitch. 4. **Scale with your team.** As you grow, have 7-8 team members doing outreach through pods focused on PLG vs. sales-led growth. Run ABM campaigns with your whole team for target accounts. Keep the CEO involved for the highest-value prospects. 5. **Aggregate feedback.** Use churn software like [Churnkey](https://churnkey.co/) to collect structured feedback from LinkedIn, cancellation surveys, and other touchpoints. Upload to a custom GPT monthly. ## Handling inbounds when you don't have a product When prospects reach out before your commercial product is ready, treat these as discovery opportunities, not traditional sales calls. Your approach should focus on understanding their needs while positioning yourself as a potential solution. ### Lead with questions, not pitches Focus on understanding customer needs during early discovery calls. What caused them to reach out? What have they tried internally? What other solutions are they evaluating? Are they facing current production problems or anticipating future issues? Use a qualification framework like BANT to assess whether prospects have: * **Budget**: Money to spend on solving this problem * **Authority**: Decision-making power or influence over the solution choice * **Need**: A genuine pain point your product could address * **Timeline**: A window for making a decision ### Handle pricing questions strategically When pricing comes up, respond with: "Right now, I want to understand what your problems are and how we might be helpful. I have questions to get that context, then I'll come back with a proposal." Don't hide that you're early-stage. Frame it positively: "We're working with select design partners to ensure we're building exactly what solves their specific needs, rather than trying to sell an off-the-shelf solution." **Always set the expectation that you'll charge them.** This qualifies their seriousness—if they won't pay, the problem isn't significant enough to warrant their attention or yours. ### Position as a consultant Approach each conversation as an unpaid subject matter expert, helping them find the right solution, whether or not that's something you'll build. Be willing to help them identify if they don't need you—it's better to discover this early than waste time on unqualified prospects. **Don't trade on their ignorance; capitalize on their sophistication.** If they could solve their problem with your open source project alone, help them understand why they're considering a commercial solution. Ask directly: "Since \[open source project] is available, why not run a POC yourself? What value do you see in a hosted/managed solution?" **What you're selling at this stage is you**—your expertise, background, and ability to solve their specific problem. ## Trials, Proof of Concepts, and Pilots ### Proof of Concept A Proof of Concept (POC) is a short-term feasibility test. Customers will use a POC to test your product in their environment and assess if it's a good fit before implementing it on a large scale. They are limited in scope and have clearly defined success metrics. The goal is to move from proof of concept to paid customer as quickly as possible while gathering the product feedback necessary to serve future customers better. 1. **Discovery and scorecard:** Establish clear, quantifiable benchmarks for success. Use a shared scorecard to assess whether the product achieves the goals and requirements of the customer or not. A good scorecard is objective, binary, and measurable. If the success criteria are met, it should lead to a purchase decision. The vendor (you) should define the parameters of the scorecard based on a discovery discussion with the customer about their needs and goals. Ask the customer to assess how your product compares to their current solution. 2. **Timeline and terms:** Set timelines and customer engagement expectations. The POC should have a clear end date and a check-in cadence to measure how you are benchmarking against the scorecard. The timeline should be reasonably aggressive. Set expectations for the level of customer engagement required. Identify which stakeholders need to be engaged and supportive. 3. **Pricing:** Discuss pricing upfront to ensure commercial intent. \*\*\*\*Establish an “on by default” price before starting the POC. The customer is automatically rolled into the paid plan once the POC period expires and/or the scorecard is achieved. Consider charging for the POC period if you are doing a significant amount of implementation work and support. You can offer a generous discount, but paying for a POC is a good filter for the seriousness of the customer. 4. **Post-POC engagement and stickiness:** Identify the metrics that indicate ongoing product usage and value. If a customer doesn’t continue using your product post-POC, they are highly likely to churn. {% hint style="info" %} #### Script: Discovery call and scorecard proposal > *Before we get a POC, it's important to us to understand what you are trying to achieve, your requirements, and how we can benchmark against those goals. We want to make sure we can accurately assess whether our product is delivering value to you.* > > *We would suggest something like this \[scorecard] but before we lock that in, we'd love to get a better understanding of your needs.* > {% endhint %} ## Competitor inbounds Once the company takes off, it will likely draw attention from direct competitors in the market. We don't recommend taking competitor calls. **If the outreach is from Business Development or Corporate Development, it’s likely a fishing expedition to acquire the business early (at a premature, low valuation).** It would not be a good use of time if you’re not planning on selling the business now. You’re also at risk of giving away competitive information about your product roadmap. Engaging in this would put a bigger target on your back. You should only talk to Corporate Dev if you’re looking to sell the business now (either the company is doing really well or really badly). See Paul Graham’s full article [here](http://www.paulgraham.com/corpdev.html). **If the outreach is from Product Teams seeking guidance on integrating open source components into their product, it doesn’t require a meeting.** Kindly ask them to read the open source documentation and let you know if they have any questions. The competitor should engage with the open source project, making contributions to the project and doing their own engineering work. You don’t need to take a meeting for the competitor to integrate the open source project into their product. ## When to hire a first sales representative As a company grows, sales processes can move to representatives who will be able to execute effectively given insight and an established strategy after they take on an initial shape. This usually happens after a company has raised its Seed round. ### Sales team structure Sales teams are often divided between new sales (“hunters”) vs. account or relationship management (“farmers” for upsell) when you’re at scale (50+ salespeople). Depending on the size of the upsell opportunity and sales skills required, some organizations may reroute these back to the new sales team. Generally, Customer Success doesn’t touch sales. They would alert the sales team to new leads that emerge from existing customers. Important: 1. Sales data in the system must be accurate regardless of who’s managing it. 2. Be strict about revenue recognition policies. # Sales Funnel Sales progress through a sales funnel defined by stages, with each stage narrowing the potential customers to those who flow through the next and eventually become paying customers or lost opportunities. Stages in a sales funnel define how sales efforts engage with potential customers and will typically resemble the following.
Various factors can play into how wide each portion of the funnel may initially be and how it may narrow in conversion towards later stages. The stages towards the top of the funnel (prospecting and lead qualification) define initial outreach, which may be influenced by the number of potential customers in the market and the effectiveness of initial messaging to generate interest in those customers. The stages towards the bottom of the funnel (sales calls, proposal, close) may be influenced by a fit with customer needs, messaging, switching costs from market alternatives, pricing, and operational processes. ## Prospecting Identifying potential customers is essential requires consistent engagement and strategic refinement. Look for who might be facing the problems your company can help solve. ## Lead Qualification Initial outreach to potential customers (e.g. through email or LinkedIn) to see who may be interested in trying your product should seek understanding of their problems more so than pitching solutions. Send short, clear messages without buzzwords which reflect a desire to understand their problems and why they might be looking for solutions. ## Sales Calls Deepen your understanding of a potential customer’s problems and needs to refine your problem and solution hypothesis. Ask open ended questions in seeking understanding, build rapport, and express how you care about solving those same problems. Once you have an understanding of customer needs, you can showcase a tailored demonstration of how your product can meet those needs and how it may bring value to their specific situation rather than showcasing generic features. This stage of the sales funnel may represent multiple meetings - minimizing the time to close sales shouldn’t come at the expense of doing customer discovery and understanding customer needs (demos can come in a separate call with the context of that understanding and be refined to their needs). ## Proposal Set and send a quote of the expected contract to bill the customer. Review and negotiate with the customer where necessary and produce a signed contact. ## Closed **Closed Won**: A paying customer is one outcome of the sales funnel. Customer setup and onboarding may be applicable once won. **Closed Lost**: Not every potential customer will be a won opportunity. Lost deals can inform you on how to more effectively tackle prospects and can refine who your solutions are intended for. ## Customer Relationship Management (CRM) Software CRMs can help showcase the differing conversion rates of potential customers between each of the stages of the sales funnel. Use CRMs to track key information at every stage to keep track of factors driving conversion and help determine where sales can be better optimized. CRMs can track where deals are lost, information about the sales process, and help follow up in the future when the product/service and the customer’s needs may be more aligned. As companies grow, sales teams will have more complex needs for collaboration, management, and integration with other workflows. The software used for CRM by most enterprise businesses is Salesforce. The customization and rich feature set in Salesforce are other aspects of what makes it the preferred tool for most enterprises. Market-specific CRMs exist as well that may be more specifically tailored to align with business and market needs. Working with a scalable long-term software platform for CRM is recommended to focus on best practices and keep the team aligned. # Revenue Reporting Recurring revenue is the portion of revenue that is expected to be ongoing and renew for a defined temporal period of a year (Annual Recurring Revenue/ ARR) or month (Monthly Recurring Revenue/ MRR). The form of recurring revenue that is appropriate to reference should be determined based on the billing associated with that revenue. Monthly determination of customer churn isn’t possible when the software is billed yearly. The amount of recurring revenue changes from one period to the next such that: * Period 2 End ARR = * Period 1 End ARR (same as Period 2 Beginning ARR) + * ARR Added from New Customers in Period 2 + * ARR Grown from Period 1 Customers in Period 2 - * ARR Shrunk from Period 1 Customers in Period 2 - * ARR Lost from Period 1 Customers in Period 2 * Net ARR Period 2 = * Period 2 End ARR - * Period 1 End ARR (same as Period 2 Beginning ARR) * \= * ARR Added from New Customers in Period 2 + * ARR Grown from Period 1 Customers in Period 2 - * ARR Shrunk from Period 1 Customers in Period 2 - * ARR Lost from Period 1 Customers in Period 2 The Net ARR is the net change from one period to the next accounting for new ARR, lost ARR, grown ARR, and shrunk ARR. ## Reporting Revenue Reported ARRs must be substantiated by executed customer contracts with reliable implementation start dates 1. Management team can report “pipeline deals” separately based on ongoing customer conservations, but these are not reported ARR numbers 2. Reported ARRs will be reviewed during the monthly finance review meeting with the Finance Team. 1. Discrepancies with realized revenue (including implementation timing) must be documented. If revenue realization has been delayed by >6 weeks, contract will be removed from reported total ARR. 2. Formation Financial will invoice customers based on contract terms and monitor delayed billings Document retention policy 1. All customer contracts must be uploaded to the company’s Google drive (Accounting Folder) in real time 2. Management team is responsible to keep Customer CRM and Investor CRM up to date on a weekly basis # Channel Partners It’s easy to get distracted by the allure of channel partners and the belief that these relationships will unlock growth. That is rarely the case. Channel partnerships can be a force multiplier for existing momentum, but are not a substitute for founder-led sales. The best channel partnerships feel like extensions of your own team. The partner knows your product deeply, represents it accurately, and has direct incentives to succeed. They're not just forwarding leads—they're actively selling, supporting, and growing the relationship. ## Pre-$1M ARR companies If you haven't crossed $1 million in ARR, your default answer to channel partnership opportunities is typically no. You don't have the resources, processes, or leverage to make these relationships work effectively. The exception is when a partner approaches you, representing an existing, active user of your open source software who has urgent, specific feature requests they're willing to pay for. Not just someone aware of your project—someone actively using it with real pain points. Before you say yes, ask: 1. Is there an end customer already deployed on our open source software? 2. Are they actively using it? 3. Do they have real pain points? 4. Do they have three burning feature requests? If the answers are yes, explore the opportunity. Otherwise, pass and focus on direct sales. ## Post-$1M ARR companies Once you've proven product-market fit and crossed $1 million in ARR, channel partnerships become more viable. But you still need to be selective about which opportunities to pursue and how to structure them. ## Resellers Resellers buy software products from manufacturers, usually in bulk, and then sell them to their network of clients. Working with a reseller can help you leverage the reseller's established relationships, market knowledge, and sales infrastructure, helping you to enter new markets more efficiently and effectively. **For reseller relationships to be effective, concentrate your efforts with 3 or fewer resellers and don’t extend too far.** Otherwise, each reseller will be limited in how much they can sell for you and may not invest as many resources in training and support, which diminishes the value they bring. Reseller relationships should be mutually beneficial for the company and the reseller. You invest in them, they invest in you. Resellers can add value by offering additional services such as customer support, training, and customization, which can be particularly important for complex B2B SaaS products. They also typically handle billing and collections, reducing the administrative load for the software company. However, working with resellers also has its challenges. It's important to carefully select and manage resellers to ensure they represent the product correctly and maintain the quality of service that end-users expect. Effective communication, ongoing support, and performance monitoring are key to a successful reseller relationship. ## White Labeling White labeling is a practice where software produced by one company is rebranded and sold by another company as its own. This allows companies to offer software solutions without developing them in-house. The original manufacturer provides the software, often with customization options, which the reseller or another company then brands with their own logo, name, and identity. White labeling rarely yields substantial benefits. Sometimes, allowing white labeling with a targeted reseller can be a good sales channel if it's a quick and clean arrangement. Allow minimal branding flexibility and avoid investing significant resources. For example, you can offer customizable logos as a paid feature. Don’t give an MSP your whole code base and allow them to compete in the marketplace, or enter into a lengthy negotiation cycle. ## Revenue share structure Focus on creating a single-channel model first, and then replicate it. Good partners offer complementary solutions and have a vested interest in your company’s success (e.g., increased customer usage of your product enhances the retention rate of their solution). The [commission structure/revenue share](https://www.saastr.com/what-are-typical-commission-ranges-for-referral-partners-for-enterprise-b2b-saas/) for channel partners is typically based on their level of effort in facilitating a deal. For illustrative purposes: * Limited Touch (i.e., platform listing/warm leads & intros only): 10% * Active Deal Sourcing or Qualified Opportunity: 20% * Assistance on Closing the Deal (i.e., address customer concerns / overcome objections): 30% Follow similar logic for referral partners. Make sure there’s still a sufficient margin to cover your direct costs after channel compensation. ## Create a shared sales and marketing plan Build a concrete plan together with agreed-upon deliverables and timelines. This isn't optional—it's how you separate real partnerships from time-wasting relationships. Your plan should address: 1. **Sales targets and expectations:** Be explicit upfront. How much will they sell, and when? If you're targeting 10 customers in Q1 and 25 in Q2, put that in writing. If they miss targets by a wide margin, you need to know quickly so you can reallocate resources. Vague hopes about "exploring opportunities" don't work. 2. **Lead sharing protocols:** Will you share all leads in their territory with them? What happens when you get an inbound lead from a customer in their market—do they handle it, or do you? Decide this before conflicts arise, not after. 3. **Co-marketing investment:** How much will each side invest in marketing this partnership? Who owns content creation? Who manages campaigns? Co-marketing sounds good in theory, but fails in practice when expectations aren't clear. Put dollar amounts and specific deliverables in the agreement. 4. **Field training specifics:** How many of their people will be trained on your product? What's the format—live sessions, recorded materials, certification programs? Who pays for travel if in-person training is required? Great partners will invest in training their team. Poor partners will expect you to do all the work. 5. **Sales incentives:** Consider offering double commission for the first quarter to get them motivated and prove the partnership works. Front-load rewards to create momentum. If they close three deals in their first month, that success builds motivation for month two. If they close nothing for three months, you both lose interest. 6. **Support protocols:** Who handles the first phone call when a customer has a problem? If the partner fields initial support requests, what's the escalation path? What issues do they handle versus what gets passed to you? Define service level agreements and response times. Unclear support protocols kill customer satisfaction and damage both brands. 7. **Product roadmap alignment:** What features are coming that will help them sell? What customer feedback should they funnel back to you? Regular sync meetings—monthly at minimum—keep everyone aligned on priorities and progress. Before you finalize any partnership, ask yourself: Can I articulate exactly what success looks like in six months? Do we both know our responsibilities? Have we agreed on specific, measurable outcomes? If the answer to any of these is no, keep negotiating or walk away. # Federal Sales Government agencies almost always buy software through channel partners. A “channel partner” is an umbrella term for organizations authorized to work with the federal government. It includes managed service providers (MSPs), systems integrators (SIs), resellers, etc. Open core companies tend to have channel partners/MSPs reaching out more than is usual for an early-stage startup because of high open source software usage in the government. Sometimes it makes sense to focus here, but often it does not. If you don't have any customers, you should focus on opportunities that are most likely to be your first customers. Federal agencies often don’t make good first customers because of the complex federal procurement process that requires security clearances, certifications, and working with channel partners. Deals can take years to close. This is very risky for startups that need to maintain cash flow. Don’t underestimate how challenging it is. If you have government agencies using the open source project, and they're proactively reaching out for specific enterprise features (like auditing, support, SSO, etc.), it may make sense to explore these opportunities. In most cases, inbound outreach comes from a channel partner, not the agency itself. We do not recommend that Pre-Seed companies pursue outbound federal sales, unqualified (i.e., no existing usage) opportunities, or engage in white-labeling deals. ## When you're the only option Some open core companies are uniquely positioned to sell to government agencies because their open source version is the only self-hosted provider available, making it the only option for government users. Being the only self-hosted provider isn’t a signal to pursue outbound federal sales if there’s no inbound interest. To get the certifications and clearances needed to engage with federal customers, you still need a sponsor (could be a customer or partner). If an agency is willing to sponsor you because they need your software that badly, they will likely have a channel partner contact you. Federal customers are great in the long term due to large contract sizes with expansion opportunities and great retention, but being prepared to sell to them and navigating the process is hard. ## Engaging with channel partners Channel partners or MSPs may reach out because they are working with a specific customer with a current need, or because they see some potential future opportunity. A good guideline is if a channel partner contacts you about specific customers, it’s probably an opportunity worth exploring. If they contact you promising broad distribution or a speculative prospect, it’s best to pass for now\.If a channel partner or MSP contacts you, assess each potential deal on a case-by-case basis. Quickly qualify or disqualify the opportunity by finding out if there are existing active open source users and their feature requests. Act according to usage and interest: ### Engage If you have not sold to the government in the past but are being pulled in that direction because there is existing active open source usage and inbound interest, this is a signal to [start selling](https://docs.google.com/document/d/1KyTQBgv9pmO9jmBAh0ft4XoFbjtAh0bgMRAtcukp7uQ/edit?tab=t.0) to them. Closing a highly engaged, highly motivated government customer can still take over a year —always maintain a strong non-federal sales pipeline. Don’t pursue a government customer at the expense of more immediate revenue opportunities. ### Don’t engage When there is no existing usage, a channel partner may try to sell you on the promise of gaining access to government customers with large deal sizes. This can be tempting, but it’s often more of a distraction than a worthwhile sales opportunity. We strongly recommend against engaging in white-labeling deals. ## How federal sales work Selling to the federal government is distinctly different from typical B2B sales. For example, government customers can’t talk openly with you about their needs and challenges unless you have the proper security clearances and certifications. Dress codes are more formal, and deals take longer to close. If you’re pursuing government contracts, plan to work with channel partners, and have additional revenue channels with faster sales cycles. GovTech companies specifically targeting government sales should be prepared to commit to selling to the federal government and find a trusted channel partner to work with at the company formation stage. We recommend working with [Carasoft](https://www.carahsoft.com/). We can help facilitate introductions. Carasoft doesn’t work with everyone. You’ll need a compelling case explaining why they should take you as a client. Pay close attention to U.S. sanctions. Don’t sell to businesses or governments, or hire employees in restricted countries. Non-U.S. citizens and entities may face additional hurdles or be unable to engage in federal sales. ## Pricing Offer consistent pricing structures and limit custom discounts as much as possible. Use standard agreements and templates for professional services and pricing to streamline discussions. If it makes sense to offer a discount, base it on measurable reductions in costs. For example, if support services account for 15% of the cost and the partner provides their support, offer a 10% discount. ## [Channel partners](/startup-manual/gtm/sales/channel-partners) Most federal sales will require working with a channel partner unless you or your co-founder already have the necessary security clearances, certifications, and contacts. Channel partners can help navigate federal procurement, but reliability and impact vary. Gaining certifications and clearances yourself is time-consuming, costly, and requires sponsorship from a potential customer. In most cases, it doesn’t make sense to pursue certifications and clearances at this stage. Work with the channel partner who initially contacted you or, in the case of building GovTech, find a reliable channel partner to work with. Evaluate partner credibility and prioritize partners who are working with existing open source users. For example, In-Q-Tel is a common partner that may reach out to a company they see increasing open source usage within their federal clients. Engaging with channel partners is not free— it takes time, and they may take a percentage of the final deal. Set clear terms and negotiate roles and exclusivity agreements up front. Ask the channel partner to invest time and effort into the deal. You should be able to participate in partner-led discussions with end customers in most cases. The channel partner should pay for your time if that’s not an option. Use professional services pricing (e.g., $450/hour) to filter serious partners and ensure fair compensation. ## Certifications Security certifications are formal validations required to demonstrate that your product, service, or organization meets government compliance standards. The most common certification is the Federal Risk and Authorization Management Program (FedRAMP). The purpose of the certification is to ensure cloud services meet U.S. federal security and privacy requirements. There are three levels of certification (Low, Moderate, High) depending on the sensitivity of the data handled. FedRAMP certification requires sponsorship from a federal agency. It’s a long and resource-intensive process (can take 6-18 months and requires ongoing compliance and audits. ## Clearances Security clearances are individual authorizations required to access classified government information. They’re necessary for personnel directly engaging with certain federal agencies. You must have a sponsor to obtain clearances. Security clearances are time-consuming and expensive, with processes lasting months and costing up to $15,000 per individual. # Fundraising Process Fundraising is a full-time job that should be executed with intentionality and intensity. Fundraising can take months, with the possibility of 100+ meetings. OCV helps founders prepare fundraising materials and facilitates investor introductions. [Company growth](https://handbook.opencoreventures.com/startup-manual/gtm/growth) is the single most important determinant for how successful you will be at fundraising. Typically, companies fundraise when the founding team is in place and there’s exciting growth. At this time, fundraising becomes the CEO's full-time job. For most companies, the fundraising process will start around 9-12 months after incorporation, depending on the company’s burn rate. Companies with high monthly burn rates may need to start the fundraising process within their first year. Soon after company formation, OCV will work with you to craft your [Building Blocks](/founder-experience/building-blocks). Your building blocks will eventually become the foundation of your fundraising materials. Your fundraising story is essentially a version of the same story you tell yourself, potential hires, and customers—each version is built on the same building blocks. ## **Fundraising process** We recommend aiming for a 7-week fundraising process and sticking to the recommended timeline. Momentum is key— don't let the process stall out. Plan to iterate often and quickly on your pitch deck in the first couple of weeks. 1. Create a [pitch deck](/startup-manual/fundraising/pitch-deck) and build an investor CRM 2. [Pitch practice](/startup-manual/fundraising/pitch-deck#pitch-practice) with the OCV team 3. [Ask for intros to investors](#request-for-investor-introduction) 4. [Schedule investor meetings](#scheduling-investor-meetings) 5. Pitch investors {% hint style="info" %} ## **Example timeline** Week 1: Review pitch with OCV and iterate Week 2: Review pitch with Friendly investors and iterate Week 3: First calls: may not be with a General Partner at a venture firm Week 4: Second calls: with a General Partner, cut a few firms if too many Week 5: Third calls: with the General Partner again, cut a few firms if too many Week 6: Full partner meetings (these are usually scheduled for Monday mornings) Week 7: Full partner meetings and term sheets due Tuesday, noon Pacific {% endhint %} ## Scheduling investor meetings Start contacting potential investors about 3 weeks before you plan to have meetings. Schedule all of your meetings within a 2-week block. Meet with “friendly” investors in the first week and all other investors the following week. Typically, only CEOs attend investor meetings at the Seed stage. CTOs continue to work on the business. Always use DocSend when sending decks so you have full visibility into who is accessing the deck. Ask referral contacts to disclose which investors they are sending the deck to. Don’t attach decks to emails. We do not recommend sending decks without a meeting scheduled. It’s ok to send a deck 24 hours ahead of a scheduled meeting. There may be exceptional circumstances where you should send a deck without a meeting scheduled. Discuss specific situations during office hours. OCV will introduce founders to investors in our network. When requesting an introduction, include a self-contained email that the recipient can forward directly. Send a separate email for each request. For example, if you ask for 5 introductions, send 5 draft messages. ### Request for investor introduction {% hint style="info" %} ### Email Template \[OCV Partner Name], Thanks again for offering to introduce me to \[Name of Investor]. Hi \[Investor Name], I’m kicking off \[Company’s] Seed round and starting early conversations with a small group of investors. \[Company] is \[two-sentence description]. We recently…include any relevant recent traction (customers, ARR). Include one sentence about yourself. I’d love to share more about our traction, where we’re heading, and why now is the moment. Would you be open to a quick intro call next week? Best, \[Your Name] {% endhint %} ## Due diligence call requests OCV's GPs are available for a due diligence call if required by the lead Seed investor. As this is expected to be the final step before extending a term sheet, the number of GP call requests should not exceed 2-3 firms for each OCV company. We look to OCV CEOs to manage this expectation with potential investors who request GP calls. To schedule a GP due diligence call, CEOs can make an introduction via email (copy the GP's PA for calendaring if applicable) and OCV’s COO for visibility. ## Term sheet negotiation If investors are interested after due diligence, they present a term sheet outlining the investment terms, such as the amount of investment, equity stake, valuation, and any additional conditions. Upon agreeing to the terms outlined in the term sheet, legal documents, like the investment agreement and shareholders' agreement, are prepared and reviewed by both parties. The company’s Legal Team will review and redline deal documents. ## CapTable concerns OCV companies face three primary cap table concerns: 1. [Founder's ownership stake](#founders-ownership-stake) 2. [Seed round options pool](#seed-round-options-pool) 3. [Investor concentration](#investor-concentration) Companies may lose potential investor interest because of CapTable concerns. We recognize this as a headwind. Founders should focus on growing fast to overcome cap table objections from future investors. ### Founder's ownership stake Under OCV’s operating model, founders would receive lower equity ownership percentages compared to traditional ways of founding a startup with two co-founders. Lower founder ownership is a valid concern for future investors. It tends to be a more pronounced concern in early rounds and less so in late stages. ### Seed round options pool One investor concern is the need for a larger options pool in the future to grant refreshes to the founders. Typically, founders do not participate in refresh grants. This is counterintuitive but common in the market. For our model (high risk for OCV) to work, OCV needs high ownership. We won’t do a recapitalization. At the Seed round, the option pool typically will be 15%, slightly higher than the industry norm of 10%. This provides flexibility in equity grants. The company’s board will determine the allocation of the options pool, including any refresh grants to founders. OCV’s initial SAFE investment contains a side letter that requires OCV’s prior written consent for any promises of equity awards to officers and employees in the Seed term sheet. ### Investor concentration New investors may see concentrated ownership by one investor as not having a diverse set of advice, opinions, and industry contacts. The ideal scenario is for new investors to lead and participate in the Seed round to reduce OCV’s ownership percentage. In general, OCV is open to investing in or co-leading the Seed round only to support our companies. CEOs should feel free to leverage this if we commit, but still try to find new investors to reduce investor concentration. ## Dilution Dilution is the reduction in ownership percentage that occurs when a company issues new shares, typically to raise additional capital. The initial funding from OCV is in the form of a [SAFE](https://handbook.opencoreventures.com/ocv-employees/vc-ops/company-formation-process/incorporation-steps-1-8#step-7-fund-the-business), which converts into preferred shares as part of the Seed round. This results in additional dilution along with the sale of new Seed shares. The magnitude of founder dilution depends on how much new money is raised, the valuation for the round, the size of the options pool, and any new grants issued from the options pool. {% hint style="info" %} **Example scenario** If founder ownership % pre-Seed is 15%, and we assume the Seed round terms are: * $4M new money + $2M SAFE conversion * $20M pre-money valuation * 15% options pool (3% new options granted to the founder) Founder ownership % post-Seed is \~12.3% {% endhint %} ## Closing the deal Once all legal and financial details are settled, the investment is finalized, and funds are transferred to the startup's bank account. The new financing round will become public information after filing [Form D](https://www.notion.so/Fundraising-1c8feb7b074d80acb6f1d4abf7100d14?pvs=21). Companies should coordinate Form D timing with any planned public announcements/press releases. ## Form D filing After closing the round, file [Form D](https://www.sec.gov/files/formd.pdf) with the SEC to be received by 30 calendar days after the securities in the offering are closed. [Form D is an acknowledgement of exemption from Regulation D, which is typical for venture-backed companies](https://www.sec.gov/oiea/investor-alerts-and-bulletins/private-placements-under-regulation-d-investor-bulletin). The legal team will request: 1. Form ID Application (for SEC EDGAR Codes) review 2. CEO to sign (wet-ink) Power of Attorney ## Wind down decision In some cases, winding down a company is the best option. The primary reason OCV may recommend winding down is that the company is unlikely to fundraise successfully within the expected timeframe. In rare, exceptional, and justifiable cases, OCV may provide additional capital to extend the runway in a new SAFE instead of winding down. OCV will initiate wind-down conversations with founders and begin the company [wind-down process](/ocv-employees/vc-ops/wind-down) in the following situations: 1. A company is struggling to show commercial traction by the 6-month mark 2. A company is unable to raise a Seed round, and its runway is <6 months We don’t wait until a company has completely run out of money to wind down because the wind-down process has associated costs. In certain situations, founders may wish to continue their fundraising efforts after OCV recommends winding down the business. In these cases, to better align incentives and improve the probability of success for this strategy, OCV will work with founders to reduce their cash compensation to extend the runway. # Investor Management Use [OCV’s Investor CRM template](https://docs.google.com/spreadsheets/d/10wpocWiICjbULgSiCcU20FxdpOWm4KOpbS2N_D_tP8c/edit?gid=1440104694#gid=1440104694) to plan and track investor outreach and interest. Start building your investor CRM when you start working on your pitch deck, if you haven’t started already. Start with [OCV’s Trusted VC Network list](#ocvs-trusted-vc-network) and use the [Find Funding database](https://www.findfunding.vc/) to search for additional early-stage investors. ## Early interest from investors No matter how “informal” an intro meeting may appear, remember that all investor meetings are inherently pitches. Don’t meet with investors before you’re ready. Even if you’re not presenting a pitch deck, they are evaluating you. At this stage, you should typically hold off on meeting investors until you’re ready to actively fundraise and keep your focus on building your product and growing. If you receive an inbound request, capture the interest in your investor CRM and let the potential investor know that you’re still early but would love to chat with them when you start thinking about fundraising. {% hint style="info" %} ## Email Template: Early Investor Interest Response Hi \[Name], Thanks for reaching out. We’re not meeting with investors yet, but we’d love to meet you when we start thinking about fundraising. Can we reconnect in a few months? Regards, \[Email Signature] {% endhint %} ## Monthly investor updates An investor update is a brief and honest snapshot of the company’s current status. It’s sent via email to current investors and team members. Keeping investors in the loop builds trust and keeps you accountable. It makes the investor feel like they are part of your team and makes them more likely to help you. Sending monthly updates is another way to hold yourself accountable to measuring, tracking, and reporting on your monthly progress. The content should focus on showing month-over-month progress and typically includes the company’s monthly metrics, highlights/lowlights, and goals. Send your investor update on the 1st of every month. New companies should send their first newsletter the month after they started, even if it’s only been a couple of weeks. 1. **Pre-Seed companies** will send this to the OCV email address provided and employees. 2. **Post-Seed companies** should send their updates to all current investors (including OCV) and employees. **Don’t send potential investors the same update you send to current investors.** If investors are showing early interest in your company but it isn’t time to begin the fundraising process, you can keep potential investors “warm” by sending a separate investor newsletter. This update can be sent less frequently (quarterly) and should focus on sharing good news and major milestones. You can choose to share metric,s but be selective. Don’t share all of your metrics or metrics that don’t show growth. ### What to include [Use this template](https://docs.google.com/document/d/1dhiDfJzed_EA7kRnaVVgF19FKrC4CfVNTwHHV8T6kRM/edit). If you need more inspiration, [here’s an example from GitLab](https://about.gitlab.com/blog/2018/10/17/how-we-keep-investors-in-the-loop/). 1. **Metrics:** Lead with your 1-3 most important metrics. The update should include both the monthly metric and the % change from the previous month. We also recommend including your ARR growth, burn rate, and runway. 2. **Highlights/lowlights:** Share a few bullet points on what’s going well and what’s not going well. This gives investors more context. 3. **Goals:** Share 1-3 ambitions explaining what you aspire to achieve in the upcoming month. These goals may be different from your bi-weekly office hours goals. They can include things like shipping new features/functionality, hosting an event with a high attendance rate, upcoming announcements, collaborations, etc. 4. **Ask:** Ask investors for something you need help with. Keep the asks in the update simple. For example: candidate recommendations, prospective customer intros, investor intros. More complicated requests should be sent 1:1. ## OCV’s Trusted VC Network OCV maintains a Trusted VC Network list. Founders can request access in their company channel. OCV classifies VC partners into four groups: 1. **Test VC Group:** OCV’s strongest supporters. OCV companies should feel free to test their pitches with this group. This is a subset of the Friendly VC Group. 2. **Friendly VC Group:** Those who have invested in OCV companies in the past and/or demonstrated an understanding and appreciation for OCV’s model. They are on our investor newsletter mailing list, along with the Test VC Group. Friendly VCs will be introduced to OCV companies one quarter before others. 3. **Pipeline VC Group:** VCs who are new to us and are looking at one company for investment for now. They may graduate to the “Friendly” group. 4. **Deny VC Group**: those we have had challenges working with in the past or who have a mixed reputation. For example, bypassing the OCV introduction process, suggesting founders renegotiate equity, not honoring term sheets, last-minute demands. Founders are welcome to nominate investors in their own networks and/or those who have expressed an interest in investing in the company. OCV will add these firms to the Pipeline VC group. # Pitch Deck Use the [OCV Pitch Deck Template](#ocv-pitch-deck-template) to create your pitch deck. Start early enough and give yourself a few weeks to polish it. {% hint style="success" %} ### **Tips for drafting your deck** 1. **Your first draft includes slide titles only.** The slide title is the conclusion or key takeaway of the slide. Use the active tense and avoid commas. 2. **The slide content should speak for itself.** Don’t rely on voice-overs. 3. **Keep the open core slide simple.** Avoid getting overly technical on the difference between the open source and proprietary products. The investor just needs to be able to defend open core model to partners. 4. **Don’t include a demo in the mainline deck**. You will not want to or need to demo in every situation. Be prepared to demo if needed. 5. **The conclusion is one line.** Make it concise and memorable. 6. **Aim to get through each slide in 1-2 minutes.** Slides that take longer to explain are trying to do too much and should be split into two slides. 7. **Your deck should take <10 minutes to present.** Reserve 20 minutes for investors to ask questions. {% endhint %} ## OCV Pitch Deck Template OCV Companies are expected to use the OCV Pitch Deck Template to create their pitch deck. The template is based on Sequoia's tried-and-true pitch template. The deck template represents how investors think—don’t attempt to retrain investors on how to think about a pitch. Don’t change the flow or try to reinvent the wheel. You may need to add a slide or two for additional company or industry context, but overall, follow the template. {% hint style="info" %} ### OCV Pitch Deck Template Each numbered item represents a single slide. 1. **Company Purpose:** *Define the* *company in a single declarative sentence. This is your title slide. Slide title example:* *“Uber: Next-generation car service”* 2. **Problem:** *Pain of the customer or customer’s customer, how the customer addresses the issue today. Slide title example: “Traditional cabs rely on outdated and inefficient technology.”* 3. **Solution:** *Value proposition to make the customer’s life better, where the product physically sits, and use cases. Slide title example: “A fast and efficient on-demand cab service that uses the latest consumer web and device technology.”* 4. **Why now:** *Historical evolution of the category, recent trends making the solution possible.* \ *Slide title example:* *“Everyone is carrying a geo-aware mobile device.”* 5. **Market size:** *The customer profile you cater to, calculate TAM, SAM, and SOM. Slide title example: “Professionals in American cities seeking the convenience of a cab and the experience of a chauffeur.”* 6. **Competition:** *List of competitors, list of competitive advantages. 2x2 matrix with your company up and to the right. Slide title example: “Uber is the only high-tech-enabled cab company.”* 7. **Product:** *Product line-up (form factor, functionality, features, architecture, intellectual property), development roadmap. Slide title example: “Book trips, pre-specify locations, and pay from your mobile device.”* 8. **Open Core:** *Two columns showing the* *difference between the open source project and the commercial product. What’s open source, what’s proprietary? Slide title example: “All-in-one rideshare service built on open core GPS.”* 9. **Business Model:** *Revenue model, pricing, average account size/lifetime value, sales and distribution model, customer pipeline/list. Slide title example: “3 Tier pricing model based on location, availability, and car.”* 10. **Team:** *Founders and management, board of directors/board of advisors. Slide title example: “Founded by the expert in collaborative software systems.”* 11. **The deal:** *$XMM to raise XYZ Series A milestones. The left side shows spending, and the right side shows milestones. Slide title example: “Raise $3M to develop app and buy 3 cars.”* {% endhint %} ### **Content & messaging standards** Follow these standards to avoid common content and messaging mistakes. * **Company Purpose**: Keep the positioning statement concise. Focus on differentiation vs. top competitors. * **Problem/Solution**: Don't duplicate problem description across slides. The problem slide should be separate from the solution. * **Pricing**: Avoid claiming "cost parity" and instead emphasize being the "most cost-effective" in market. Don't give price ranges; provide specific numbers. * **Competition**: Use a 2x2 matrix format with 4-6 companies, positioning your company top-right. ### **Design & formatting standards** * **Font size requirements**: Use a minimum 30pt font for body text. It should be easily readable and only slightly smaller than the title text. * **Single title rule**: Each slide should have only one title (the summary/conclusion). Remove secondary headers like "Company Purpose" labels. * **Content density**: Reduce the amount of information per slide. If there's too much content, split it into multiple slides. * **Visual hierarchy**: Make slide titles larger and more prominent. * **Chart standards**: Start graphs from zero to avoid misleading representations. ### **Financial projections & business model** * **Timeline clarity**: Use calendar years (Y1, Y2, Y3, etc.) with readable font sizes. * **Long-term vision**: Show 10-year projections to demonstrate exit potential. * **Revenue breakdown**: Include total revenue line and net profit projections. * **Service revenue**: If including services, ensure meaningful revenue contribution. * **Funding ask**: State amount confidently ("Raising $X million Series A") rather than as a request. ### **Team & Cap Table presentation** * **Experience focus**: Only include team accomplishments with quantifiable results/numbers. * **Equity clarity**: Clearly show investment amounts in cap table, not just percentages. * **Remove unnecessary labels**: Don't include "Experience" or "Founder" labels. These are implied. ## Include your AI strategy Every pitch should include the company’s AI story. Companies with a clear AI strategy that can show fast growth will fundraise faster. Many VC firms will not allow investment in companies that cannot articulate a clear AI strategy. Watch the AI segment below from OCV’s AI and Open Core Roundtable to hear Sid and Rich discuss the importance of including your AI strategy in your pitch deck. {% embed url="" %} ## Pitch Practice OCV will schedule weekly pitch practice to review deck progress and provide feedback. Plan to iterate indefinitely—you’ll incorporate feedback and learnings every time you deliver your pitch, whether to the OCV team or investors. Pitch practice starts the week after you’ve kicked off the fundraising process. You will practice your pitch in whatever stage it’s in, whether it’s just slide titles or a fully formed deck. We will give you detailed feedback after each session. Once you’ve practiced a few times with the OCV team, you’ll schedule a pitch feedback session with Sid Sijbrandij. # Raising SAFEs ### SAFE Terms and Information As a fundraising strategy, founders may want to collect small amounts in SAFEs from strategic angels and other investors to generate momentum for the round. The goal of these SAFEs is to demonstrate traction and leverage early investor interests into introductions to potential lead investor(s) for a priced round. OCV’s initial SAFE investment does not contain any discount, valuation cap, or MFN clause. To reduce friction and accelerate speed for the Seed round, OCV companies can collect up to $400K in SAFEs under the following terms: 1. Maximum discount of 15%, or 2. $20M pre-money valuation cap, whichever calculation results in a greater number of shares of SAFE Preferred Stock. 3. No MFN clause. The spirit of these standardized terms is to ensure that SAFE investors in the same round receive the same terms. It is easier to amend previously issued SAFEs to be on the same (more favorable) terms as later SAFEs than to correct for any unintended misapplication of MFN. At these thresholds, OCV does not need to approve each SAFE, and there is no impact to OCV’s SAFE terms (i.e., OCV SAFE will convert at the priced round, without a valuation cap or discount). This is documented in the Company’s certificate of incorporation or OCV’s [SAFE Side Letter](https://handbook.opencoreventures.com/ocv-employees/vc-ops/company-formation-process/incorporation-steps-1-8#safe-side-letter). For a typical batch of \~5-10 angel checks, we recommend direct SAFEs rather than consolidating through a Roll-Up Vehicle (RUV). SAFEs are faster to close, keep angels directly on the cap table, preserve investor relationships, and align with what institutional investors expect at later rounds. We ask founders to keep OCV updated on their fundraising status, including the issuance of any new SAFEs. A board resolution (prepared by the Legal Team) is required before the SAFEs can be executed and funded. Ultimately, a priced Seed round is preferred because it provides simplicity and visibility around CapTable structure under OCV’s model: 1. A priced round allows for an [options pool refresh](/startup-manual/fundraising/fundraising-process#seed-round-options-pool) with a known total share count (modeling with SAFEs requires making up assumptions about the next priced round) 2. Opportunity to issue any new founder grants, if approved by the board. Vesting would start earlier than the next priced round. If a company exceeds $400K in SAFEs, OCV will amend the initial OCV SAFE to reflect the same terms offered to other investors, as outlined above. To issue pre-Seed SAFEs, founders can populate this [OCV SAFE Template](https://docs.google.com/document/d/1jWA7gZyQ110-SjEv6HYjCjB47N0M7hqT/edit?usp=sharing\&ouid=114605482382680978191\&rtpof=true\&sd=true) and send it to the investor via the company’s CapTable management system: * Under “Fundraising” > “SAFE financings” > “Add “SAFE” > select: “I have a filled SAFE document to be signed” > upload drafted SAFE and follow remaining steps. ### Process for Issuing SAFEs Follow the below process to issue and close a SAFE. For efficiency and to keep legal costs down, batch investor information where possible rather than submitting one at a time. 1. **Investor Outreach and Information Collection:** Collect each angel's name, entity name/signatory details (if investing through an entity), email, address, and intended investment amount to prepare each individual SAFE. Founders can either send this information to the Legal Team directly or include Legal on threads with the angels. 1. **Investor Suitability Questionnaire:** Each angel must execute an Investor Suitability Questionnaire. Because the questionnaire captures most of the above information (except for investment amount), the founder can either send the angel the blank questionnaire and have them provide information by executing it, or populate it separately and send to the angel for easy execution. 2. **Board Consent:** Prior to any SAFE being executed, the Legal Team will prepare a Board Consent authorizing the SAFE financing. This can be handled once there is an estimate of aggregate round size. 3. **SAFE Preparation and Execution:** The Legal Team prepares an individual SAFE for each angel, pre-populated with their information and the agreed terms, and circulates for signature by the investor and the company via DocuSign. 4. **Closing and Wiring:** Once a SAFE is fully executed, the investor wires funds directly to the company's account. Each SAFE is dated and considered closed as of the date funds are received. 5. **Post-Closing:** The Legal Team updates the cap table on Carta to reflect the new SAFEs and prepares any applicable state securities law filings. # Company Operations Founder process guides for operating an OCV company. OCV stands up workplace applications, payroll, banking, and equity administration as part of the company incorporation process. After incorporation, many day-to-day administrative tasks are transitioned to the founders. ## Quick Links

People Ops

Process guides for hiring, benefits, and company policies./pages/gLIIlpfOA1ywJ01MgjXt

FinanceOps

Process guides for banking, taxes, and equity./pages/1Po3zoLwlKFWI671QLKb

LegalOps

Process guides for security and compliance./pages/1NUXuzA9UT6i62BJ3gd7

Pulse

Internal dashboard for company tracking/pages/xuSF2taOqfBKHGAH1j5A
## Create a company handbook A company handbook is a systematic way of documenting how a company works. It is the most efficient way to transfer information and facilitates intentional communication. Given that OCV companies are founded on open-source technology projects and the principle of transparency, they tend to operate through a public handbook. Operating through a public handbook encourages accountability and supports hiring efforts. ## OCV support scope OCV provides ongoing support as well as access to external finance and HR support partners. As the sole board seat holder, OCV continues to manage some key legal, financial, and administrative responsibilities until the founders raise external financing.
Business OperationOCV Pre-CEO Support Scope
Banking
  • Manages bank account connections and vendor payments with external partner
  • Provides company finance and expense policies
Bookkeeping
  • Manages monthly finance review process with external partner
Hiring
  • Approves equity grants
  • CEO recruiting
  • Negotiates fees with external partners/recruiters
  • Provides compensation data, benefits structure, and offer letter templates
Legal
  • Coordinate legal needs with external counsel
Payroll & Benefits
  • Manages administration with external partner
Taxes
  • Manages federal, state, and local filings with external vendors.
  • Manages annual tax reporting
Board management
  • Coordinates board approval process
# Pulse Pulse is OCV's internal platform and the single source of truth for your company's operational information. You will receive an invitation to create an account before your first day. Pulse is organized into four sections: ### **Company Dashboard** Your company dashboard is the system of record for all company operations. It's auto-populated with three important templates: [Office Hours agenda](https://handbook.opencoreventures.com/founder-experience/office-hours#agenda), Investor CRM, and [monthly investor update](https://handbook.opencoreventures.com/monthly-investor-updates/). These templates are saved automatically to your company’s drive. These templates are yours to use; you do not need to make a copy. The dashboard also contains your company information, finance information, team member information, and a KPI section where you'll submit your KPIs. ### Find Investors A directory of OCV's VC investor contacts. Browse and select investors relevant to your raise, then add them directly to your Investor Contacts CRM. OCV leadership actively supports your fundraising process and will help make introductions to relevant investors on this list. ### Investor Contacts Your fundraising CRM. Log interactions with investors during an active fundraising process - contact details, meeting notes, and status - so you can track your pipeline in one place. ### Make a Hire Generate offer letters for new hires. Enter candidate information to produce a formatted offer document which will be routed for approval. # KPIs How-to guide to submitting KPIs in Pulse. ### Importance of Tracking KPIs in Pulse Pulse is the single source of truth for company information and performance. Centralizing KPI data in Pulse provides consistent, high-quality inputs, and unlocks downstream tools like automations and benchmarking across OCV companies. As a reminder, Pulse is only collecting KPI data. The OH agenda doc is the home for everything else - commentary on goal performance, growth plan, and open discussion topics - and founders maintain those sections directly in the doc each week. This guide walks through the submission process. Reach out to OCV Ops with any questions or feedback. ### The Process 1. **Watch for your Slack notifications.** Each week, you'll get a Slack notification ahead of office hours linking directly to the weekly view in Pulse. Once a month, you'll also get a notification for monthly KPIs that links to the monthly view. 1. Note: if your company is pre-traction (not yet generating users or revenue), you won't receive weekly notifications until there are metrics to track, so the KPI section can be ignored for the time being. 2. **Submit your weekly KPIs.** On the weekly view, your tracked KPIs will be listed for you to fill in. If there are changes to the KPIs are tracking, you can update them anytime by clicking "Edit Tracked KPIs" and selecting the relevant metrics. 1. Last week's target: prepopulated from your prior submission 2. Last week's performance: what you actually hit 3. Next week's goal: what you're committing to this week 3. **Submit your monthly KPIs** (first week of the month). The monthly view follows the same flow as weekly - last month's target prepopulated, this month's performance, and next month's goal. 4. **Maintaining your OH agenda doc.** Pulse submissions will push automatically to the Reporting Dashboard at the top of the OH agenda doc. Everything else in the agenda body (commentary on goal performance, growth plan, open discussion, etc.) still gets added directly in the doc each week by founders. Pulse is just collecting the data; the doc remains the meeting agenda. # Roles Pulse uses role-based access control. There are two categories of roles: OCV roles, which apply across all companies, and Company roles, which apply only to the company they're assigned to.
PermissionsOCV AdminOCV ManagerOCV ViewerCompany AdminCompany ManagerCompany Viewer
Company viewtruetruetruetruetruefalse
Company edittruetruefalsetruetruefalse
Company deletetruefalsefalsefalsefalsefalse
Company commentstruetruefalsefalsefalsefalse
Company ratingtruetruefalsefalsefalsefalse
Company financestruetruetruetruetruefalse
Company KPItruetruetruetruetruefalse
Team Members viewtruetruetruetruetruefalse
Team Members
edit		truetruefalsefalsefalsefalse
Team Members
delete		truefalsefalsefalsefalsefalse
Team Members salarytruetruefalsefalsefalsefalse
People viewtruetruetruefalsefalsefalse
People edittruetruefalsefalsefalsefalse
People deletetruefalsefalsefalsefalsefalse
Utilities runwaytruetruetruetruetruetrue
Utilities domaintruetruetruetruetruetrue
Utilities headlinestruetruetruetruetruetrue
Utilities slack alertstruetruefalsefalsefalsefalse
# Slack Connecting Pulse to your OCV Slack account to look up company info, check domains, and use other tools without leaving Slack. ### Setup You'll need an active Pulse account and access to OCV's Slack workspace. 1. In Slack, run `/pulse auth` 2. Click '**Authenticate with Pulse**' 3. Accept the Slack authorization Your Slack and Pulse accounts are now linked. To unlink, go visit your Profile in Pulse. ### Available Commands 1. `/ops help` - Lists all available commands. 2. `/ops details ` - Returns info about a company. The name is fuzzy-matched, so partial names or minor typos will still work. 3. `/ops domain ` - Checks domain availability across multiple TLDs. Results are visible to everyone in the channel. 4. `/ops headline ` - Evaluates a potential blog post title against criteria known to perform well. Returns a pass/fail rating. 5. `/ops recon <repo URL>` - Pulls metrics for a GitHub or GitLab repo (such as recent commits, merged pull requests, contributors). ### Link Previews When you paste a Pulse link in Slack, it automatically expands with relevant details about the resource. Repo links pasted in public channels also auto-expand with project metrics - the same you'd get from `/ops recon`. # Hiring Look for the shortest and most direct path to hiring. This is typically hiring from your network and applicable forums first. If you can hire someone you already know and quickly assess for aptitude and potential, you will hire good people faster. Don’t batch hire. Focus on filling your highest priority role and move on to the next once you have filled that role. OCV recommends hiring workers in the United States. Exceptions are made for critical hires. Companies typically have two or fewer key employees outside the US. A critical hire is someone who has extensive experience with your open-source project and can make significant contributions to your company's success. ## First hires First hires are almost always engineers. Here are a few specific attributes to screen for when hiring early engineers: 1. Product-driven versus working on interesting technical problems 2. Can operate in an environment with high ambiguity 3. Proactive and independent in managing their work 4. [Uses AI in their day-to-day workflow](https://www.opencoreventures.com/blog/every-startup-needs-ai-strategy-sid-sijbrandij) {% embed url="<https://youtu.be/JKZltdmXQXc?si=PHZY-J2_e76o6dY9>" %} ## Network recruiting Begin your talent search within your professional network. Who are the smartest people you've worked with in the past? Who were the smartest people you went to school with? This approach is particularly valuable for finding exceptional raw talent before they become "proven" in their careers. These individuals are often more motivated, less expensive to hire, and have tremendous growth potential. When evaluating these candidates, optimize for aptitude and slope—their natural abilities and how quickly they can learn and improve. Leveraging your network creates two advantages. It expedites the recruiting process because you have privileged insights about these candidates, and it streamlines interviewing since you've already established their competence and compatibility with your working style. ## Worker types OCV companies hire through Deel. Which Deel structure you use — **EOR** (Employer of Record) or **COR** (Contractor of Record) — and which agreements get signed depend on whether the worker is an employee or a contractor and whether they're inside or outside the US. For step-by-step setup, see the [Deel Founder Guide](https://docs.google.com/document/d/1P_EhGRiZHJNFW0E7-6Xt4jLa-SQEe4TGYq6S2Pd-vK8/edit?tab=t.0#heading=h.s81z4kppba), along with additional guidance below for contractors. ### US employees US-based hires are recommended by OCV. They're engaged through Deel as an EOR and sign the EOR employment agreement, which is handled in Deel. ### Non-US employees and all contractors Non-US employees, US contractors, and non-US contractors are all engaged through Deel as a COR. Non-US employees are reserved for critical hires only — typically no more than two key employees outside the US. Contractors are used for part-time or limited-scope work. Each signs the COR agreement in Deel, plus one additional document for contractors: * US contractors need to sign the standard consulting agreement (found in company Google Drive > ToolKit > Legal Forms), which includes an IP clause. * Non-US contractors must sign a standalone PIIA sent via the ATS. For issuing the PIIA, see the [PIIA Guide](https://docs.google.com/document/d/1Kgfd32rs54QsF7bC0juMJP4QXC-K8vMV-lml79npf0s/edit?tab=t.0#heading=h.eznapmgfmg50). ## Hiring advisors We don’t recommend bringing on external advisors except for project authors and key maintainers. People in both the startup and open source communities often just want to be helpful, without requiring compensation as a formal advisor. ### Project author/maintainers <a href="#project-author-maintainers" id="project-author-maintainers"></a> If you are not the original author or maintainer of the open source project, we strongly recommend making them an advisor. Their involvement promotes community trust, endorsement, and smoother collaboration (e.g., PRs, roadmapping). Even with limited availability, their influence, credibility, and connection to the community are high-value assets. ### Domain experts and contributors <a href="#domain-experts-and-contributors" id="domain-experts-and-contributors"></a> In rare cases, it may make sense to bring on a non-author advisor who offers material support to the business. **Example contributions:** * Reviewing or vetting technical candidates * Making customer introductions or opening sales channels * Offering visibility and credibility in the OSS community If you think there’s a need to meet with somebody on a regular basis where it would be fair to compensate them, discuss in office hours. ## Advisor compensation <a href="#advisor-compensation" id="advisor-compensation"></a> Formal advisors typically receive equity in the company to compensate for their time and effort. Equity allocation depends on the advisor’s level of active contribution, time commitment, and stage of the business. ### Advisor equity guidelines Minimum of 0.25%, maximum of 2.5%. Vesting period of four years (48 months), six-month cliff. **Criteria assessed:** 1. Original author of the project (assuming a single author): + up to 1.5% 2. Time commitment to advise the company on monthly basis: + up to 0.25% 3. Active involvement in building the business (i.e. contribute to brand building, customer introductions, recruiting, etc.): + up to 0.5% Merge requests improving the open source project are not considered to be active involvement in building the business. {% hint style="info" %} **Time commitment-based compensation example** Time-commitment allocations 1. Quarerly: 0.1% 2. Monthly: 0.25% 3. Weekly: 0.5% {% endhint %} ### Founder-Advisor Standard Template <a href="#founder-advisor-standard-template" id="founder-advisor-standard-template"></a> Advisor compensation and scope of services should be outlined clearly in the Advisor Agreement. Standard advisor agreements can be found in the Company’s drive under the Toolkit folder, which can be adapted as needed. Advisor equity compensation is based on the advisor's commitment and performance. Advisors need to fulfill both the time commitments and actions associated with their performance level. Use the [Founder Institute’s Founder Advisor Standard Template](https://fi.co/fast) (FAST) to generate a document for signature. ## Hiring contractors <a href="#block-9c79a7597b5b40f0b56c504a3f3abbf2" id="block-9c79a7597b5b40f0b56c504a3f3abbf2"></a> Contractors are self-employed individuals or companies hired to perform a specific job or service. They are not employees, are not entitled to employee benefits or protections (e.g., workers' compensation, unemployment insurance), pay their own taxes, and are typically paid a fixed fee or by project. Contractors are not eligible for equity. Both US and non-US contractors are engaged as Contractors of Record (COR) through Deel. See worker classification guidelines and contractor payment terms [here](https://docs.google.com/document/d/1P_EhGRiZHJNFW0E7-6Xt4jLa-SQEe4TGYq6S2Pd-vK8/edit). US-based contractors: For part-time or limited-scope work, engage the contractor as a COR in Deel. In addition to the COR agreement, US contractors must sign the standard consulting agreement in the company Drive under ToolKit > Legal Forms, which includes an IP clause approved by the OCV legal team. Non-US contractors: Engage non-US contractors as COR in Deel as well. In addition to the COR agreement, founders must provide a separate PIIA. See [here](https://docs.google.com/document/d/1Kgfd32rs54QsF7bC0juMJP4QXC-K8vMV-lml79npf0s/edit?tab=t.0#heading=h.eznapmgfmg50) for steps to issue the PIIA. ## Hiring relatives & partners We advise against hiring an individual who has a close relationship with the founders or another employee to avoid accusations of favoritism and blurring the lines between work and personal life. The appearance of nepotism can impact a workplace’s culture, creating complications at work with other employees. Managing relatives and romantic partners can also open up unnecessary liabilities and human resources risks. ## Visa sponsorship Due to the expensive and time-consuming nature of visa sponsorship and renewals, OCV companies do not provide visa sponsorship or transfers for team members. The only exception is executive relocation support for CEOs and CTOs. In these cases, OCV partners with an Employer of Record (EOR) to assist founders with visa transfers. <br> # Interview & Offer Process All employee offer letters and contract agreements need to be saved in your company's shared drive. ## Interview process <a href="#block-15b35b52c78b43adaf43b330b072ba2e" id="block-15b35b52c78b43adaf43b330b072ba2e"></a> 1. **Initial conversation:** Get to know more about the candidate as a person and their interest in this role. The candidate should be prepared to discuss logistics such as location, availability to start a new role, and their preferred range of compensation. 2. **First interview:** Evaluate the candidate’s skills, experience, and work history. The interviewer will also discuss more details concerning the project and the team. The interviewing team may ask the candidate to do a project as part of the hiring process. 3. **Final interviews:** In the final round, the candidate meets with additional team members as appropriate. 4. **Team debrief:** The interview team has an internal discussion concerning the candidate and determines whether to move forward with the hiring process. 5. **Reference checks:** Conduct 3-4 references before making an offer. It is ok to ask for references before the final interviews. 6. **Equity approval:** Any hires with options as part of their compensation package must be [approved by the board](https://handbook.opencoreventures.com/how-we-work/board-of-directors#block-debb3d4f659c4d43ae0509739dd23cc7) (OCV). 7. **Verbal offer:** Once the reference checks are completed (with satisfactory results) and equity is approved, move forward with an offer. Any renegotiation around what is approved would restart the approval checks. 8. **Formal offer:** The company founder initiates the onboarding process with the EOR, who will issue the employment agreement. 9. All offers are contingent upon successfully passing a background check and approvals. ## Reference checks Candidates should provide 3-4 references: 1. **Direct (or former) supervisor:** someone who is familiar with their work. 2. **Direct report:** If the candidate is applying for a management position, include someone the candidate supervised. 3. **A peer in the same role:** someone who did similar work. 4. **A cross-functional partner or customer:** someone who was a consumer of the candidate’s work. 5. **Backdoor reference checks:** Reaching out to network connections who may know the candidate is a great way to get valuable feedback during the recruiting process. Ask the candidate if there is anyone they prefer to exclude. Reference checking is provided by HiPeople, a third-party software that is integrated into the Greenhouse applicant tracking system. ## Equity approval Any hires with options as part of their compensation package must be approved by OCV before moving forward with a verbal offer. Select equity compensation based on [industry benchmarks for equity](https://docs.google.com/spreadsheets/d/11ma1R_j4sOootVk0pxGMX6s2_kdgYrlf3XHdNgqfhBs/edit#gid=0). Add the preliminary offer details to Greenhouse to be routed for equity approvals: 1. **OCV Head of Talent** approves option grants that represent <0.25% of the company’s fully diluted equity. 2. **OCV COO** approves option grants that represent 0.25-2% of the company’s fully diluted equity and above, and provide visibility to our General Partner through the ATS. 3. **OCV General Partners** will approve option grants that represent >2.0% of the company’s fully diluted equity. OCV's BizOps team can provide additional context on the status of the company’s capitalization table, including the company’s total share count, employee options pool, reserved options, any/or to be issued grants from previous hires, and the company’s remaining hiring targets. Equity grants are tracked by OCV. Quarterly, founders will review with the OCV BizOps team the tracked information for accuracy (especially the employee's actual start date) to generate associated legal paperwork. OCV will ensure the equity information is accurate and aligned with what is approved and submit the information to the legal team for preparation of associated paperwork. The legal team will relay to employees. ## Offer Letter {% hint style="info" %} ***"Founder Guide: Offer Letter Process"*** can be found in the OCV + Founders Shared Resources folder. {% endhint %} ### Indicative offer letters for non-U.S. candidates OCV presents non-U.S. employment candidates with indicative offer letters prior to an employment contract to demonstrate intent to hire an employee. The employer of record (EOR) firm will generate the official employment contract. Indicative offer letters generalize and outline intended terms, while local employment contracts are dictated by local law and include relevant local employment statutes. Indicative offer letters provide written documentation to move forward with providing notice to current employers and signify an intent to move forward with an opportunity, but are not directly binding until an employment contract is signed. In some countries (e.g. Netherlands, France, and Belgium), collective bargaining agreements provide industry-wide terms and conditions that will apply on top of employment contracts, which will cover items such as the notice period required from employer to employee in the event of termination. When employing executives or senior leaders, local legal teams can inform employment contracts beyond the guidance offered by the EOR. # HiPeople Guide Page Summary: How to write a job description. Reference requests are sent in the HiPeople stage within the Greenhouse candidate job record. In most existing jobs, this stage is already created, and the workflow uses pre-populated templates that you select to send to candidates. If this is a new job, ask OCV Recruiting for help. New jobs must first be created in Greenhouse using the template job that has this service integrated. ### Requesting candidate references using HiPeople <a href="#block-0c2a595e36f844ca9c7844a9690bae5d" id="block-0c2a595e36f844ca9c7844a9690bae5d"></a> 1. In the Candidate record, click Email \[candidate’s first name] to generate the address. 2. In the Template text box, select Reference Request Heads’ up from the dropdown menu. <figure><img src="https://imagedelivery.net/IEMzXmjRvW0g933AN5ejrA/assetsbulletsitefiles-190feb7b-074d-80c0-b17a-fc5cd5801abf-attachment293b85b2-030f-48c2-8fa6-6d8fd288e0c9screenshot_2025-02-03_at_53151_pmpng/public" alt="notion image" height="100%"><figcaption></figcaption></figure> 3. Click Send Email at the bottom of the page. 4. From the Candidate record, Send Test. <figure><img src="https://imagedelivery.net/IEMzXmjRvW0g933AN5ejrA/assetsbulletsitefiles-190feb7b-074d-80fe-83e8-ef884d540ee7-attachmentbcfe9d99-e413-43a5-a9e5-34ea949dc5f4screenshot_2025-02-03_at_54409_pmpng/public" alt="notion image" height="100%"><figcaption></figcaption></figure> 7. Select either: New Grad: References -*or-* Individual Contributor: References. Then, click Send Test <figure><img src="https://imagedelivery.net/IEMzXmjRvW0g933AN5ejrA/assetsbulletsitefiles-190feb7b-074d-8043-8984-d81e00832220-attachment9359cbf7-3a76-4ec5-97cc-9f937781aa91screenshot_2025-02-03_at_54626_pmpng/public" alt="notion image" height="100%"><figcaption></figcaption></figure> ## Candidate requests references HiPeople generates an email message to the candidate requesting contact information for three references. After receiving the contact information from the candidate, HiPeople sends an email to the candidate’s references to send feedback. See candidate FAQs [here](https://intercom.help/hipeople/en/articles/9167123-reference-check-candidate-faqs). ## Review candidate references After the references are received, HiPeople sends the Recruiter and the Hiring Manager a summary of the references in a consolidated report. The Recruiter and the Hiring Manager will review all references and interpret the results. Please make note of any highlighted stand-outs. If any feedback is missing or contains a questionable response, the Hiring Manager needs to contact the reference (or at least one former manager) to clarify. **Additional resources** [25 questions for reference calls](https://review.firstround.com/25-questions-for-reference-calls/) # Greenhouse Guide * Create a [job description](https://handbook.opencoreventures.com/recruiting-for-ocv-companies/job-description-guide/) * Establish the interview team and plan (stages and interviewer order) * Customize role-specific questions * Post the job to various job boards (for example, LinkedIn, Indeed, and Glassdoor) via the application tracking system **Setting up a new job** 1. The Hiring Manager creates a job description and an interview plan using the [Job Description Guide](https://opencoreventures.notion.site/Job-Description-Guide-646e8f1e2d974cefaaa91a3591bc626f) ## Open a new Job in Greenhouse Start In your [Greenhouse Dashboard](https://app4.greenhouse.io/dashboard) by selecting: #### Add - then Create a Job <a href="#block-73bbafab722145588f1b660ceb3713fc" id="block-73bbafab722145588f1b660ceb3713fc"></a> <figure><img src="https://imagedelivery.net/IEMzXmjRvW0g933AN5ejrA/wwwnotionso-image-lh7-usgoogleusercontentcom-rz4hwwebzwb-ed3pn1wygu73vydupchx_ba8tvcefd1bdc_euahefa2bm2ghhtticok-v6eewfmhucgbdsulygixbxhvaz6fugsgzk4pjgilqxrcpgbih2o2ejwrtgxorrq3owaedyog_7m14nq0thg/public" alt="notion image"><figcaption></figcaption></figure> <figure><img src="https://imagedelivery.net/IEMzXmjRvW0g933AN5ejrA/wwwnotionso-image-lh7-usgoogleusercontentcom-7inloweqkcavh0i9mzcvnwo4qw8m3rzgqhfdya9wqvgbed79wgp1ygi5tpdn32pyg6xpig_e9b8iox5wupz0v-_tcf1sk1oaqllbfkdiwpptkba3txh1sxxg_dh2eu-6dq09hykdfpbd8hqqnjmysyq/public" alt="notion image"><figcaption></figcaption></figure> Start from a template job: <figure><img src="https://imagedelivery.net/IEMzXmjRvW0g933AN5ejrA/wwwnotionso-image-lh7-usgoogleusercontentcom-twm3kt8rbmekbkycnmtsf0czu9gropoichsy4omep2ulurw76nwzdzhxzhzw33aatxb6trje5fnuf2olyucdp0xw-ra14byznxezmj3gnnfxbe0pfhuv2g5q0yutkm2vbkqp_fw8ad267gd5jfr2ig8/public" alt="notion image"><figcaption></figcaption></figure> Note: below update office to be your company name from the dropdown menu <figure><img src="https://imagedelivery.net/IEMzXmjRvW0g933AN5ejrA/wwwnotionso-image-lh7-usgoogleusercontentcom-bf-go06urmnksxyoehbw0yxy6uzzdmy0tkni2o0hd-web8_v5xgh_ewjxsfspic2ovnw5eswn1cpshg7v_6fvrb8fys7sviobqwotadrrmienfjvcbospq9ti7jcilf9f5wt1eotwovr5vs62jipieg/public" alt="notion image"><figcaption></figcaption></figure> #### Hiring Team: <a href="#block-71c5c908de154684ab3f0f38106bcba8" id="block-71c5c908de154684ab3f0f38106bcba8"></a> Who can see this job: Add your name and select permission: Job Admin: private #### Job Kickoff: <a href="#block-9e8a1f3465024c14a73c65e10f3a8cbf" id="block-9e8a1f3465024c14a73c65e10f3a8cbf"></a> Skip this step #### Candidate Scorecard: <a href="#block-c8bc022dd1694d7b9d46ca0de93a8bb3" id="block-c8bc022dd1694d7b9d46ca0de93a8bb3"></a> Complete as appropriate #### Post Job: <a href="#block-13bd903bde244a64b0b8db2e32d60d59" id="block-13bd903bde244a64b0b8db2e32d60d59"></a> Post to: Select your company name from the drop down menu See [Job Description Guide](https://handbook.opencoreventures.com/company-ops/people-ops/recruiting/job-description-guide) When hiring, a job description can make a difference in attracting the most qualified candidates!Here are ways to provide enough detail while keeping the description concise. **Logo** Be sure to include your company logo in the header section of the job description. **Job Title** Picking the right job title can bring the right candidates, as most candidates search job listings by the job title they want in their next opportunity. **Location** \[Company Name] is a fully remote early stage startup that prefers employees located in the United States or contractors in other locations. **About the Company** Strong attention-grabbing opener for the candidate to understand your company. This is the section to showcase your company culture, mission, how the company operates, and goals. **Job Summary (About the Role/Team)** This section explains more about the team and how the role fits into it. **Responsibilities and Duties** Outlining the core responsibilities of the role: this explains duties that would be unique to the company and the team (for example: promoting events via social media for an Event Management role).Highlight the day-to-day activities: explain tasks the role might be expected do on a daily basis to ensure a meaningful impact on business operations. **Qualifications and Skills** List of hard and soft skills: be sure to list out the years of experience required for the role, education requirements (if applicable), and whether remote work experience is required, be sure to include that as part of this section.Keep the list concise: avoid lengthy descriptions as we don’t want to deter potential candidates from applying. **Benefits Example** 1. Generous PTO 2. Flexible Hours 3. Medical, Dental, and Vision coverage (U.S. employees) 4. 401(k) (U.S. employees, when available based on company size) 5. All-remote work environment with country-specific holidays 6. Parental leave **Compliance (include at the end of the description)** The actual offer, reflecting the total compensation package and benefits, will be at the company’s sole discretion and determined by a myriad of factors, including, but not limited to, years of experience, depth of experience, and other relevant business considerations. The company also reserves the right to amend or modify employee perks and benefits.At \[company name], we operate in a transparent environment, with clear terms and open communication, guided by our public handbook. We celebrate and embrace differences as a strength and source of innovation. We dare to dream, dare to lead, and dare to change. We are resourceful, think creatively, and adapt quickly. We persevere, take challenges head-on, and do not bat an eye at the hard stuff.\[Company Name] is an Equal Employment Opportunity and Affirmative Action Employers. Qualified applicants will receive consideration for employment without regard to race, color, religion, sex, sexual orientation, gender perception or identity, national origin, age, marital status, protected veteran status, or disability status. #### Publish to free boards: <a href="#block-58243e8571bb4480a0dc6a882c33cc1e" id="block-58243e8571bb4480a0dc6a882c33cc1e"></a> Add/update a city and select to post if needed. Note: it is required to add a city.Complete the job opening. #### After opening the job there are a few more steps from the Job Dashboard page: <a href="#block-2db3513f267a4c7b80bb89dd23ad00ef" id="block-2db3513f267a4c7b80bb89dd23ad00ef"></a> #### From Job dashboard page Add Approvals: <a href="#block-37e1ed0424b4444785108e401a547fc9" id="block-37e1ed0424b4444785108e401a547fc9"></a> on the Left panel select “Approvals” then “Add approval Step”Add yourself as an approver and select “3 of 3 approvers required” <figure><img src="https://imagedelivery.net/IEMzXmjRvW0g933AN5ejrA/wwwnotionso-image-lh7-usgoogleusercontentcom-up1uoidpt7ubbxcgautguyviouwug2qwng1e4zzz-pbarhc30pyofknhqnf5xi3_6ij4exzykgu0l8ybnvwfjh0s69lqy2qnxyzvhs-uj-rg_gxbzdzkgw7kel1dygisor2kyupw9cojp2r-pcw2iss/public" alt="notion image"><figcaption></figcaption></figure> #### From Job dashboard page publish the Job Post: <a href="#block-2c65cf17c9f140bb989d6c956c38d961" id="block-2c65cf17c9f140bb989d6c956c38d961"></a> Toggle the status on and verify that you have selected the Your Company job board <figure><img src="https://imagedelivery.net/IEMzXmjRvW0g933AN5ejrA/wwwnotionso-image-lh7-usgoogleusercontentcom-lurof6knicng-lapkmbhmahwlrqdm3xoisxovx3mxcmiuadsgp7v7bbsxco1bws_yyqbxbomerxfa2zxfnx633kozsch8jsxjhvob63thz5x8hn3s110ko3czkr7wn5mcirfnmie7piabawxfd5kpok/public" alt="notion image"><figcaption></figcaption></figure> **Add a candidate** * If a candidate applies directly for the job there will be a candidate record in Greenhouse. * If the candidate was sourced directly you can manually add a record Learn how [Here](https://support.greenhouse.io/hc/en-us/articles/115002195063-Manually-add-a-candidate-or-prospect) **Managing candidates** Candidate Rejection email templates. When rejecting candidates in Greenhouse, there are 3 templates available depending on the situation: 1. Default Candidate Rejection: this is a generic rejection for applicants where we did not communicate with them directly. The message comes from a no reply email - you are welcome to switch it to your own email if you would like. 2. Rejecting Us: this message is used for candidates who withdraw from the process. The message will come from the person who sends it. 3. Rejection after an interview: this message is used for candidates that have had a conversation with one of us. This is a pretty basic message. If someone got deep in the process before being rejected I recommend personalizing the message a bit more than this generic template. This message comes from the person that sent it. **Rejection reasons** These are the reasons in Greenhouse to reject a candidate - selecting the appropriate reason for rejection will help us reengage candidates in the future and accurately report where our hiring activities can improve. | <p>Lacking skill(s)/qualification(s)<br>Duplicate<br>Other<br>Spam<br>Headcount Filled</p> | <p>We rejected them<br>We rejected them<br>We rejected them<br>We rejected them<br>We rejected them</p> | | ------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------- | | Rescinded offer | We rejected them | | Did not meet Technical Qualifications | We rejected them | | Did not meet leadership/managerial qualifications | We rejected them | | Tracking in Another Requisition | We rejected them | | Visa / Sponsorship needed | We rejected them | | Withdrew: Scope of Work | They rejected us | | Withdrew: Unresponsive | They rejected us | | Withdrew: Comp expectations | They rejected us | | Withdrew: Timing | They rejected us | | Decline: Accepted another offer | They rejected us | | Decline: Rejected offer | They rejected us | ## Job description guide When hiring, a job description can make a difference in attracting the most qualified candidates! Here are ways to provide enough detail while keeping the description concise. #### Logo Be sure to include your company logo in the header section of the job description. #### **Job Title** Picking the right job title can bring the right candidates, as most candidates search job listings by the job title they want in their next opportunity. #### Location \[Company Name] is a fully remote early stage startup that prefers employees located in the United States or contractors in other locations. #### **About the Company** Strong attention-grabbing opener for the candidate to understand your company. This is the section to showcase your company culture, mission, how the company operates, and goals. #### **Job Summary (About the Role/Team)** This section explains more about the team and how the role fits into it. #### Responsibilities and Duties **Outlining the core responsibilities of the role**: this explains duties that would be unique to the company and the team (for example: promoting events via social media for an Event Management role). **Highlight the day-to-day activities**: explain tasks the role might be expected do on a daily basis to ensure a meaningful impact on business operations. #### Qualifications and Skills **List of hard and soft skills**: be sure to list out the years of experience required for the role, education requirements (if applicable), and whether remote work experience is required, be sure to include that as part of this section. **Keep the list concise**: avoid lengthy descriptions as we don’t want to deter potential candidates from applying. #### **Benefits Example** * Generous PTO * Flexible Hours * Medical, Dental, and Vision coverage (U.S. employees) * 401(k) (U.S. employees, when available based on company size) * All-remote work environment with country-specific holidays * Parental leave #### **Compliance (include at the end of the description)** The actual offer, reflecting the total compensation package and benefits, will be at the company’s sole discretion and determined by a myriad of factors, including, but not limited to, years of experience, depth of experience, and other relevant business considerations. The company also reserves the right to amend or modify employee perks and benefits. At \[company name], we operate in a transparent environment, with clear terms and open communication, guided by our public handbook. We celebrate and embrace differences as a strength and source of innovation. We dare to dream, dare to lead, and dare to change. We are resourceful, think creatively, and adapt quickly. We persevere, take challenges head-on, and do not bat an eye at the hard stuff. \[Company Name] is an Equal Employment Opportunity and Affirmative Action Employers. Qualified applicants will receive consideration for employment without regard to race, color, religion, sex, sexual orientation, gender perception or identity, national origin, age, marital status, protected veteran status, or disability status. # Compensation & Benefits Compensation is an important issue for both companies and team members in the start-up world. Companies must offer compensation packages that are attractive and competitive, while team members must be willing to take on a certain amount of risk in exchange for the opportunity to be part of something new and exciting. With the right balance of risk and reward, start-ups can attract and retain top talent and continue to grow and innovate. OCV companies should want to hire people willing to take risks and value their equity compensation as owning a piece of a business with tremendous potential. We want a team committed to the company’s success, and are not solely motivated by a paycheck. ## Exempt vs. Non-Exempt Status <a href="#block-3bfc8f01844e4190be5538513e81df7f" id="block-3bfc8f01844e4190be5538513e81df7f"></a> In the US, employees are classified into two categories, exempt and non-exempt, based on the overtime pay and minimum wage laws, which can also vary by state. The primary difference between these two categories is how they are compensated for their work. Most OCV company employees during the first 18 months will likely have exempt status. Founders should pay attention to any admin hires like Executive Assistants (EAs). Exempt employees are those who are exempt from the overtime pay and minimum wage laws. They are typically salaried employees who are paid a fixed amount regardless of the number of hours worked. Exempt employees are not entitled to receive overtime pay when they work more than 40 hours a week. Common examples of exempt employees include executives, professionals, and administrative employees. Employers are not required to keep track of their hours worked or pay them overtime. ## Recommended employee benefits <a href="#block-6996f83840d8447b86e4c5f1e43e53a9" id="block-6996f83840d8447b86e4c5f1e43e53a9"></a> Specific details on worker classification guidelines and payment terms for contractors are [here](https://docs.google.com/document/d/1P_EhGRiZHJNFW0E7-6Xt4jLa-SQEe4TGYq6S2Pd-vK8/edit#heading=h.qxbn27alc7cu). | Employee Benefit | US Employees | Non-US Employees | Contractors | | ----------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------- | | Annual Salary | Yes | Yes | No | | Bonus\* | No | No | N/A | | [Employee Equity](https://docs.google.com/spreadsheets/d/11ma1R_j4sOootVk0pxGMX6s2_kdgYrlf3XHdNgqfhBs/edit?gid=0#gid=0) | Stock Options | Founders only | N/A | | **Healthcare\*\*** | <p>Premium Health Plan, Dental, and <br>Vision<br><br>The company pays 85% employee's premium</p><p><br>The company pays 50% for the dependents premium</p> | <p>No additional coverage if National Healthcare is available <br></p><p>Select a mid-level plan if National Healthcare is not available</p> | No | | **Paid Time Off** | 15 days [accrued](#tracking-employee-pto) | <p>Statutory compliance based on minimum local requirements for paid time off (which may accrue) and local holidays. </p><p></p><p>Can request additional paid time off (not accrued) subject to managerial approval.</p> | No | | **Remote Work** | Yes | Yes | Yes | | **Home Internet Reimbursement** | Yes | Yes | No | | <p><strong>Equipment</strong><br></p> | Yes | Yes | No (leasing available) | *\*Option for the company's CEO to implement the bonus plan after the external funding round. Each company should establish an annual performance and compensation review process.* *\*\*The company pays for healthcare plan premiums; there may be additional copays or out-of-pocket costs to employees and dependents. See details for country-specific compliance* [*here*](https://www.deel.com/benefits-tool)*.* ## Cash compensation OCV companies have to manage their burn rate and cannot always offer salaries that compete with a larger, established company. OCV companies offer stock equity incentives, opportunities to learn the latest technologies, and rapid career advancement. Hiring managers should look for team members who are willing to take a certain amount of risk when working for a start-up. Team members must weigh the risks and benefits of working at a start-up and decide if such an opportunity is right for them. Do not discuss one person’s compensation based on someone else’s compensation. There is no “fairness” in compensation, only the market rates. Consider adding a compensation page to your company handbook outlining your policy. Appropriate compensation based on location is challenging to implement and maintain, but ultimately, it will enable you to hire the best talent for your team regardless of location. ### Pay location-based market rates Use location-based market rates for compensation. Paying based on regional rates is more standard than paying a global compensation rate. U.S.-based roles tend to have a higher percentage of equity in the total compensation package. Some companies advertise compensation packages at a global rate, which may send a message that the company can't hire anyone who lives in high-cost-of-living areas, but represents above-market compensation to people in the rest of the world. When companies post their roles with salary transparency and pay the same everywhere, it may appear simple, but a one-size-fits-all approach has limitations. Great candidates who live in high-cost-of-living areas may be unaffordable to compensate when compared to a global rate, and can negatively impact staffing choices. Use these benchmarking tools to better understand fair market compensation for salaries: * [Pave](https://www.pave.com/) * [Betts](https://insights.bettsrecruiting.com/compensation-guide/) (for GTM / Sales roles) * [Levels.fyi](https://www.levels.fyi/?compare=GPT,Google,Facebook\&track=Software%20Engineer) * [Glassdoor](https://www.glassdoor.com/Salaries/job-title-salary-SRCH_KO0,9.htm) * [Salary.com](https://www.salary.com/) ### Pay in local currency Pay employees and contractors in their local currency to avoid situations of adverse exchange rate fluctuations for the employees. Exchange rate management is not a core activity for scaling the business and will create an unnecessary distraction for the management team down the road. ## Equity compensation {% hint style="info" %} Use the [Company Equity Grant Benchmark Tool](https://docs.google.com/spreadsheets/d/11ma1R_j4sOootVk0pxGMX6s2_kdgYrlf3XHdNgqfhBs/edit?usp=sharing) to determine equity grants. {% endhint %} Equity compensation aligns incentives between the company and the employee base. It can serve as a great tool to attract and retain talent. Full-time employees should receive equity incentives in the business they’re helping to build. Equity is not available for team members hired as contractors. Equity grants should also consider the remaining options pool available for candidates and the overall capitalization table of the company. The number of shares that can be granted to employees is typically determined by an options pool established during the entity formation phase of the company. Cash and equity compensation should be considered holistically as part of the overall compensation package. Determination of equity considerations for employees is not an exact science but equity grants should reflect a candidate’s: 1. Role & responsibility at the company 2. Experience level 3. Market indications for comparable positions given the stage of development of the company. U.S. employees typically receive ISOs. Non-U.S. employees and contractors typically receive NSOs. ## Annual performance review and raises <a href="#block-2afd54f0ec2f47ccaa6b4efff45b93c3" id="block-2afd54f0ec2f47ccaa6b4efff45b93c3"></a> Management teams are responsible for developing an annual review process. Compensation increases should be based on market rates for roles rather than inflation-based adjustments. Market adjustments naturally incorporate inflation to some degree while also considering broader economic factors that affect compensation—sometimes even offsetting inflation increases. For example, inflation may be high while market rates remain stable. Companies should strive to maintain parity with overall market compensation levels. Therefore, salary adjustment discussions should focus on market rates rather than changes in employee cost of living. When a founder determines that a role merits a market-rate increase based on performance or requires adjustment for market parity, they should notify the accounting team and update the necessary changes with the company's EOR and payroll provider. ## Tracking employee PTO Employees engaged through the EOR accrue PTO with minimum amounts determined by local laws. You can view the required PTO for each location in your EOR platform. The EOR requires an accrual-based PTO policy, and each company must establish its own PTO policies that comply with the local statutory requirements outlined by the EOR. Managers can approve time off that has not yet accrued by the employees, effectively providing more than the statutory amounts of PTO. This is done on a case-by-case basis, and the PTO will need to be approved and tracked in your EOR platform. Companies should consider PTO accrual as part of cash flow planning and emphasize the importance of tracking PTOs in the EOR platform with their team members. Founders, please see detailed instructions on how to track PTO [here](https://docs.google.com/document/d/1P_EhGRiZHJNFW0E7-6Xt4jLa-SQEe4TGYq6S2Pd-vK8/edit#heading=h.i9bzcesidxao). Unused, accrued PTO is paid out according to local regulations when an employee leaves or the company winds down. ### PTO carry-over and year-end policies PTO carry-over rules vary by state and impact final payout obligations: * California, Montana, Nebraska, and Colorado: Unused PTO carries over indefinitely and must be paid out in full at termination. * All Other States: Unused vacation from the previous year is forfeited at year-end and will not be included in final payouts. Founders should clearly communicate carry-over policies to employees during onboarding and in the employee handbook. ### Contractor PTO policy Generally, contractors are not eligible for paid time off. Immaterial time periods are generally permissible, e.g., half-days, as part of normal remote work flexibility. Material time-off should be discussed and agreed with founders in advance, and the invoice rate may need to be adjusted accordingly, especially if billed as a weekly or monthly rate. # HR Compliance Page Summary: Cyber security training, harassment training, ## Cyber Security/Sexual Harassment Prevention Training We recommend at around 50 employees, companies start Cyber Security and Sexual Harassment Prevention Training. ### What is Phishing? <a href="#block-b54b179574fd4b5daabd00ee952a7cea" id="block-b54b179574fd4b5daabd00ee952a7cea"></a> Phishing is a cybercrime in which the scammer pretends to be a trustworthy individual by using email and/or text to obtain access to sensitive information or monetary goods. #### Types of Phishing <a href="#block-2e738f4c4d014e90bc8c6fa5c1a7dd67" id="block-2e738f4c4d014e90bc8c6fa5c1a7dd67"></a> Email Phishing: The most common type of phishing as it is the easiest to approach the targeted individual. Scammers usually embed a hyperlink to take individuals off their email to lure individuals to share information on a bogus website/link.Malware Phishing: This type of attack hides as an attachment (such as a resume or document). Once the individual opens the attachment the malware embeds itself on the computer and in systems.SMS/Text Phishing: The scammer reaches out to the individual by text pretending to be someone the individual knows asking them to purchase gift cards and initiate bank transfers.Vishing: The scammer reaches out to the individual by phone and tries to obtain sensitive information by voice call or leaving a voice message. #### How to Prevent Phishing <a href="#block-060823775b50443ca494883bdd837794" id="block-060823775b50443ca494883bdd837794"></a> Look at the Sender’s Email: It is from someone you know\.Look at the Hyperlinks before Clicking: Make sure the hyperlink is correct before filling out your information.Beware of “your account has been frozen” and “your permissions are suspended” type Emails: These emails are to create fear. Always double-check with your account first before clicking.Read Who it is Addressed: Generic phishing emails are very common, “Dear Valued Customer” are used for more fraudulent cases.Check for Spelling and Typos: Spelling mistakes and incorrect grammar are red flags for a scam. ### Sexual Harassment Prevention Training <a href="#block-a5b2ac1a1eb749c48f86ed2d7c422b6d" id="block-a5b2ac1a1eb749c48f86ed2d7c422b6d"></a> It is very important that we have sexual harassment prevention training in place to educate and remind everyone what is not acceptable behavior in the workplace.Below are trainings that would help with prevention:Supervisor - people manager of employees<https://sexual-harassment-prevention-training.dfeh.ca.gov/SupervisoryEnglish/story.html>Non-supervisor - does not manage any employee<https://sexual-harassment-prevention-training.dfeh.ca.gov/NonSupervisoryEnglish/story.html><br> ### **Document Security** When it comes to document security, it’s important to define what is "sensitive" and create rules around it. A simple solution is to add a text string to sensitive files that you would not see on other documents. For example, we could put SENSITIVE in the header of all sensitive documents, then set a rule to detect that. Once you’ve established a security identifier, you can then run a search to show how many sensitive files match one of these rules. You can also run a search to identify documents containing sensitive and confidential data such as SSNs, bank account numbers, etc.Most business suite providers have built-in security features to alert and enforce additional rules. You’ll want to start with alerting, to avoid breaking business processes. The enforcement it can: block external sharing, warn about external sharing, and prevent downloading printing, and copying. ### **Data Ransom** HBS Article: [Your company’s data is for sale on the dark web. Should you buy it back?](https://hbr.org/2023/01/your-companys-data-is-for-sale-on-the-dark-web-should-you-buy-it-back)The answer is no.\ <br> # Your Company's Handbook and Template ## #### Milestones <a href="#block-d07988e4afae42a4a9a77f3e9a083674" id="block-d07988e4afae42a4a9a77f3e9a083674"></a> This is a suggested timeline for starting a company handbook. Use the templates available on this page to start your public handbook. 1. Pre-CEO 2. Handbook directory created 3. [Introduction](https://handbook.opencoreventures.com/public-handbook-and-template/#block-b724c0e8620945f3b4a634699f6b81d6) 4. [About](https://handbook.opencoreventures.com/public-handbook-and-template/#block-c57f7d9ef03846b6846f6857538b9e9a) 5. [Product roadmap](https://handbook.opencoreventures.com/public-handbook-and-template/#block-ae9094eb768f4de394a04d016e568e48) 6. Post-CEO 7. [Communication](https://handbook.opencoreventures.com/public-handbook-and-template/#block-fd7475334acf45b5894136badd9c7711) 8. Growth 9. [Values](https://handbook.opencoreventures.com/public-handbook-and-template/#block-2c5a49ce8ee84388841f64b9b589d5d0) ### Handbook organization <a href="#block-b71f294162ec49509261143a337f3a2f" id="block-b71f294162ec49509261143a337f3a2f"></a> Suggested root directories with explanations for each. Suggested reading: [What goes in a company handbook?](https://about.gitlab.com/company/culture/all-remote/handbook-first-documentation/#what-goes-in-a-company-handbook) #### Introduction <a href="#block-b724c0e8620945f3b4a634699f6b81d6" id="block-b724c0e8620945f3b4a634699f6b81d6"></a> Include an introduction on the handbook’s homepage explaining its function and how to use it. For example: > The \[company name] handbook is the official repository for how we run the company. It’s a living document that is continually updated. It includes information about the company, product, teams, and workplace policies and practices. Search for keywords like “benefits” or “support process” to find the relevant entry. > As an open core company, we value transparency and learning in the open. We welcome feedback and encourage contributions. Please make a \[pull/merge] request to suggest improvements or add clarifications. Feel free to adapt from this handbook. Consider including more explanation if it makes sense for your company: 1. What it means to work transparently 2. Why it’s important to work in public 3. The benefits of maintaining a public handbook 4. Contribution guidelines #### Company <a href="#block-a070118eb87e4f219ab179fd32445cd9" id="block-a070118eb87e4f219ab179fd32445cd9"></a> The company section of the handbook includes information that applies to the entire company. Suggestions for company sub-directories: **About** The about section of the handbook tells the world who you are. It answers *why* you do what you do. It may include a mission and vision statement and a brief history of the company's start. This is a good place to document company milestones and achievements over time. Consider creating a single “about” page on the company website and linking to it from the handbook. [Shopify provides free templates](https://www.shopify.com/blog/how-to-write-an-about-us-page#4). **Communication** The communication section of the handbook sets the standard for how the company communicates. It might include the standard date format, how and when meetings are held, approved communication channels, accessibility considerations, and general conduct expectations.Check out these early-stage company examples for inspiration: * [Synura](https://www.synura.com/handbook/general/communication/) * [FlowForge](https://flowforge.com/handbook/company/communication/) **Product Roadmap** TODO **Values** A company’s values define the company culture. They shape how individuals work with each other as colleagues and in the community. A company’s values direct how decisions get made, how quickly teams ship, and employees’ sense of belonging.Introduce your values by defining their purpose. For example: > Our values shape how we interact with each other to achieve our goals collectively. They describe how we aim to create a culture of respect, transparency, and success. Everyone in the company is expected to live these values at work. List your values, explain their meaning, and give a contextual example of what it means to “live” that value.Examples: * [Fleet](https://fleetdm.com/handbook/company#about-fleet) * [GitLab](https://about.gitlab.com/handbook/values/) * [Honeycomb.io](https://www.honeycomb.io/about) * [Twilio](https://www.twilio.com/company/values) 🔗 Recommended reading: [Make Your Values Mean Something](https://hbr.org/2002/07/make-your-values-mean-something) #### Standard operating procedures <a href="#block-50dd54219c934e6ea5cda4fdd728be46" id="block-50dd54219c934e6ea5cda4fdd728be46"></a> Also known as the “day-to-day,” this section of the handbook details company-wide operational policies and procedures. Operating information important for all company employees goes here, even if a single department may be the directly responsible group. For example: 1. Policies 2. Tools we use 3. Spending company money 4. Company goal setting #### Departments <a href="#block-e024caada1f94d329c45b2d61c1125f2" id="block-e024caada1f94d329c45b2d61c1125f2"></a> Each department (i.e. engineering, product, people, marketing, etc.) will have its own sub-directory where department-specific policies and procedures are detailed. Depending on the department's business, department-level handbooks may vary greatly in content and structure.Common elements for department-level pages include: * Roles and responsibilities * Performance indicators * Planning procedures * Onboarding procedures # Employee onboarding This page covers onboarding once a worker type has been chosen. To decide which Deel structure and agreements apply to a given hire (US employee, non-US employee, US contractor, non-US contractor), start with [worker types](/company-ops/people-ops/recruiting#hiring-process). **US employees (EOR).** Once the offer letter is signed, create the contract and onboard the new hire into your company's EOR account in Deel. New employees complete the EOR onboarding process and sign the employment agreement before their start date. Most hires take a minimum of one week to onboard — confirm timing with the EOR before committing to a start date. For step-by-step setup, see the [Deel Founder Guide](https://docs.google.com/document/d/1P_EhGRiZHJNFW0E7-6Xt4jLa-SQEe4TGYq6S2Pd-vK8/edit?tab=t.0#heading=h.lq6pm997maqd). **Non-US employees and all contractors (COR).** These are engaged as Contractors of Record in Deel. See the [Deel Founder Guide](https://docs.google.com/document/d/1P_EhGRiZHJNFW0E7-6Xt4jLa-SQEe4TGYq6S2Pd-vK8/edit?tab=t.0#heading=h.ckcbh09v4ebx) for COR onboarding steps, and the section below for the additional documents contractors must sign. Background checks are run by the EOR after all documents are uploaded, except for new hires in Germany, France, Israel, and Ireland, who go through a separate background check provider. ## Onboarding contractors Both US and non-US contractors are engaged as Contractors of Record (COR / non-invoicing) through Deel. In addition to the COR agreement: * **US contractors** sign the standard consulting agreement (Drive > ToolKit > Legal Forms), which includes an IP clause. * **Non-US contractors** must be provided a separate PIIA (Proprietary Information and Inventions Assignment) to sign and store in the contractor's HR folder. The PIIA is sent via the company ATS used for hiring. See instructions [here](https://docs.google.com/document/d/1Kgfd32rs54QsF7bC0juMJP4QXC-K8vMV-lml79npf0s/edit?tab=t.0#heading=h.eznapmgfmg50). The standalone PIIA provides critical protections beyond the standard language in EOR agreements and is an important element of diligence for future investors. ## Employee equipment purchases All work should be performed on a company-issued laptop or computer equipment. Companies should provide necessary equipment to their team members. Companies should establish their own equipment purchase policies and price range guidelines including considerations for job functions. Generally, employees or their managers can purchase the equipment on their corporate credit card or follow the company’s typical expense reimbursement processes. Contractors should provide their own equipment. ### Laptop recommendations Apple Macbooks are the standard laptop for most employees. 1. [Macbook 14-inch, 512 GB](https://www.apple.com/shop/buy-mac/macbook-pro/14-inch-space-gray-apple-m2-pro-with-10-core-cpu-and-16-core-gpu-512gb) for non-engineering roles 2. [Macbook 16-inch, 1TB](https://www.apple.com/shop/buy-mac/macbook-pro/16-inch-space-gray-apple-m2-pro-with-12-core-cpu-and-19-core-gpu-1tb) for engineering roles There are some cases that Macbooks might not be the right fit for the company or new hire. In these cases, please purchase the company preferred laptop from the brand that best fits the needs of the company. ### Purchasing laptops for employees When possible, purchase equipment for new hires before their start date to ensure they are fully equipped on day one. The equipment can be expensed prior to their start date. 1. Confirm the delivery address with the new hire . 2. Use the company expense account credit card to make the purchase on the [respective Apple website](https://www.apple.com/choose-country-region/) of the delivery country. ### Employee reimbursement for laptop purchase Where there are limitations in local ability to purchase laptops, the new hire should purchase the laptop themselves and be reimbursed through the company’s payroll. **Limitations include:** 1. Foreign credit cards are not accepted by the website 2. Delivery not available ## Leasing equipment to contractors {% hint style="info" %} Use the provided [Template Agreement](https://docs.google.com/document/d/1TlpEqfZeyfFkYAvYFDquaX0DPtsp67Qd4OFHG71yj40/edit) for leasing equipment to contractors. {% endhint %} Best practice provides that contractors should use their own equipment for work. OCV companies are not obligated to provision equipment to contractors. However, the company may, at the discretion of the CTO / CEO, lease a contractor the necessary equipment required to effectively perform their work for $1 USD. This includes laptops and other essential hardware. In these situations, it may be necessary to advance funds to the contractors to purchase the equipment in their country. The company retains ownership of the equipment when the contractor is no longer working with the company. ## Tracking laptops as fixed assets Laptop purchases are to be tracked by the hiring manager who can modify the [fixed asset tracker](https://docs.google.com/spreadsheets/d/1HiZkM6JUPhUjYp_VXlpNMiWpZv7uZYnQE_02k59SqtI/edit?gid=0#gid=0) template and save to the company’s drive for ongoing company equipment tracking. ## Systems onboarding You will onboard new hires to their workspace email, password manager system, internal messaging system (e.g. Slack, GChat, Discord), and any additional systems (e.g. GitHub, Jira, AWS) specific to the company and/or team that the new hiring is joining. Only company founders (CEO & CTO) should be added to the `#ocv-company` Slack channel. A separate channel should be created for any additional team members to facilitate communication with their founder(s). ## Remote work resources \[Company] is an all-remote company with employees not localized to a single office.For employees new to all-remote work, the following guides may be helpful: * <https://about.gitlab.com/company/culture/all-remote/guide/> * <https://about.gitlab.com/company/culture/all-remote/getting-started/> * <https://about.gitlab.com/company/culture/all-remote/onboarding/#the-importance-of-onboarding> * <https://about.gitlab.com/handbook/leadership/building-trust/> ## Performance Evaluation ### Engineering <a href="#block-a01dea8c5c234b1eadb24a71cf3f0d3f" id="block-a01dea8c5c234b1eadb24a71cf3f0d3f"></a> #### Ramp-up time <a href="#block-3bc03c63ed3a46e4a0771a826a649369" id="block-3bc03c63ed3a46e4a0771a826a649369"></a> 1. 3-month ramp-up time if unfamiliar with the product. 2. Expect an additional 3 months if unfamiliar with the language and/or framework. #### Performance Indicators <a href="#block-9d421839add34120a2f59ab9b7768a25" id="block-9d421839add34120a2f59ab9b7768a25"></a> There’s no single ideal metric for measuring engineering performance but measuring merge request, or pull request, (MR/PR) rate is the best metric to start with. **MR Rate** [MR Rate](https://about.gitlab.com/handbook/engineering/development/performance-indicators/#mr-rate) measures impact by tracking how many changes an engineer is able to merge into the production code base. Start by setting a baseline of 20 MRs per month per engineer for early-stage companies. Evaluate all engineers against the baseline metric and avoid comparing engineers to each other. Productive engineers will meet the baseline, unproductive engineers will not. # Offboarding Summary: Guidelines on offboarding employees. ## Terminations Founders please see detailed instructions [here](https://docs.google.com/document/d/1P_EhGRiZHJNFW0E7-6Xt4jLa-SQEe4TGYq6S2Pd-vK8/edit#heading=h.m5ac32osc4sq) ### Voluntary <a href="#block-d472ed462c9d4730bb4e0f3a1a7a2081" id="block-d472ed462c9d4730bb4e0f3a1a7a2081"></a> Voluntary termination is when an employee chooses to leave the company at their will.In countries without at-will employment, the company may require a statutory notice period to determine the employee's last working day which may impact when an employee’s termination date would take place.It is possible that an employer may want to release an employee seeking voluntary termination prior to the employer’s potential minimum guaranteed notice at their request. In such scenarios, the employer should check in with the EOR about locally compliant options (though a two week notice is recommended to ensure a smooth transition, see below).It is also possible that employees may be able to exercise a minimum notice period to determine their termination date. Employers should review the employee’s locally compliant employment contract and seek guidance from the EOR on local regulations.If there is no notice period included in the employment contract, the employee should provide the company with two weeks' notice to ensure a transition progresses smoothly.See some examples showcasing considerations regarding the timing of voluntary terminations in the following diagram. ### Involuntary <a href="#block-42f316c295e9495a99a3b72b07510664" id="block-42f316c295e9495a99a3b72b07510664"></a> Involuntary termination will take place when an employer terminates an employment due to various reasons such as underperformance, unethical, dishonest, or illegal behavior, making other team members or customers feel unsafe in their work environments, or major strategic shifts in company strategy or financial position.Involuntary terminations should be handled with care and follow a clear process to ensure that the employee is treated with respect and dignity. It is important to document the reasons for termination and follow any legal or contractual obligations such as providing notice or severance pay. Employers should review the employee’s locally compliant employment contract and seek guidance from the EOR on local regulations.\ \ The following guidelines will help you navigate these conversations:<br> * Prepare in Advance – Gather all necessary documents (termination letter, final paycheck details, benefits information). Verify compliance with company policies and legal requirements with your EOR. * Be Direct and Concise – State the reason for termination clearly without excessive detail or discussion. Use neutral, factual language. * Show Compassion – Acknowledge the situation's difficulty. Maintain a respectful tone and give the employee space to process. * Stay Professional and Neutral – Focus on objective facts without excessive justification. Avoid making promises or speculative statements. * Have a Witness – Include a neutral HR representative or manager to ensure professionalism and clarity. * Outline Next Steps – Cover essential details about final pay, benefits, severance (if applicable), and company property return. * Allow for Dignity – Provide privacy for processing the news and, when possible, let the employee depart the call on their own terms.<br> For founders only: Details on how to initiate a termination can be found [here](https://docs.google.com/document/d/1P_EhGRiZHJNFW0E7-6Xt4jLa-SQEe4TGYq6S2Pd-vK8/edit#heading=h.m5ac32osc4sq) #### Reduction in force (RIF) <a href="#block-541a6b9fa1eb433eac46e7fd9694260e" id="block-541a6b9fa1eb433eac46e7fd9694260e"></a> There is no specific legal definition of "reduction in force" (RIF), but it generally refers to a process by which a company reduces its workforce, often due to financial or strategic reasons. This can involve laying off employees, terminating contracts, or not renewing contracts, for specific functions or company-wide.Companies undergoing RIFs should consult with employment and legal counsel in planning their separation processes. For example, the [WARN Act](https://www.dol.gov/agencies/eta/layoffs/warn), and/or other employment laws may need to be taken into consideration.Communicating a RIF to employees should only be done once all legal and logistical details are completed. All termination paperwork needs to be completed before letting anyone know they have been affected. It’s incredibly important to have a [communication plan](https://handbook.opencoreventures.com/terminations/#block-2aa46dc888de4e80a5c02310aaceae57) in order before you make any announcement. For a RIF scenario, your communication plan may include: 1. Two scripts: one for communicating to affected employees, and one for communicating to non-affected employees if you plan to make the announcement in person to each group. 2. A written announcement to be shared via email, slack, or both announcing the RIF and any necessary next steps. This should be done *after* affected employees have been notified. See the [communication plan](https://handbook.opencoreventures.com/terminations/#block-2aa46dc888de4e80a5c02310aaceae57) section and [additional considerations](https://handbook.opencoreventures.com/terminations/#block-36dce0dcce514362943ba46e347956c7) below for more details.Additional resources: [Cooley’s Checklist for Reductions in Force](https://drive.google.com/file/d/1-_j3XtubqudZybIt3L_jzt4zNxdUg7lP/view?usp=sharing). **Company wind down** In the event that a company is shutting down, reductions in force may have additional considerations to account for. See additional processes and considerations at[🚪Company Wind Down](https://handbook.opencoreventures.com/company-formation/company-wind-down/). ## Responsibilities and strategies for involuntary terminations <a href="#block-6545ab7372574578af853e8e7e026778" id="block-6545ab7372574578af853e8e7e026778"></a> The management team is responsible for planning and executing involuntary terminations in ways that are compliant with applicable employment laws and regulations while treating impacted individuals respectfully. #### Separation planning <a href="#block-a71999ed7ebb4435a77d8409c9250dac" id="block-a71999ed7ebb4435a77d8409c9250dac"></a> In planning separation packages and timing, keep in mind that corporate officers have a [fiduciary duty](https://handbook.opencoreventures.com/board-of-directors-and-board-approval/#b2c7896e01af4ad58e34505cc614c58e) to the business and company investors.OCV will provide input into planning separations and approve any [restructuring of the company including dissolution](https://handbook.opencoreventures.com/board-of-directors-and-board-approval/#debb3d4f659c4d43ae0509739dd23cc7).Planning around involuntary separations may resemble the following steps. 1. Create a separation plan: 2. Identify impacted individual(s) 3. Understand and document the company’s legal and contractual obligations around the separation (for example: payment for work completed, accrued vacation payout, any mandatory holiday allowances, and probation period end date, notice period and severance requirements, etc. - see [additional considerations](https://handbook.opencoreventures.com/terminations/#block-36dce0dcce514362943ba46e347956c7) below) 4. Determination of these obligations will be solicited through a request to the company’s PEO. 5. If applicable, make a proposal for total payments associated with termination including [severance](https://handbook.opencoreventures.com/terminations/considerations-in-involuntary-terminations/#fd4c7b7fa9d642aeb32de162cd5bc993) or separation incentives intended for employees and any [other resources](https://handbook.opencoreventures.com/terminations/considerations-in-involuntary-terminations/) which may be appropriate given the context of any obligations. 6. Any payments and incentives must be associated with a release of claims. 7. Legal and contractual requirements and recommended payments along with other considerations can impact what is reasonable to offer in a package. 8. Create a [communication plan](https://handbook.opencoreventures.com/terminations/#block-2aa46dc888de4e80a5c02310aaceae57) 9. Determine the timing of the announcement/communication. There may be legal requirements or associated considerations which should be accounted for in such planning. 10. Protect company resources (for example, turn off access to company systems) 11. Review separation plan with legal counsel and continually seek guidance from PEO partners where appropriate. 12. Review draft release of claims and termination agreements 13. Schedule employee meeting(s) - ideally, any separation paperwork should be available at the time of communication 14. Sign agreements and save these in the company’s HR files #### Considerations in involuntary separations <a href="#block-36dce0dcce514362943ba46e347956c7" id="block-36dce0dcce514362943ba46e347956c7"></a> It is important when planning involuntary separations to be mindful of local legal requirements, contractual obligations, and employee specific considerations. See the following page for more details on some considerations which may factor in.[🧾Considerations in involuntary terminations](https://handbook.opencoreventures.com/terminations/considerations-in-involuntary-terminations/) #### Communication plan <a href="#block-2aa46dc888de4e80a5c02310aaceae57" id="block-2aa46dc888de4e80a5c02310aaceae57"></a> Effectively communicating a large-scale layoff, or RIF is crucial for both showing respect and compassion for affected employees and maintaining company morale. An effective communications plan should adhere to the following guidelines: early planning, consistent messaging, and providing a transparent rationale.Start planning early. Once it’s decided that a RIF is necessary, start planning how this is going to be communicated. Pull in only the necessary stakeholders to help draft a communications plan. Things to consider when starting your plan: 1. How will impacted employees be notified? 1:1 communication is preferred in this scenario. 2. How will you communicate the RIF company-wide, after affected individuals have been notified? 3. In the case of a Company Wind Down driving a RIF, it may be worth having company wide communications prior to specific 1:1 communications 4. Does anyone else need to be directly notified about the change? Be consistent with messaging and provide rationale for the decision 1. Draft an FAQ and update it as you are sorting out logistics. 2. Include the rationale behind the decision. Be as honest and transparent as possible but do not give any confidential details. Include any other alternative options that were considered and/or taken and why it was necessary to take this particular course of action. 3. Do not provide details of any affected individuals to the wider company 4. To avoid [misclassification](https://handbook.opencoreventures.com/team-classification/), any potential incentives associated with contractors will be termination payments (not severance) and should only be referred to as such. # Accounting & Finance Team Each OCV company will engage directly with a dedicated external Accounting & Finance team. The Accounting and Finance Team invoices each company directly at pre-negotiated billing rates. The Accounting & Finance Team helps companies manage: 1. ​[Bank accounts](/company-ops/finance-ops/bank-management) 2. ​[Corporate credit card expense reconciliations](/company-ops/finance-ops/company-expenses#corporate-credit-card-usage)​ 3. [Invoice processing and payments](/company-ops/finance-ops/payment-processing) (both customers and vendors) 4. ​[Payroll administration](/company-ops/finance-ops/company-expenses#payroll-processing)​ 5. [Monthly financial statements](/company-ops/finance-ops/finance-ops-systems-overview#block-0fdfeb7b074d80a1aca9f0d1a62adec8) 6. [Tax filing and compliance](/company-ops/finance-ops/taxes) 7. ​Runway modeling (generally for post-Seed companies) CTOs and CEOs will be introduced to their Accounting & Finance team at onboarding and will have a dedicated messaging channel to communicate with this team as needs and questions arise. ## Monthly finance review meeting <a href="#block-0fdfeb7b074d80a1aca9f0d1a62adec8" id="block-0fdfeb7b074d80a1aca9f0d1a62adec8"></a> Before CEO onboarding, OCV meets with the Accounting & Finance Team to review runway, key changes in company financials, and company updates, etc. Once a CEO is onboarded, the Accounting & Finance Team will schedule a dedicated monthly finance review call for the company. OCV will support transition and join as optional until Seed round closes. ## Budget for 18 months of runway <a href="#block-28bfeb7b074d80e5a7a3d7e9fca771a4" id="block-28bfeb7b074d80e5a7a3d7e9fca771a4"></a> In general, we recommend creating a rough operating budget for \~18 months of runway at the start. This is a reasonable time estimate to meet key milestones that Seed round investors would be looking for in their investment evaluation. Market conditions and company-specific needs may increase or decrease this estimate. The key is to plan for and allocate resources ($) to meet milestones that will (1) demonstrate sufficient traction to secure new funding from investors and (2) increase the valuation of the business. # Bank Management ## Operating bank accounts Maintain two operating accounts at two different institutions.\* 1. **Primary account:** Designated for day-to-day activities. This is where you sync up your finance systems like payroll, bill pay, subscription collection for incoming cash receipts, etc. 2. **Backup account:** Designated for emergency situations. Your backup account should be held at a different bank from your primary account. * **Secondary Emergency Funds Account:** This is a backup account that can hold up to a $250,000 balance through the company’s [Corporate Card provider](broken://pages/RZdTdVtT4xpSESefv2Xa#brex-secondary-checking-account). Do not keep excess cash in your operating accounts. Select operating account partners based on your business needs. For example, do you need foreign currency exchange, run ACH at scale, a line of credit? Make sure the selected banks can serve your business needs effectively. Never agree to a 100% exclusive relationship with a single bank. *\*Certain FinTech platforms are not banks themselves. It’s critical to select platforms that partner with FDIC-insured banks.* ## Daily sweep accounts Set up a sweep money market account. Recommendation is to keep 3-6 months of liquidity needs among operating and sweep accounts. Money market accounts are most commonly structured one of two ways: 1. Accounts with nightly sweep features across a network of other banks, which provide higher FDIC insurance coverage than the standard $250,000 per bank per depositor limit. 2. Accounts that stay on the bank's balance sheet, which count towards the same $250,000 FDIC insurance limit in combination with your checking account. **Example:** | ㅤ | “On Balance Sheet” Money Market | FDIC Insurance Coverage | “Sweep Account” (with four 3rd-party banks, for example) | FDIC Insurance Coverage | | ------------ | ------------------------------- | ----------------------- | -------------------------------------------------------- | ------------------------- | | Checking | $500,000 | ㅤ | $500,000 | $250,000 | | Money Market | $1,500,000 | ㅤ | $1,500,000 | $1,000,000 ($250,000 x 4) | | Total | $2,000,000 | $250,000 | $2,000,000 | $1,250,000 | If you’re setting up multiple sweep accounts with different institutions, pay attention to the network of banks they use. FDIC insurance limit applies to per bank per depositor (identified by the same EIN). If you have material excess cash (for example, >$10M outside of operating and sweep accounts), open a managed securities account (see below). ## Professionally managed securities account *Applicable to companies who have raised external funding. Generally not applicable to pre-Seed companies.* Appoint an asset management team (or corporate cash management) to manage a portfolio of very short-term, highly liquid, US government securities. These types of accounts require a management fee. Simliar to a brokerage account, the securities are held at a custodian (a third-party institution in your company’s name), not the bank’s name. Focus the policy on capital preservation and liquidity, not higher yields that are more risky and can jeopardize the business. The Board of Directors need to approve a treasury mandate under which the funds are managed. ## Signatories Each account should have more than one signatory on file who can act and sign on behalf of the company. OCV will be a primary account holder in addition to Company Executives for pre-Seed companies. Once a company raises an external round, signatories will be updated to Company executives only. Make sure there are multiple signatories for each account and set up approval rights appropriately. ## Wire approvals and controls All wire transfers out require at least one level of approval by a Company representative. Typically, the [Accounting and Finance Team](/company-ops/finance-ops/finance-ops-systems-overview) initiates the wire transfer and management approves. Consider setting up two approvers for wire amounts above a certain limit. # Company Expenses Company expenses are paid either by the EOR, a corporate credit card or through the Accounting and Finance Team. 1. **Employer of Record (EOR):** Payroll and some one-off reimbursements. 2. **Individual Corporate Credit Card Expenses:** Ad hoc individual business-related expenses like paying for a promotional article, business travel, or work accessories. 3. **Corporate Accounting Credit Card Expenses:** Software subscriptions used by the majority of the business. 4. **Paid via the Accounting and Finance Team:** Vendor invoices and ad hoc expenses that are more 1,000 USD. ## Expense policies Founders should also work with the Accounting & Finance Team to establish specific employee expense reimbursement policies, including what expenses will be reimbursed by the company and whether to issue team members an individual corporate credit card. All expenses must be approved by the founder before payment is completed. Expenses should have a receipt/invoice attached, include a description, and go through Accounting & Finance Team's vetting. In the case a founder is not available, OCV Finance team will approve outgoing payments. ## Corporate credit card usage Every company has two types of corporate credit cards: Accounting Card and Individual Employee Cards. ### Accounting credit card The Accounting Card is used for the company's general business needs. Examples include monthly subscriptions to workplace tools, one-time fees, and any business-related activities for one individual (purchasing a computer). Use the Accounting card when an invoice is not available. Using the Accounting Card instead of personal credit cards for company-wide subscriptions ensures business continuity. If a team member leaves the company, the team wouldn’t need to remember all the accounts tied to their individual credit card and request updates. All transactions on the Accounting Card are reviewed by the Accounting & Finance Team. ### Individual employee credit card Founder(s) and (interim) CEOs are issued a business credit card for individual business use. Typical expense items include but not limited to business travels, meals with clients, individual workplace subscriptions, and other business needs. All card holders are required to submit notes and receipts for all credit card transactions. This is an IRS requirement. ## Payroll processing The Accounting and Finance Team manages payment processing through the EOR. Payment is processed on a semi-monthly (cadence may vary by country), but invoices the company once a month. For cash flow planning, founders may need to be aware that the current cash on hand (bank account balance) may not reflect the latest payroll draw due to a timing difference of the EOR invoice. Once the EOR invoices the company, payroll payment is processed by the Accounting & Finance Team. It's important to note that payroll must comply with various laws and regulations, including wage and hour laws and tax laws. Failure to comply with these laws can result in penalties. ## Reimbursements Founders and employees can submit reimbursement requests directly through the EOR platform. These requests will be reviewed and approved by the Accounting and Finance Team and are included in the next payroll cycle. Notify the Accounting team of one-off reimbursement requests. They may recommend either using the EOR platform or another expense management platform.\ \ Contractors may submit reimbursement requests via invoices or the COR platform. ### Founder reimbursement prior to an active bank account OCV sets up each company's bank account and credit card within a week of funding. This ensures immediate access to a company expense account for necessary systems and other business expenses. Sometimes, founders may need to purchase equipment or initiate essential services before funding and account activation. In such cases, founders must pay for these items personally and submit reimbursement requests to the Accounting and Finance Team. ## Expense allocation OCV manages expenses for many entities. These include OCV (under the Management Company), OCV funds, and OCV companies (typically during the formation phase only). As a default practice, we ask our vendors to bill the appropriate entity for which services/goods were rendered. ## Company pre-launch expenses OCV has a designated payment method for standard pre-launch systems. These systems and accounts are expected to transfer to the company's own business credit card upon activation. As a general practice, OCV would minimize expenses incurred on behalf on the company during the formation phase. For each company, OCV would not seek reimbursements for total expenses below $500. Once total expenses exceed $500 (potentially driven by domain purchases), OCV would invoice the company for all direct expenses incurred. When founding team members need to purchase equipment or services before their company's financial systems are set up, the preferred method is to pay for these personally and later submit expense reimbursements to their company's accounting team. ## Reimbursements across entities Occasionally, OCV may need to cover payments on behalf of another entity. These payments are recorded as receivables on OCV’s balance sheet. Once the entity can process invoices, OCV will request reimbursement at actual cost by submitting receipts to the entity's accounting department. Table below highlights typical expense categories by entity type. | Operating costs (i.e. payroll for OCV team, systems, etc.) | Deal-specific expenses (primarily legal, travel, etc.) | Company operating costs (payroll, fixed assets, systems subscriptions, etc.) | | -------------------------------------------------------------------------------------------------- | ------------------------------------------------------ | ---------------------------------------------------------------------------- | | Content production for OCV blog posts including new company launch announcements | Fund admin fees | Company-specific legal fees (including entity formation) | | OCV-specific legal & accounting needs and non-company specific work that benefit all OCV companies | Tax services for funds (GP and LP entities) | Outsourced HR & recruiting services | | Catalyst program sponsorship payments | ㅤ | Marketing (including contract content writers, etc.) | | ㅤ | ㅤ | Outsourced accounting & tax services | | ㅤ | ㅤ | Corporate taxes and statutory filings | ## Workspace and office leasing Founders may decide that an external workspace—whether a co-working facility or an office—would be advantageous for productivity and collaboration with co-located team members. If founders wish to rent office space, OCV advises them to discuss budgetary and tax implications with the finance team before making any leasing commitments.\ \ Out-of-US founders will need to pay leasing bills directly and then submit expenses through the company's payroll platform for reimbursement.Donations & Sponsorships Prior to the launch of an OCV company, the open source project may have been supported by public donations and/or other sponsorships. ## Donations <a href="#block-85e06f5f37774c57a2cf796002995d39" id="block-85e06f5f37774c57a2cf796002995d39"></a> Prior to the launch of an OCV company, the open source project may have been supported by public donations and/or other sponsorships. If there isn’t an existing non-profit organization (unaffiliated with the commercial entity) managing the open source project and donations, general guideline is for OCV companies and employees not to accept public donations. ## Sponsoring the OS and/or a related foundation <a href="#block-6c926032d5c44c4a8b1aa562edab78d2" id="block-6c926032d5c44c4a8b1aa562edab78d2"></a> If there are unaffiliated non-profit organizations supporting and promoting the open source project, the Management Team may consider making a monetary contribution. Amount and frequency consideration should include the company’s cash runway. ## Guardrails on unusual activity The Accounting & Finance team will regularly review for any unusual expenses or activity. Irregular activities will require submitting a receipt and the Accounting & Finance team may request for additional information.\ \ Invoices going to new vendors will require due diligence before processing, ideally a W-9 is provided. ## Investigating financial fraud In the event of a fraudulent purchasing card, ACH, or wire transaction, contact the company’s financial institution provider and ask them: 1. What user account changed the "account"? From which IP address? 2. What user account made the payment? From which IP address? 3. Is there a way we can lock what vendors we can send ACH payments to? On the credit side, companies could implement credit card masking tools or use an enterprise password manager to generate new virtual cards every time a purchase is made on top of using vendor cards with approval limits. # Invoice & Payment Processing All invoices should be sent to the company’s accounting email (accounting\@...). The Accounting and Finance Teams use an Accounts Payable system to record and pay vendor bills electronically. {% hint style="info" %} #### Vendor tax forms When engaging with a service provider, please ask the new vendor to provide one of the following forms that Accounting needs to collect before processing any payment. **US-based vendors** US-based vendors are required to provide a completed[ W-9 Form](https://www.irs.gov/pub/irs-pdf/fw9.pdf) prior processing their first invoice and upload a copy in e-payment system under the Document section. This form can be downloaded from the IRS website. *If the vendor is unable to upload their W-9, please email the form to our accounting email alias.* **Non-US vendors** Non-US based vendors are required to provide a completed[ W-8BEN-E Form](https://www.irs.gov/pub/irs-pdf/fw8bene.pdf) prior to or at the time they submit their 1st invoice and upload a copy of[ ](https://www.irs.gov/pub/irs-pdf/fw8ben.pdf)in e-payment system under the Document section. This form can be downloaded from the IRS website. Here are the[ instructions](https://www.irs.gov/instructions/iw8bene) for Form W-8BEN-E Form. *If the vendor is unable to upload their W-8BEN-E, please email the form to your company’s accounting email alias.* {% endhint %} ### Vendor Onboarding Vendors will need to be onboarded into the AP system to process invoices. Founders have the option to onboard the vendor directly or send an email to "Accounting@" to have the vendor set up on their behalf. The following information is needed: * Vendor name, physical address, and email * Type of service or product the vendor provides (to correctly categorize the expense) * An email to send the AP platform invite so the vendor can enter banking and W-9 tax information (for US vendors only) * For foreign vendors requiring payment in a foreign currency, a completed W-8BEN, along with a request to Accounting to set up the correct payment currency and banking details **Note:** If the founder is engaging a contractor or service provider, please ask the vendor to submit a monthly invoice by the end of the month, and no later than the **3rd of the following month**, so the expense can be recorded accurately and on time. ### Vendor Bill Payment Process The company's standard payment term is "net 30"; bills are paid 30 days from the invoice date. Due to AP review and control processes, it takes a **minimum of 3 to 5 business days** for a vendor bill to be processed for payment in the AP system, and an **additional 2 to 3 days for the payment to settle** in the vendor's bank account. For this reason, it's critical that the founder forward vendor bills to Accounting as soon as they're received. Approval can be held in the system if needed. 1. Email the vendor bill to Accounting as soon as it's received. Please do not submit vendor bills or payment instructions through any other channel. 2. **Accounting processes bills on a weekly basis (Tuesday or Thursday),** sets up the payment date, and routes the bill to the founder for approval. 3. The AP system will prompt the founder for review and approval — please log in to the AP system to approve. 4. The AP system will auto-pay the bill on the scheduled date. Payments typically arrive in the recipient's US account within 2–3 business days via ACH. For foreign vendor payments, a wire will be initiated from SVB (USD) or Brex (foreign currency). If a vendor bill needs to be paid urgently, please forward the email to Accounting and also post an alert in the Accounting Slack channel so a member of the Accounting team can respond within a few hours. ## Customer invoicing and payments It is recommended to loop in the Accounting and Finance Team as early as possible when considering launching paid features. The company’s controllers should have access to the company’s [payment processor](https://handbook.opencoreventures.com/company-ops/business-systems#stripe) account which will enable them to add necessary integrations and coordinate on setup. There is a significant amount of lead time that will likely be dedicated to development in integration of payments and some of the associated setup processes for different companies. Registration for VAT may take a significant amount of time while US sales tax registration is comparatively quicker (if required). ### Setting up sales taxes/VAT <a href="#block-6cbc2bc2f04f4f73ae97baf2add5b7d2" id="block-6cbc2bc2f04f4f73ae97baf2add5b7d2"></a> It is important to configure the payment processor to appropriately target sales taxes and VAT for the type of customer and location that each company is targeting. The payment processor will help manage this when marked appropriately. Part of appropriately designating purchases includes if the type of transaction is B2B or B2C. The payment processor offers specific Tax Set up for VAT taxes, United States Taxes as well as other Countries taxes to be added to each transaction when invoicing. Once you receive your Tax Registration you can add the registration in ‘Tax Settings’. The ‘Tax Settings’ is also where the payment processor monitors the thresholds for charging VAT, Sales Tax and other taxes. When setting up customers it is critical to obtain their location (address) and ensure it is entered correctly. This allows the Monitoring of Tax Thresholds to work and inform users of the data correctly. It is important that companies create a separate line in payments to differentiate charges associated with the products and services they provide and the taxes associated with them. ### Testing and launching payment processor <a href="#block-6d55fd9b2f25412eb0aa2562397e726f" id="block-6d55fd9b2f25412eb0aa2562397e726f"></a> Before you launch your payment processing system, it's important to test it thoroughly. You can do this by using the payment processor's test mode to simulate transactions and ensure that everything is working correctly. Once you are satisfied with your payment processing system, you can launch it on your website and start accepting payments from customers. ## Foreign exchange During the pre-Seed stage, OCV companies are expected to operate predominately in USD. The companies are funded in USD, customer contracts are expected to be denominated in USD, expenses are incurred in USD. If the company has team members outside of the U.S., the EOR platform manages foreign currency exchange and charges the company in USD at the prevailing market exchange rate. In this respect, the company takes on foreign exchange rate risk when hiring outside of the U.S. If and when a company expects large (6-7 figures) customer contracts and/or expenses in foreign currency, contact the Accounting and Finance Team to evaluate foreign currency management options. # Equity Ops ## Founder share purchase Technical founders (CTOs) who are hired before the company is incorporated are offered common shares. We recommend purchasing common shares for a nominal amount instead of receiving options. However, this is dependent on each founder’s personal tax situation. When a company issues common stock, it sells ownership stakes in the company differently than it would to investors. The price of purchasing common stock is nominal for the company’s founders but may change over time with employees (see [409A Valuation](https://handbook.opencoreventures.com/company-ops/finance-ops/equity-ops-reporting/409a-valuation)). Please consult with tax advisors. It is strongly advised for founders to seek tax counsel from professionals who are experts in working with founder equity in venture-backed startups. ## Founder equity guidelines <a href="#block-6fc236889a8940a098c4509a22714f35" id="block-6fc236889a8940a098c4509a22714f35"></a> Standard vesting period for founders at company incorporation: Four years (48 months), six-month cliff, double-trigger acceleration. ### CTO Founder Equity Minimum of 10% (Y Combinator Founder Norm) Additional equity may be allocated as follows: 1. Contributor to the project: + 5% 2. Original author of the project: + 5% 3. First C-level hire at the company with management and entrepreneurial experience: +5% A maximum of 25%, otherwise we can't make our model work. There may be cases where OCV launches a company and starts to assemble a team before a CTO candidate accepts the indicative offer. If the CTO role remains open and the candidate accepts and joins the company: 1. Within 6 months of company launch: original equity offer stands 2. After 6 months of company launch: new equity offer will be equal to the original offer less 5%. ### CEO Founder Equity Our standard model is to launch a company with a technical co-founder first and recruit a CEO shortly thereafter. CEOs recruited after the company's launch will receive stock options from the company’s options pool. Under special circumstances, we would consider launching with only a CEO or both CEO and a CTO together. Guidelines for CEO equity at launch would be similar to the CTO at launch. ### Founding Engineer In certain situations, OCV may start companies with a founding engineer instead of a CTO. In cases where we recruit a Founding Engineer from outside of the community, but someone with the potential to take on the CTO role at a future date, the standard equity package is 2.5%. If and when the Founding Engineer takes on the CTO role during the pre-Seed stage, the equity package will be reevaluated with a maximum total offer of 15% (inclusive of the initial 2.5%). Note: this role is not the same as the first engineering hire (someone who is not anticipated to take on the CTO role at a later date). Equity offers for first engineers follow the same process as Equity grant considerations. ## Stock options {% hint style="info" %} **Equity 101** Common shares are usually reserved for founders, employees, and other stakeholders. Options give the holder the right to buy common stock at a specified price for a certain period of time and may be used as a form of compensation for employees and advisors. Though options are a right to buy common stock, they are not the same as actual shares of stock. {% endhint %} Stock options are a form of equity compensation in which an employee is granted the right to purchase a certain number of shares in the company at a predetermined price (i.e. strike price). These options usually vest over time, meaning that the employee can only exercise their right to purchase the shares after a certain period of time has passed. Stock options are issued in two ways: 1. **Incentive Stock Options (ISOs):** Tax-advantaged (no immediate tax at exercise, capital gains later) rights to buy shares generally reserved for employees. 2. **Non-Qualified Stock Options (NSOs):** Rights to buy shares granted to non-U.S. employees and are taxed as ordinary income upon exercise. Though options are a right to buy company stock, they are not the same as actual shares of stock. ## Strike price All option grants come with a strike price or exercise price based on the fair market value of the company’s common stock on the date of the grant. In private companies, the strike price or fair market value (FMV), is determined by the company’s board of directors, often based on a third-party valuation report known as a [409A valuation](https://handbook.opencoreventures.com/finance-operations-for-ocv-companies/409a-valuation/). It is important to issue options at the prevailing fair market value to avoid negative tax consequences for the employees. The strike price represents the price or an amount the employees need to pay in order to exercise their options. For example, if an employee has 100 vested options with a strike price of $1.00/share, they would need to pay the company $100 in order to convert their options into common shares in the business. ## Vesting Standard time-based vesting schedule for employees is four years with a one year cliff. Founders will vest over a four-year period with a six month cliff. {% hint style="info" %} ### Vesting types **Time-based vesting**\ Equity granted will vest over time to ensure that employees and founders who leave the company early do not receive the entire equity amount associated with the total issued. Vesting schedules often include a cliff which is a required minimum amount of time for vesting. **Performance-based vesting**\ Performance-based vesting ties equity grants to the achievement of specific goals or milestones, rather than the passage of time. While this can motivate employees to hit key targets, it is more complex to design, administer, and evaluate than time-based vesting, requiring significantly more resources to set criteria, measure progress, and ensure compliance with accounting and tax regulations. \ \ Performance-based vesting is generally more appropriate for the executive team than the entire company. It is not recommended for employees. {% endhint %} **Time-based vesting example** An employee has been granted 1% of the fully diluted equity of the company as options with a four year vesting period and a one year cliff. If their employment comes to an end at 6 months time, that employee would not have vested 1/8th of the total amount of options granted because they would not have reached the cliff of 1 year (which would mean a minimum of 1/4 of the options vests). This employee would vest 3/4 of their options at their third year of employment and be fully vested at their fourth year of employment. ## Accelerated vesting OCV companies’ standard stock plans do not allow for accelerated vesting for employees. Double-trigger acceleration is an option for new founder shares issued to CEOs and CTOs only. Standard industry terms for double-trigger acceleration are included in [founder offer letters](https://handbook.opencoreventures.com/company-formation/founder-offer-letter-indicative/) and OCV does not expect to negotiate these on an individual basis. The Board must approve any vesting acceleration. {% hint style="info" %} ### **Types of acceleration schemes for Executive hires** 1. **Double-trigger acceleration:** All or a portion of unvested shares accelerate in the event of (i) change of control (M\&A scenario) and (ii) termination without cause or resignation for good reason (i.e. the executive is laid off without cause or if they resign because of material reduction in salary, relocation of office, etc.). This means that the executive’s unvested shares accelerate in full when both (i) and (ii) occur, usually within 12 months. This is common and of no harm to the company. 2. **Single-trigger acceleration upon a change of control:** Executive’s unvested shares accelerate in the event of a change of control. This is not commonly seen in offer letters and may raise concerns in future rounds. 3. **Single-trigger acceleration for termination/resignation:** Executive’s unvested shares accelerate in the event they are terminated without cause or resign for good reason. This is akin to a severance-type arrangement, where if the executive’s service terminates, they get a portion of their unvested shares accelerated. This is also uncommon in offer letters, and not recommended unless there’s a compelling reason to do so. {% endhint %} At the advice of counsel, OCV companies will not consider accelerated vesting requests for non-founder shares during the pre-Seed stage as these may jeopardize an M\&A transaction. Standard industry practice is for the board to decide for all employees at the time of a sale (i.e. cancel, substitute, accelerate, etc.). This change does not affect previously issued founder shares. Founders joined prior to May 2025 may revisit double-trigger acceleration at the Seed round. When early stage companies allow for this type of acceleration, it is normally 3-6 months of vesting acceleration at most. Vesting should not accelerate in an IPO. Shares would continue to vest as they did prior to public filing. ## Exercise of vested options After the first anniversary (i.e. 1-year cliff), option holders may receive a notification from the [CapTable Management Platform](https://handbook.opencoreventures.com/company-ops/business-systems#carta) to exercise their vested options. Employees are free to exercise their vested options at any time, unless the company is actively engaged in a financing round. In which case, we encourage employees to wait until after the round closes and the new [409A valuation](#id-409a-valuation) report (establishes the latest fair market value) is available to exercise their options. The decision to exercise or not depends on an individual’s personal tax situation and planning. Best practice is for employees to speak with their own tax advisor to understand the tax impact before electing to exercise vested options. Additionally, OCV looks to each company to set their own policies around employee option exercises. ## Early exercise {% hint style="info" %} Early exercise gives employees the option to purchase shares of company stock at the exercise price, which is typically set at the fair market value of the stock at the time the option is granted. However, because the company is private and the stock is not publicly traded, the employee cannot sell the shares on the open market to realize their value. {% endhint %} OCV companies’ standard stock plans allow for early exercise subject to Board approval. Early exercise requests are evaluated on a case by case basis (depending on local regulations and expenses considerations, etc.). The Board will only approve early exercise for options issued to founders (typically CEO and CTOs) at pre-Seed due to stock plan administration costs and materiality and risk profile. Please discuss with The Legal Team on appropriate steps. The Legal Team prefers to run early exercises directly (i.e. not in the CapTable Management Platform). Early exercise should be accompanied by an individual’s [83b election](https://handbook.opencoreventures.com/company-formation/step-4-issue-equity-to-founders-and-advisors/#a32446b549b4440abfcc3382f8a66b62). Early exercise can have tax implications for employees. By exercising early, employees may be able to minimize their tax liability by initiating the capital gains holding period sooner. However, they may also incur tax liabilities associated with the spread between the exercise price and the fair market value of the stock at the time of exercise. ## Option grants & capitalization table management Capitalization tables are managed by the Legal Team. ### New grants OCV recommends a quarterly or semi annual batched process to minimize legal costs and administrative time spent on option grants. To issue new grants, Founders need to compile new hire offer letters and required information listed this tracker ([\[Company\], Q\[X\] - Options Grants](https://docs.google.com/spreadsheets/d/1kn-DwsvD7rvNkU7QTabz5O6RK5nHxZEB3aYOfNbMOjA/edit#gid=0) ), and provide these to the Legal Team quarterly or semi-annually. From the company’s EOR, Founders should be able to locate employee titles, email addresses, classification, and confirm employee start dates (and end dates where applicable). Equity amounts, vesting schedules, and a sign off date from the board can be found in the company’s ATS and human resources documentation. It is the company management’s responsibility to review and confirm new hire start date, which is the vesting start date. ### Employee terminations and departures As part of an employee’s offboarding process, Founders need to notify the legal team the last day of employment to properly account for options vesting. This should be done as soon as possible instead of a batched process. ### Option grant agreement forms The Legal Team provides and drafts option grant agreement forms. Following the approval by the company’s Board of options grants agreements, they will be released into the company’s capitalization management tool. Locally compliant option grant templates are available for the following countries: {% columns %} {% column %} Argentina Australia Brazil Canada Colombia Czech Republic {% endcolumn %} {% column %} Denmark Germany India Ireland Italy Japan {% endcolumn %} {% column %} Mexico Netherlands New Zealand Portugal Sinapore South Korea {% endcolumn %} {% column %} Spain UAE Ukraine United States {% endcolumn %} {% endcolumns %} Template language is preferred in most non-US countries where applicable and the above list of templates will be confirmed and updated prior to new options issuance. Template language is periodically reviewed by local counsel, but because our US-based Legal Team is not licensed in all relevant jurisdiction(s), they cannot guarantee that those templates satisfy all the requirements of the relevant jurisdiction(s), which may pose some enforceability, tax, or other risks to the company. A disclaimer will accompany such templates, reflecting those limitations. For other countries where the Legal Team is not licensed, local counsel licensed in those relevant jurisdiction(s) will prepare options grants and provide legal advice specific to the proposed options. Engaging with local council will provide companies with as much assurance as possible that the grants intended for issuance are enforceable, have no unforeseen tax or other consequences for the recipients, and satisfy the relevant requirements in those jurisdictions. The legal team will assist with engaging local counsel for that purpose and with negotiating the fees associated with their review. Local counsel review for option grants will cost between $3,000 to $5,000 per instance. ## Refresh grants The main purpose of refresh grants is to ensure that employees have ongoing incentives to stay with the company and help it grow. As the initial grants vest or expire, employees may lose some of their motivation and ownership in the company. Refresh grants help mitigate this by providing a new set of equity awards. {% hint style="info" %} **Refresh grants** typically refer to the practice of issuing additional stock options or equity awards to employees or team members over time. These grants are meant to "refresh" or replenish the equity incentives that employees receive after their initial grants have vested or expired. Refresh grants are a common tool used by startups to retain and motivate employees, especially in competitive job markets where attracting and retaining top talent is crucial. {% endhint %} As a default, the initial options pool established at an OCV company launch do not include refresh grant allocations. Most new hire grants would not have surpassed 50% vesting prior to Seed round because the timeline from founding to Seed round is typically <18 months. Founders should consider employee retention and refresh grant allocation in determining options pool size as part of the Seed (and any future financing) round. ### Post-external funding refresh grants Include refresh grant allocation in options pool proposal as part of the upcoming financing round (this is your budget in building out the refresh equity program). Create standard guidelines for administering refresh grants that meet the company’s goals and objectives. Refresh grants are also subject to a standard vesting schedule. The timing and criteria for refresh grants can vary widely from one startup to another. They are typically based on factors such as, 1. Performance 2. Tenure 3. Company valuation or funding rounds For example, a refresh grant might be issued every year or two to employees who have performed well and are seen as key contributors to the company's success. ## 409A Valuation A 409A valuation is used to determine the fair market value of a private company's common stock, often for the purpose of setting the strike price for employee stock option grants. A proper 409A valuation by a professional (individual practitioner or firm) provides [safe harbor](https://help.pulley.com/en/articles/4781717-what-qualifies-my-409a-valuation-for-safe-harbor) for the company under IRS tax code section 409A, which regulates the taxation of non-qualified deferred compensation plans. 409A valuations are important because they ensure that the strike price for stock options is not set below their fair market value. If the strike price is deemed below fair market value, employees and companies may face negative tax consequences, including penalties. ### 409A Valuation & Process The valuation process takes into account a variety of factors, including the company’s stage, financial performance, industry trends, comparable transactions, and the rights and preferences of different classes stock. The third-party, independent, valuation team often derive an overall company value based on market and company-specific inputs, then allocate that total value to a common per share value conclusion. For early stage, pre-revenue companies, the latest round of financing is often considered the best indication of value. Note: VC investors (who generally receive preferred stock instead of common stock) often pay a higher price per share than the 409A determined value. ### 409A Valuation cadence **409A valuations need to be refreshed at least once a year, when the first full time employee is hired,** or when there are significant changes that impact the value of the business. For early stage companies, receiving new terms / closing a new financing round would trigger a 409A update. OCV companies usually have a board approved FMV at 2x par value as of the first employee hire by the company. The company will perform a 409A valuation immediately before the first employee hire, as an active 409A valuation is required to issue any employee grants. **Valuation provider** OCV companies’ [CapTable management platform](https://handbook.opencoreventures.com/company-ops/business-systems#carta) provides 409A valuation services as part of their annual subscription. ## Request a 409A valuation report 1. Log into the company’s [CapTable Management System](https://handbook.opencoreventures.com/company-ops/business-systems#carta) 2. Find “Compliance & Tax” in the navigation bar and select “409A valuations” 3. Find the appropriate launch button to get started and follow input screens instructions to provide requested data 1. 409A Questionnaire (to be added to handbook) 1. Industry: General SaaS 2. Company Description: Use Investment Memo Description 3. Date to be valued - use current date (valuation date should always be kept as current as possible, as it is not related to the vesting start date but to the board consent date). 4. Not currently raising a financial round. 5. Did not buy or sell stock in between these dates. 6. Revenue below $250,000 (double check income statements for period) 7. No financial forecasts available. 8. Confirm SAFE amount looks correct; no unsecured debt. 9. Valuation Date (in the event no financing event has happened) 10. Suggest to use last day of the prior month, share total cash balance when prompted. 11. Fundraising date - use the date that all the cash from the round has been completed 12. Recent common stock transactions 13. Purpose of this is just to account for material secondary transactions that might influence valuation of the company 14. Repurchase stock from CEO does not count as recent stock transaction 4. Typical turnaround time for a draft valuation report is 1 week. Once draft is available, Management team will review/accept the report. 409A value for pre-seed companies is expected to be negligible as they significant uncertainty and funding risk. 5. Management should go through platform's native board consent process to approve the 409A. Notify the legal team once the 409A valuation is complete in case reports need to be made to a particular state. It is also part of the routine [board consent process](https://handbook.opencoreventures.com/board-of-directors-and-board-approval/#debb3d4f659c4d43ae0509739dd23cc7) for new option grants and should be added to the board consent of the first equity issuance of the company. Generally speaking, the company value estimate from 409A's would differ from pre-money valuations used in the context of startup financing. ## Qualified Small Business Stock (QSBS) Qualified Small Business Stock (QSBS), defined under Section 1202 of the U.S. Internal Revenue Code, is stock issued by eligible small businesses that provides significant tax benefits to investors. Qualified stockholders can exclude up to 100% of capital gains from federal taxes when selling their shares, provided they meet certain conditions. Maintaining detailed records of QSBS status is essential to ensure compliance and maximize tax benefits when a material event occurs. QSBS compliance matters to all stockholders, including founders, because: * **Tax Savings on Capital Gains:** Founders holding significant equity may exclude up to 100% of capital gains from federal taxes upon a liquidity event, subject to caps under Section 1202. * **Increased Attractiveness to Investors:** QSBS compliance makes the company more appealing to current and future investors due to potential tax advantages. * **Encourages Long-Term Growth:** The five-year holding period requirement aligns all stakeholders toward long-term success rather than short-term gains. ## QSBS Criteria <a href="#block-182feb7b074d80958404eeafd5f39acf" id="block-182feb7b074d80958404eeafd5f39acf"></a> For a company to be considered QSB, the company must be a U.S. C corporation, engage in a "qualified trade or business" and have aggregate gross assets of less than $50,000,000. Additionally, a QSB must use at least 80% of its assets to conduct one or more "qualified trade or business" activities. The holder must hold the QSBS for more than five years at the time of sale. ### Disqualifying redemption If the company conducts a disqualifying redemption from investors or any stockholders, the company may lose QSB status for up to 2 years. A disqualifying redemption happens when a company buys back its own stock in a manner that violates QSBS rules. This can disqualify the stock from QSBS tax benefits. Redemptions become disqualifying when they occur within 1 year before or after the stock is issued and exceed 5% of the company's total stock value.Repurchase of shares related to employee termination is not a QSBS disqualifying redemption. #### Documenting QSBS status for post-Seed Companies <a href="#block-17dfeb7b074d8011bd6fe13c5e22af59" id="block-17dfeb7b074d8011bd6fe13c5e22af59"></a> OCV retains the right to request information periodically to document QSBS status for companies it has helped to launch through Series A raises. OCV does not produce any formal memo or evaluation of QSBS status with this information and only requires updated documentation to be supplied at the time of any material events that might impact QSBS (i.e. any new funding rounds). Companies who are fundraising or post-seed may consider using Carta’s service to monitor and create attestation documentation to provide investors (including OCV) for this purpose. ### Investor right to information Under the covenant agreement outlined in investment terms, post-seed companies are required to provide ongoing information to document status with QSBS provisions. This right may appear differently depending on the term sheet format signed. For example: 1. **Specific QSBS Provisions:** Some term sheets may explicitly outline provisions requiring commercially reasonable efforts to maintain QSBS status and periodic reporting obligations. 2. **General Investor Rights:** In other cases, term sheets may include broader provisions granting major investors (e.g., those who meet a specified investment threshold) general information rights, inspection rights, first refusal rights, co-sale rights, and pre-emptive rights. These rights may implicitly or explicitly include the ability to request information related to QSBS compliance. Regardless of the language, the right to request information ensures that transparency is maintained and compliance with QSBS regulations is documented effectively. The specific provisions governing these rights should be reviewed in your company’s signed term sheet and investment agreements. ## QSBS Attestation OCV portfolio companies are eligible for a discounted rate on Carta’s QSBS (Qualified Small Business Stock) subscription add-on (renewed annually). We recommend this service for companies that are fundraising or post-seed stage. The QSBS add-on helps ensure your company and its investors can fully leverage potential tax exemptions under Section 1202. It reduces administrative burden by handling ongoing QSBS eligibility tracking and produces formal attestation documentation that can be shared with investors during diligence, secondary transactions, or an eventual exit. This adds legal clarity and strengthens credibility with stakeholders without requiring extra lift from the founding team. # Taxes Engage a tax advisor to ensure state and Federal tax compliance. **Non-U.S. Operations: Permanent Establishment** A permanent establishment (PE) is a fixed place of business that generally gives rise to income or value-added tax liability in a particular jurisdiction.For a Delaware C-Corp, if key management teams and/or other key operations are located outside of the U.S., it may trigger tax reporting requirements in local countries (specific threshold / evaluation criteria depends on the local jurisdiction).Discuss with your tax advisor on international tax law compliance and risk assessment. **Value Added Tax** VAT in UK and EU: Consumption Tax that is applied to all digital/physical goods and services. SaaS companies are to Charge VAT and are categorized as a TBE service according to the EU VAT and UK VAT categories.To be in compliance with VAT the company needs to do the following items: * Register your Business in EU (When selling to customers or business in EU) * Verify your Customers (Obtain their VAT #, Billing Address, Customer Bank Location, Country of Credit Card, IP Address location of the Buyers Device if applicable etc.) * Know when to Charge VAT – SaaS based companies always charge VAT when engaging in a B2C SaaS sale * Retain Invoices * Submit VAT Returns Knowing when to Register: When using an invoicing platform, they do have monitoring mechanism to track sales if location of customers are correctly entered and maintained. Once the business is approaching a threshold a notification/warning is sent to the users. Note, even if you are NOT an EU based business, with a US or other location you may still be responsible for collecting VAT and remitting VAT returns.Below are some high-level guidelines specifically for UK and EU VAT. * IF you are an EU Business (Company is based in EU Country) selling only to customers/business in your home country register with the local tax authorities for a VAT registration. * IF you are a non-EU Business selling to customers/business in one ore more EU countries register for a VAT MOSS (Mini One-Stop Shop) in the EU Country of your choice. They all work together for VAT applications. * \*NOTE: the UK VAT registration is separate from the EU VAT Registration. If you do business with customers/business in the UK, a separate registration and VAT return must be filed When selling to customers/business request their VAT registration so you know and have proof that you know when and when not to charge VAT. For B2B sales you do not charge, for B2C sales you do charge. You can validate the VAT Registration portal on the VIES portal.[Vies on-the-Web - European Commission (europa.eu)](https://ec.europa.eu/taxation_customs/vies/#/vat-validation) **Sales Tax** Sales Tax in the United States and Canada is specific to each State/Province. Other Countries, such as South Africa, Australia, New Zealand etc. are at a country level. Each State/Province/Country has their own regulations, thresholds, and taxable items. Specifically for SaaS based sales a number of states in the United States consider these items to be a Nontaxable item. When utilizing a payment processing platform such as Stripe, the customer location you are selling to is important to capture and track correctly (generally the address of the customer). Stripe will add the sales transaction to the state/province/country where the data noted it was being sold and begin to monitor the thresholds or note it is a nontaxable. It is vitally important that the tax settings are monitored and set up is correct either within a platform such as Stripe or manually. Once thresholds are getting close to being met, registration in each state/province/country will be required and filings of sales and use tax in each individual state will begin to be required. <details> <summary>Additional Resources<br></summary> <https://pro.bloombergtax.com/brief/permanent-establishment/> </details> **R\&D Tax Credit (U.S. Only)** The federal R\&D tax credit is a potential tax benefit for startups engaged in technical work such as software or product development. For early-stage companies with little or no taxable income, this credit can be applied to offset payroll taxes.\ \ To qualify, a company must have **US-based engineers** or contractors engaged in technical work like coding or prototyping. Eligibility also requires less than $5 million in annual revenue and fewer than five years of generating revenue. **Only work performed within the United States counts**—work done by engineers or contractors outside the U.S. is excluded, even if those individuals are U.S. citizens.\ \ If the company employs or contracts with U.S.-based technical talent and a meaningful portion of spend is domestic, they should connect with their accounting team to evaluate whether engaging an R\&D tax credit partner makes financial sense. Estimated cost per study is $3,000. At this fee range, companies with **U.S. R\&D spend greater than $100K** (i.e., at least one full-time U.S.-based engineer) are recommended to perform a study. If most engineering work is done offshore, the credit likely does not apply.\ \ Qualified R\&D expenses include: * Wages for U.S.-based W-2 engineers * 65% of costs paid to U.S.-based technical contractors * Some development-related supplies (though rare for software companies) The credit typically amounts to about 10% of eligible U.S. engineering costs. Early-stage startups that invest significantly in U.S.-based engineers or contractors may find the credit substantial enough to justify working with a tax credit partner. The maximum annual offset is $250,000 in payroll taxes.\ \ **To claim the credit, companies must** **file IRS Form 6765 with their annual tax return.** If applying the credit toward payroll taxes, IRS Form 8974 must also be filed quarterly. Most companies work with a specialized tax partner to prepare these filings. **R\&D Credit Study Process:** **In January:** Coordinate with OCV and Accounting Team to determine eligibility once previous year financial statements are finalized.\ a. US-based eligible spending on R\&D is >$100K USD in the fiscal year.\ b. Candidates will be referred by Accounting Team to third-party R\&D credit specialists and sign engagement letter. **In February:** Founders will work with Accounting Team on providing requested items to R\&D credit specialist. The research/documentation process generally takes around 2-3 weeks. The results also need to be incorporated the company's annual tax return. The Accounting Team will also provide R\&D specialist with temporary access to company payroll system to apply for the payroll tax credit. # Legal Team Page Summary: Legal ops systems, your legal partner, selecting a corporate law firm, board meeting procedures. OCV works with a single law firm on behalf of all OCV pre-Seed companies to streamline legal functions. The Legal Team is highly experienced and understands how OCV companies operate. While the team commands “big law firm” hourly rate, we have established processes, templates, internal documentation to keep billable hours reasonable for OCV companies. The Legal Team tracks [board meetings and minutes](/how-we-work/board-of-directors#board-meetings-and-minutes) and helps the company manage risks around employment issues, data privacy compliance, stock insurance, and importantly, negotiating terms for the company’s future financing rounds. ## Legal advise When a legal question comes up (especially one that is not unique to your business), we recommend checking OCV’s Handbook for guidance first. Non-scoped asks and rounds of Q\&A with Legal (especially when there is existing documentation in the Handbook) can result in a high bill the following month. We ask founders to exercise judgement and consider cost vs. risks when engaging with the Legal team directly. If additional legal review is required, scope out the need with a specific ask. For example: “Would you be able to provide high level review for this customer contract in an hour by EOD tomorrow?” If there’s significant risk with this ask, the Legal Team will flag it. ## Switching law firms <a href="#block-5c09f928951e406eb22f7b70ea813a9d" id="block-5c09f928951e406eb22f7b70ea813a9d"></a> Post-Seed companies may switch corporate forms at the recommendation of the new counsel. Founders should agree on expected costs for the change in advance. When switching law firms, the new legal counsel may ask the company to convert certain corporate documents such as the bylaw and equity incentive plan into the new firm’s standard template. The rationale for adopting the new corporate forms is to increase efficiency on future legal review since the team is already familiar with their in-house templates. Keeping the existing set of documents from the previous law firm will likely result in inefficiencies (i.e. time and costs) and unnecessary complications in the future. ## Selecting a corporate law firm <a href="#block-0fdfeb7b074d809aa0ebd2748b9d18ee" id="block-0fdfeb7b074d809aa0ebd2748b9d18ee"></a> We recommend law firms with a strong presence in Silicon Valley. These attorneys tend to be in tune with the latest venture sentiment, have seen cycles of boom and bust, and can provide insights and advice on how to navigate the current venture landscape because they have worked with hundreds, if not thousands, of startups before. Not all law firms are equipped to meet the needs of a startup, but several reputable firms offer startup programs focused on cost efficiency while having breadth (i.e. can they help you with global employment issues?) and depth (i.e. specialized patent review for your domain) to help companies scale, including supporting through an initial public offering (IPO) event and beyond. Here are some sample questions to ask when interviewing law firms from CooleyGo: “[How to Choose a Lawyer for Your Startup](https://www.cooleygo.com/choosing-a-lawyer-for-your-startup/)”. When working with attorneys (and any professionals that charge by the hour), it’s always a good idea to establish scope (in terms of estimated time required) in advance. # Legal Compliance ## Beneficial ownership information (BOI) The Financial Crimes Enforcement Network (FinCEN) requires small businesses to submit information about their Beneficial Owners (BOI). All OCV companies are subject to this requirement. OCV will complete the initial BOI submission to FinCEN during the incorporation process. The [definition of Beneficial Owner](https://arc.net/l/quote/apqtojjx) includes: 1. Any individual with more than 25% fully-diluted equity ownership, directly or indirectly, in a company. This includes OCV’s LPs when OCV owns more than 25% of a company. 2. CEOs and CTOs ***regardless of ownership percentage,*** as it covers any "control person" involved in the day-to-day operations of the company. ## BOI reporting The specific information requested includes both information about the company, its Beneficial Owners, and Company Applicants, the individuals/entities who filed the company’s initial incorporation paperwork. {% hint style="info" %} Filing information by entity **Company information** 1. Company’s full legal name 2. Current address (must be a US street address, not a PO box) 3. Jurisdiction of formation (Delaware) 4. Tax identification number (usually an EIN) **Beneficial Owner and Company Applicant information** 1. Full legal name 2. Date of birth 3. Residential address 4. Unique identifying number 5. Image of ID (US passport, state driver’s license, or other eligible identification document) {% endhint %} The filing requirements differ for companies incorporated after January 1, 2024 (”Newly registered companies”) vs. those incorporated prior to 2024 (”Existing companies”): **Newly registered companies** 1. **BOI submission deadline:** **1 month (28 days) after date of first incorporation** 2. Company Information, Beneficial Owner, and Company Applicant information all required **Existing companies** 1. **BOI submission deadline:** **Janurary 13, 2025** 2. Only Company Information and Beneficial Owner information required (Company Applicants are not required) ## Registering for a FinCEN ID As part of the reporting process, individuals can register for a FinCEN ID by submitting their documents to FinCEN directly. Individuals can register for a FinCEN ID [here](https://fincenid.fincen.gov/landing). The process should take less than 5 minutes. Please use your personal email address and not your work email. You will use the same FinCEN ID for any other companies you may be a Beneficial Owner for. OCV can then include each company’s associated FinCEN IDs with the BOI report submission, without needing to handle sensitive information/documents on behalf of LPs, CEOs, and CTOs. This is also helpful for investors who are Beneficial Owners of multiple entities. OCV will keep track of LP and founder FinCEN IDs internally. The FinCEN IDs of company applicants will be provided by the Legal Team upon incorporation. ## Updating beneficial ownership information Going forward, anyone reported as a Beneficial Owner will need to update the information on their report within **30 days** whenever it changes, and companies will also need to update company information if they change their address or otherwise undergo any changes that affect the information reported to FinCEN. This also includes any executive level new hires and any proposed equity issuances that may exceed 25% of either company’s ownership interests. In such events, please notify the company’s Legal Team so they can advise with respect to any BOI reporting obligations (as well as any corporate actions that may be necessary). Further, if there are any changes to the information that an individual submits to obtain a FinCEN ID, that change must be reported within 30 days. To make updates to a BOIR filing, go to the [BOI-E Filing](https://boiefiling.fincen.gov/boir/html) portal. Select “update prior report” to make subsequent BO updates. ## Other KYC processes In the past, financial systems vendors like credit cards and bank accounts have also asked registrants to provide similar KYC information on beneficial owners and control persons during the application process. While the use of FinCEN IDs could help streamline these KYC processes, no vendors have announced plans to support them yet. ## Vendor BOI requests OCV will release sensitive information via a direct secure link to the vendor. Please ask for a secure submission link and loop in OCV, who will forward to the respective individuals to complete. ## Trademark protection A trademark protects your brand and intellectual property so others can’t steal your company’s name and/or symbols. Companies with both a legal registed corporate name and a "doing business as" (DBA) should file for trademark protection on the customer-facing name under which you conduct business. Legal cost estimates: 1. Comprehensive Search & Filing: \~$7,500 2. Knockout Search & Filing: \~$5,000 3. Filing Only: $2,500 ## Trademark registration Work with the Legal Team to file for U.S. trademark protection when appropriate after company launch. OCV will assist with this process. Work with the Legal Team to file for EU and UK protection through the Madrid Protocol within 6 months of U.S. application date. Consider other countries if applicable. <figure><img src="https://imagedelivery.net/IEMzXmjRvW0g933AN5ejrA/wwwnotionso-image-s3-us-west-2amazonawscom-securenotion-staticcom-4b6ca1c3-f8ac-4fb2-85d9-806005e2d350-screen_shot_2023-02-09_at_95058_ampng/public" alt="notion image" height="100%"><figcaption></figcaption></figure> 1. **Entity Formation:** Preliminary knock-out search performed by Associate (Note: depending on launch date expectations, OCV team may skip an official knockout search with Legal counsel) 2. **If Deemed Necessary:** Consult OCV and the legal team regarding whether and when to file for U.S. Trademark Protection with [USPTO](https://www.uspto.gov/). The review process may take 6-9 months in total (3-6 months after confirmation of receipt from the USPTO, which can take months after application date). 3. **Six months after U.S. application date:** File for non-U.S. Trademark Protection ## Registering for trademark in EU 1. [Madrid Protocol](https://www.wipo.int/madrid/en/): covers up to 128 countries (including EU) under a single application and one set of fees. Turnaround time tends to be quicker than separate national registrations, but approval is dependent on the underlying U.S. filing for the first 5 years. For instance, if the U.S. application were to come under attack by a 3rd party or abandoned, foreign filings could be impacted. 2. Legal cost estimate for EU & UK registrations: \~$5,500 3. Separate (EU and UK) applications prepared by local counsel. Individual applications tend to take longer, but registrations are independent of U.S. filing status. 4. Legal cost estimate for EU & UK registrations: \~$10,000 assuming no major obstacles Depending on the nature and customer base of the business, companies may also consider expanding trademark protection to other regions / countries. Additional countries will incur higher legal fees than estimates above. ## Trademark registration challenges Trademark laws can be complex. What might seem superficially like distinct business names may not meet the standards for trademark registration under the USPTO’s standards. When the USPTO provisionally refuses registration of a mark (for reasons like potential confusion with another registered mark or sound a-likes, being too descriptive about what the company does, or being too broadly generic), legal resolutions may include: 1. Submitting legal arguments against the decision. Legal costs could be around $5,000 to $7,000, depending on the case. Attorneys should be able to provide an estimated probability of success. 2. Abandon the current application and either re-file for a revised set of goods and services (trademark category), or in a design format which may improve the prospects for registration. When faced with registration challenges, we recommend a quick consult with the legal team to access the probability of success regarding legal options above.In a lot of situations, the most pragmatic solution may be to abandon the current application while continuing to use the company mark and adding “TM” to assert your claims to the name. Afterwards, it may be reasonable to revisit a new application for trademark protection again following a Series Seed or A financing and once a CEO / Head of Marketing is onboard. ## Public benefit company reporting requirements At least every two years, Delaware Public Benefit Companies must provide its stockholders with a report on the company’s promotion of the public benefit specified in its corporate charter. The public benefit report should include information on: 1. Objectives established towards the promotion of the public benefit 2. Standards adopted to measure progress in those objectives 3. Information measured in alignment with those standards 4. Assessment of the company’s success in meeting objectives <br> # Data Compliance What are the different data compliance frameworks and where to get certified. Updated February 2026. ## Compliance frameworks Data compliance frameworks certify that an organization has the right structure in place to protect customer data and privacy. SOC 2 is an extremely popular form of cybersecurity audit. Enterprise buyers may require proof of security practices like SOC 2 before signing contracts, and conforming to GDPR is required for handling European customer data.\ \ **Founders are recommended to complete SOC 2 / GDPR compliance processes when they are actively engaged in enterprise sales cycles** as an enterprise customer may request an independent audit report. SOC Type I Report assesses security controls at a single point in time; founders need to set up the platform and implement framework policies ahead of the audit (timeline typically less than 3 months). Type II Report requires 3-12 months observation window to assess effectivness. GDPR is required for handling European customer data. ### Compliance Vendors Drata, Delve, and Vanta all offer similar services that monitor your data controls, map to framework requirements, and automate evidence collection for certification. They do not provide auditing services themselves but have directories for auditing firms they work with.\ \ [Drata](https://drata.com/platform/startup) and [Vanta](https://www.vanta.com/solutions/startup) both have a Compliance for Startups program. Founders should reach out to all three vendors to quote/negotiate the cost. OCV recommends Drata provided pricing matches other vendor. ### SOC 1 / SOC 2 SOC 1 Guides: 1. [Vanta Guide](https://www.vanta.com/collection/soc-2/what-is-soc-1) 2. [Drata Guide](https://drata.com/glossary/soc-1) SOC 2 Guides: 1. [Vanta Guide](https://www.vanta.com/collection/soc-2/what-is-soc-2) 2. [Drata Guide](https://drata.com/grc-central/soc-2/type-2) ### GDPR 1. [Drata Guide](https://drata.com/blog/gdpr-compliance) 2. [Vanta Guide](https://www.vanta.com/resources/the-gdpr-basics-your-business-needs-to-know) ### ISO 27001 *Not typically required at early stage of a company.* 1. [Drata Guide](https://drata.com/grc-central/iso-27001/compliance) 2. [Vanta Guide](https://www.vanta.com/resources/the-ultimate-iso-27001-guide-powered-by-vanta-and-aprio) # Business Insurance In the early days, it’s difficult for pre-seed companies to obtain the right business insurance policy without visibility to their revenue model, customer profiles, data security protocols, etc. Each company CEO will decide on the timing and coverage areas for business insurance. In general, events that will trigger business insurance policy include: 1. Signing first enterprise contract (coverage like cybersecurity may become necessary) 2. Fundraising (a due diligence item by new investors) Small businesses often benefit from a combination of the policies listed below, typically bundled with cyber insurance and subject to a limited cap. For companies ready to secure coverage, we recommend using either [Vouch](https://www.vouch.us/) or [Embroker's startup program](https://www.embroker.com/startup/). After securing external funding and gaining significant customer traction, it becomes more appropriate to tailor risk management policies to specific business needs. Open Core Ventures can introduce companies to a professional insurance broker who will help find a more customized solution. ## Recommended policies The recommended baseline policies for startups include general liability insurance, cyber liability insurance, and professional liability (E\&O) insurance. Coverage for all five insurances listed below can be in the range of $17,000 per year. Coverage for 1-3 should be less than $10,000 per year. ### General Liability Insurance General liability insurance policies protect against claims made relating to general liabilities associated with operating a business which result in damage to people or property. Recent quotes we've seen for this coverage are around $200 USD for $1M per occurrence and $2M aggregate. ### Cyber Liability Insurance Cyber liability insurance policies protect against claims made as the result of a data breach or software attack. Recent quotes we've seen for this coverage are around $2,000 USD per year for $1M aggregate.Most carriers are generally reluctant to offer limits exceeding $5M for startups due to the rising frequency and severity of cyber and ransomware incidents. If a larger cyber liability insurance limit is required for any reason (including requests by customers as part of a contract), the portfolio company should work with the insurance broker to build a cyber insurance tower. #### Cyber insurance tower A cyber insurance tower is a structured, multi-layered insurance program designed for corporations needing high liability limits to cover significant cyber risks. It combines a primary policy with several excess, or "layer," policies from different underwriters to provide comprehensive protection against breaches, ransomware, and data loss. ### Professional Errors & Omissions (E\&O) Insurance Errors & Omissions insurance policies protect against claims made relating to unsatisfactory work performed by a business. Recent quotes we've seen for this coverage are around $3,000 USD for $1M in aggregate. ## Other insurance policies ### Employment Practices Liability Insurance Employment Practices Liability insurance policies protect against claims made between managers and employees. Recent quotes we've seen for this coverage are around $7,000 USD for $1M in aggregate. ### Directors & Officers Insurance Directors & officers insurance policies protect the personal assets of founders and the startup from lawsuits associated with their decisions. Recent quotes we've seen for this coverage are around $6,000 USD for $1M in aggregate. # Name Change ### Changing the company name <a href="#block-477e71191d3e42f58f5eb59046b47ec4" id="block-477e71191d3e42f58f5eb59046b47ec4"></a> #### **DBA ("Doing Business As")** If a name change is deemed critical for GTM reasons, a DBA (”[doing business as](https://www.law.cornell.edu/wex/doing_business_as_\(dba\))”) may be considered first. A DBA will trigger additional compliance and tax complications, which should be weighed in as part of the decision process. **Filing a DBA** A DBA need to be filed where a company’s offices are located and where the company intends to do business. As a company expands where it is doing business, additional DBA registrations will need to take place in those locations as well, increasing the complexity of the process. OCV companies seeking to do business under a new name through a DBA (not a legal entity name change) will need to file Fictitious Business Name (FBN) Statements in San Francisco and in Santa Clara counties (as of January 2026, all pre-Seed OCV companies have a physical address located in Santa Clara county). {% hint style="info" %} Note: The term “Fictitious Business Name” refers to the *new* business name (DBA name), not the existing (official) business name. Keep this in mind when filling out forms to avoid any delays in filing. {% endhint %} **Legal Team** will require physical, wet-signed copies of those statements, as well as a copy of the company’s updated tax registration certificate in San Francisco, which will be mailed to the company after updating the company’s name on the San Francisco business website. Additionally, Santa Clara County requires the publication of the new business name in a local newspaper. The Legal Team will help facilitate this process (typically takes 6-7 weeks). Proof of a completed DBA filing will include: 1. Stamped copies of the San Francisco and Santa Clara Fictitious Business Name Statements 2. An updated San Francisco tax registration certificate that includes the company’s DBA name 3. Proof of publication in Santa Clara. Given the requirements for obtaining physical copies and sequential steps, the timeline for completing a DBA may take one to three months. #### **Legal Entity Name Change** In certain situations, for example, another organization holds trademark rights to your company's name, you may be required to change the corporate entity name legally. OCV (when serving as the [board of directors](https://handbook.opencoreventures.com/how-we-work/board-of-directors)) will only approve legal name change requests when deemed necessary. Below are steps required for a company name change process. **Company Name Change Legal Checklist** <table data-header-hidden><thead><tr><th width="100">Item</th><th>Requirement</th><th>Responsible Party</th></tr></thead><tbody><tr><td><ol><li><br></li></ol></td><td>Check availability of name in appropriate jurisdictions (DE and CA)</td><td><p>Legal Team </p><p>(to reserve or hold the new name)</p></td></tr><tr><td><ol start="2"><li><br></li></ol></td><td>Conduct trademark searches (and make appropriate reservations / filings) and domain name searches</td><td><p>Company </p><p>(Legal Team can assist upon request)</p></td></tr><tr><td><ol start="3"><li><br></li></ol></td><td>Draft Amendment to Charter with Name Change</td><td>Legal Team</td></tr><tr><td><ol start="4"><li><br></li></ol></td><td>Draft Board consent / obtain Board signature</td><td>Legal Team </td></tr><tr><td><ol start="5"><li><br></li></ol></td><td>Draft Stockholder consent / obtain Stockholder signature</td><td>Legal Team</td></tr><tr><td><ol start="6"><li><br></li></ol></td><td>Obtain signature and / file Amendment to Charter</td><td>Legal Team</td></tr><tr><td><ol start="7"><li><br></li></ol></td><td><p>Update qualifications as a foreign corporation (CA)</p><p>File qualifications as a foreign corporation (other states required to be qualified)</p></td><td>Legal Team</td></tr><tr><td>8.<br></td><td>Notify IRS of the name change for Federal Employer Identification purposes via <strong>Official Letter</strong> OR <strong>Tax Return method</strong> (see separate section below)</td><td>Tax Team or Company </td></tr><tr><td>9.<br></td><td>File Form DE-24 with the CA Employment Development Department informing the EDD of the name change, if applicable.</td><td>Company</td></tr><tr><td>10.<br></td><td>Make appropriate patent and trademark filings, applications, PTO updates as necessary (including foreign)</td><td><p>Company</p><p>(Legal Team can assist upon request)</p></td></tr><tr><td>11.<br></td><td>Contact any governmental agencies (federal, state or local) with which the Company has licenses / faces regulation to determine what actions need to be implemented </td><td><p>Company </p><p>(Finance Team can support)</p></td></tr><tr><td>12.<br></td><td>Contact any regulatory bodies with which the Company has relationships (e.g. FDA, ITC, OSHA, US Customs, etc.) to determine what actions need to be implemented</td><td><p>Company </p><p>(Finance Team can support)</p></td></tr><tr><td>13.<br></td><td>Obtain new business cards and letterhead</td><td>Company</td></tr><tr><td>14.<br></td><td>Notify banks, key subscribers, landlords and any other relevant third parties informing them of the name change as required by such relationships </td><td><p>Company </p><p>(Finance Team can support)</p></td></tr><tr><td>15.<br></td><td>Notify customers, partners, vendors, post office, etc.</td><td>Company</td></tr><tr><td>16.<br></td><td><p>Revise form contracts, documents and marketing materials</p><p>Including: stock option paperwork (including plan and forms), form offer letter and ECIIAA, form consulting and advisor agreements, form(s) of NDA, all other form documents</p></td><td><p>Company</p><p>(Legal Team can assist upon request)</p></td></tr><tr><td>17.<br></td><td>Contact utility and phone directory providers</td><td>Company</td></tr><tr><td>18.<br></td><td>Inform employees that, effective upon filing the Certificate of Amendment with the DE Secretary of State, all business should be conducted in the new name</td><td>Company</td></tr></tbody></table> ### IRS Notification of Name Change ***Standard Method:*** Send physical letter to the IRS via Certified Mail notifying the IRS of Name Change. IRS may take about month to respond with confirmation. Also print and include in the envelope a copy of the stamped Delaware Certificate of Amendment (provided by Legal Team).\ \ **Letter Template:**\ \ "\ <mark style="color:red;">\[Date]</mark>\ Via Certified Mail\ \ Department of the Treasury\ Internal Revenue Service\ Ogden, UT 84201-0012\ \ Re: Employer I.D. Number: <mark style="color:red;">\[Company EIN]</mark>\ <mark style="color:red;">\["New company name", Inc.]</mark> (formerly: <mark style="color:red;">\["former company name", Inc.]</mark> ) Dear Sir or Madam:\ \ This letter is to inform you that the name of the above-referenced taxpayer has been changed to <mark style="color:red;">\["New company name", Inc.]</mark> as evidenced by the enclosed filed-stamped copy of the Certificate of Amendment to the Certificate of Formation as filed with the Delaware Secretary of State on <mark style="color:red;">\[Date of Amendment Filing]</mark>. Please update your records accordingly. Please contact me at <mark style="color:red;">\[founder email]</mark> if you have any questions. Thank you very much.\ \ Sincerely,\ <mark style="color:red;">\[Founder Name]</mark> "\ \ ***Tax Return Method:***\ \ If you are currently preparing for an upcoming tax return, then the Tax Team can usually help submit the name change on the tax return itself. Double check with the Tax Team for eligibility and provide the team with the Certificate of Amendment to file along with the tax returns. # OCV Catalyst Program {% hint style="info" %} Applications for Spring 2026 are now open. Catalyst Spring 2026 begins February 9, 2026.\ Deadline to apply: January 16, 2026. [Apply here](https://job-boards.greenhouse.io/opencoreventures/jobs/5410671004). {% endhint %} Catalyst by Open Core Ventures is an open source sponsorship program that provides funding and mentorship to open source authors and maintainers to catalyze project growth part-time, maintaining their existing time and work commitments. The program aims to support open source projects with commercial viability by helping maintainers increase project usage, revitalize project activity, grow community contributions, and develop relationships with experienced open source experts. Catalyst supports OCV’s [mission](https://handbook.opencoreventures.com/about-ocv/mission-and-vision) to enable more people to become entrepreneurs and lower the barrier to starting an open core company, and its [vision](https://handbook.opencoreventures.com/about-ocv/mission-and-vision) to start the majority of venture-funded open core companies. Despite technical promise and utility, many open source projects face challenges such as insufficient resources or stalled community growth. The Catalyst Program seeks to strengthen projects and the greater open-source developer community, as well as offer entrepreneurial opportunities to exceptional open source authors and maintainers. **The Catalyst Program has three goals:** 1. Support open source sustainability through financial support and mentorship. 2. Increase the number of open source projects that have the potential to become open core companies. 3. Foster relationships with high-potential open core founders. ## Program Details Catalyst is a three-month program that provides funding and mentorship to eligible open source authors and maintainers. 1. Sponsorship awards are $10,000. Award amounts may vary on a project-by-project basis. 2. Program participants will receive goal-setting support in weekly hours with the OCV team. 3. Program participants will set quantifiable goals to be met over the three months and are expected to share brief bi-weekly progress updates. 4. Participants may be invited to be featured in a blog post. Funding is not contingent upon meeting program goals. However, recipients who fail to meet reporting requirements or attend scheduled check-ins may be dismissed from the program and forfeit any remaining funds. ## Eligibility criteria <a href="#block-170feb7b074d80d8ae35cbac90384525" id="block-170feb7b074d80d8ae35cbac90384525"></a> Sponsorship is awarded to specific contributors. Foundations and non-profits are not eligible to receive sponsorship. Eligible projects must fulfill at least 1 of the following criteria: 1. Potential for commercial viability 2. An author or maintainer with an interest in becoming a technical co-founder Sponsorship participants are expected to use the award funding to achieve the goals throughout the program. ## Receiving sponsorship funds <a href="#block-170feb7b074d8035a834dd60916ea8f3" id="block-170feb7b074d8035a834dd60916ea8f3"></a> Sponsorship awards will be given in two installments throughout the three-month program. Recipients are required to complete a W-9 and will receive a 1099 tax form from Open Core Ventures. Sponsored projects and their authors who demonstrate notable growth in the sponsorship program may be invited to start an open core company under the standard OCV Model. Participation in the Catalyst Program does not guarantee an offer for further funding from Open Core Ventures. # OCV Employees Handbook for internal OCV policies and operations. The OCV Employee Handbook is our central repository for how we run our brand. We follow a [handbook-first](https://handbook.gitlab.com/handbook/about/handbook-usage/#why-handbook-first) approach. The [advantages](https://handbook.gitlab.com/handbook/about/#advantages) of a handbook-first approach are well documented. When a decision or recommendation is made, the first action item is to document the change in the handbook. **Decisions aren’t final until they are in the handbook.** ## Quick Links <table data-view="cards"><thead><tr><th></th></tr></thead><tbody><tr><td><h2>VC Ops</h2></td></tr><tr><td><h2>PeopleOps </h2></td></tr><tr><td><h2>FinanceOps</h2></td></tr></tbody></table> ## Directly responsible individual (DRI) <a href="#block-9897974232e041beaca71219640c06cc" id="block-9897974232e041beaca71219640c06cc"></a> We use the directly responsible individual (DRI) decision-making framework over consensus-based decision-making. 1. **Each project has a single DRI.** The DRI is ultimately accountable for the success or failure of the project. They make the final decision. 2. **DRIs ask for help.** It’s up to the DRI to pull in the resources and information necessary to complete the project. A DRI rarely completes a project on their own. They consult and collaborate with necessary stakeholders and provide reasonable timelines for contribution. A DRI is not obligated to act on feedback or input because it was given. 3. **DRIs make the final decision.** They are responsible for providing relevant context when sharing final decisions. However, DRIs do not need to build consensus around the decision. 4. **Disagree and commit.** You may disagree with the decision of a DRI and respectfully voice your opinion, but you cannot refuse to participate due to a disagreement. # Communication OCV operates in an **all-remote environment.** Our meeting and communication standards are designed to effectively manage time-zone differences and calendar availability. We communicate in accordance with our [values](/ocv-employees/culture/values). ## General availability (GA) <a href="#block-1d2feb7b074d8029b64ac016d11d5460" id="block-1d2feb7b074d8029b64ac016d11d5460"></a> {% hint style="info" %} **General Availability: Monday-Friday from 8:30 am to 5:30 pm LOCAL TIME** {% endhint %} General Availability (GA) indicates suitable hours for scheduling meetings. Team members may have personal obligations and appointments during the day. We trust our team to manage their time independently while meeting business objectives. To promote a healthy and sustainable work environment, we ask our team & external partners to adhere to our GA guidelines and only request meetings within an individual's GA window. ### GA scheduling exceptions Scheduling a meeting outside of someone’s GA window may be unavoidable in the following exception cases: 1. Recurring meetings at 8:00 AM local time when necessary, based on General Partner calendar availability. Meetings before 8:00 AM local time should be limited (2-3 times per month maximum) and align with GP calendar availability. 2. For time-sensitive projects, you may request meetings outside standard hours. There's no obligation to accept these requests, which should be reserved for critical business needs only. Generally, team members are not expected to attend meetings outside of GA and the exception cases outlined above. When such situations arise, OCV team members should communicate directly with the meeting organizer. ### General Partner (GP) availability For meetings scheduled around GP availability, ensure that at least one other team member from the same time zone can attend to provide support. It’s fine for team members to set their General Availability hours according to a different time zone to accommodate personal or business needs. Please discuss this with your manager and inform the broader team. ## Slack <a href="#block-1d7feb7b074d80fe9bc6c4e18fed4284" id="block-1d7feb7b074d80fe9bc6c4e18fed4284"></a> Slack is the primary internal communications channel. Be mindful of teammates’ time zones when sending notes on messaging platforms. There are no expectations to respond to messages sent outside of your general availability window. Please try to minimize DMs during off-hours. Suggested alternatives to off-hour DMs: 1. Add notes to 1:1 docs 2. Schedule Slack message to be sent the following business day 3. Email ### Slack Connect channels <a href="#block-1d9feb7b074d80118fd5d529eb8967bc" id="block-1d9feb7b074d80118fd5d529eb8967bc"></a> For shared, real-time communication between OCV and OCV companies, create Slack Connect channels as needed. **Only the company founders (CTO, CEO, Founding Engineers) are allowed in the shared channel.** Company channels are formatted `“ocv-companyname”` For external collaborators such as consultants, advisors, or contractors, do not issue an OCV email address. Instead, send Slack invitations for the designated channel(s) to their personal or company email. ## Cell phone & text messages <a href="#block-1d8feb7b074d80b582c8c8847d69fb38" id="block-1d8feb7b074d80b582c8c8847d69fb38"></a> We currently use a virtual telephone service for our communication. All new OCV team members have the option to get a Google Voice number to make and receive calls and texts during onboarding. Communicating using personal cell phone numbers should be limited to urgent needs only. ## OCV Shorthands <a href="#block-1d2feb7b074d8003af66e3a602f8dc80" id="block-1d2feb7b074d8003af66e3a602f8dc80"></a> To streamline communication, we've developed common terminology to quickly set expectations. While we use these shorthand terms to work efficiently toward our goals, they're not meant to replace mutual respect and active listening. Here are the abbreviations we use in written communication: 1. **FYA:** “For Your Attention.” For delegating to a DRI. DRI can decide on the next steps and can request greater context as needed. 2. **FYI:** “For Your Information.” No action items required. 3. **ATIH:** “All the Information I Have”. There’s nothing more beyond what’s included in this message (and any forwards below) that can be provided. Sender would appreciate the recipient’s resourcefulness in obtaining any missing information to accomplish the requested task. 4. **P1:** This is a high-priority activity/project. May require bumping other existing TODOs to accomplish this. General Partner requests should automatically take on P1 status unless a specific deliverable deadline is mutually agreed upon. 5. **NAP:** "Not a priority." Generally applies to activities that do not directly contribute to our imminent quarterly goals. Signals a quick way to wrap up a discussion so we can focus on P1 and other priority activities required to meet goals and drive growth. 6. **Live:** Chatting Live. A topic is best addressed in a live conversation to streamline communication and provide space for context. 7. **NCB:** “No Circleback.” Used to encourage open dialogue and protect privacy. 8. **Optional:** Someone who is invited to shadow a meeting, but does not schedule the meeting around their availability. 9. **Attendee:** Someone’s presence is required in a meeting. Do account for their availability in scheduling. ## Sensitive Information <a href="#block-2b6feb7b074d8054b615de6ba2333193" id="block-2b6feb7b074d8054b615de6ba2333193"></a> OCV employees are responsible for protecting sensitive information throughout its entire lifecycle—from creation and use to storage and disposal. Sensitive information includes, but is not limited to, portfolio company information, financial data, [**personal identifiable information (PII)**](https://handbook.opencoreventures.com/ocv-employees/culture/communication#block-2b6feb7b074d80ee9f83dae3bbf26ca6), employee records, and confidential communications. Sensitive information should never be discussed in public spaces or transmitted through unsecured channels. When working remotely, take extra precautions to ensure home networks are secure. Digital files should be securely stored if they need to be stored at all, and access should only be granted to individuals on a “need-to-know” basis. Physical documents should be kept in locked storage when not in use and shredded when no longer needed. Employees should control the audience receiving the information and use the proper communication channels for sharing sensitive information - verify recipients before transmitting data, and flag any security incidents immediately. ### Personally Identifiable Information (PII) <a href="#block-2b6feb7b074d80ee9f83dae3bbf26ca6" id="block-2b6feb7b074d80ee9f83dae3bbf26ca6"></a> PII is any data that can be used to identify, contact, or locate a specific individual, either alone or when combined with other information. Common examples of PII include full names, Social Security numbers, driver's license numbers, passport information, email addresses, phone numbers, home addresses, date of birth, financial account numbers, credit card information, medical records, and IP addresses. PII should rarely be uploaded to Google Drive, as company drives are often shared with groups via email distribution. Instead, the transmission of PII should be done via a secure data link or other controlled channels of communication if it is required. ### AI Policy 1. Do not input firm data (emails, files, etc.) into AI models that are not self-hosted by OCV. 2. Do not grant AI models access into firm systems (except for OCV self-hosted AI instances). 3. Remove Circleback when discussing sensitive data. # Meetings ## Meeting Guidelines 1. Start and end meetings on time. 2. Every meeting includes an agenda. No agenda = no meeting. 3. Companies present in the order listed in the invite title, which matches the order of the agenda docs. 4. Turning on your camera allows for more complete and intuitive verbal and non-verbal communication. 5. Take live notes in the agenda doc so those who cannot attend can review at any time. 6. Meetings have Circleback AI Notetakers added by default - remove if discussing sensitive information (more on Circleback policy below). ## Scheduling meetings All meetings are held on Zoom. Standard meeting lengths are 25 and 50 minutes. Ensure Guest permissions are set to “Modify Event.” Use [Calendly](https://calendly.com/) to schedule meetings with external participants. ### Formatting event titles <a href="#block-1d2feb7b074d80b28bb0e73f58b58a40" id="block-1d2feb7b074d80b28bb0e73f58b58a40"></a> OCV uses standard titling formats for legibility and discoverability. 1. Always include the OCV company or external partner name and “OCV” in the title. 2. For recurring meetings, indicate frequency (examples: Weekly, Biweekly, Monthly). 3. [Individual Office Hours](https://handbook.opencoreventures.com/founder-experience/office-hours#individual-office-hours) meetings are entered as `OH: Company Name | OCV` 4. [Group Office Hours](https://handbook.opencoreventures.com/founder-experience/office-hours#group-office-hours) are entered as `GOH: Company Name, Company Name, Company Name | OCV` . Link meeting agendas in the same order. 5. Weekly meetings are entered as\ `Weekly All-Hands`\ `Weekly Automation`\ `Weekly Content: Name | Name | Name`\ `Weekly Engineering: Name | Name | Name`\ `Weekly Finance Ops`\ `Weekly Sourcing: Name | Name | Name`\ `Weekly Recruiting: Name | Name | Name`\ `Weekly Ops: Name | Name | Name` 6. Monthly Company Finance meetings are entered as `Finance Vendor Name | Company Name Monthly Finance Review` 7. For new company calls, set up in Calendly, entered as `[Name] ([Project Name]) | OCV` 8. For GP-led meetings: default to the PA team’s preference: 9. Example for Post-Seed GOH: `OCV GOH: Company Name, Company Name, Company Name with GP Name (Monthly)` ## Rescheduling and canceling meetings <a href="#block-1d6feb7b074d80639914c72d2b42fb40" id="block-1d6feb7b074d80639914c72d2b42fb40"></a> Meeting organizers should cancel or reschedule when there are no material updates to discuss or when key participants have scheduling conflicts. This practice ensures efficient use of everyone's time and maintains meeting productivity. 1. **Weekly Functional Lead meetings:** Cancel if the functional lead is unavailable or if both management members cannot attend. The meeting may proceed with at least one management member present. 2. **For all other meetings:** If someone has a scheduling conflict, either reschedule the meeting directly or message the group to find a preferred alternative time. ## Agendas <a href="#block-1d2feb7b074d807f8391d3dcb84c4a0e" id="block-1d2feb7b074d807f8391d3dcb84c4a0e"></a> We use agendas to document all meetings. Every meeting must have a standard-formatted agenda attached to the calendar invite. Agendas are prepared in advance and linked in the meeting invitation description as a full URL for maximum accessibility. 1. Public agendas are entered as `Agenda: URL agenda link` 2. OCV Internal notes are entered as `OCV Internal Notes Only: URL notes link` Ensure all invitees can access the public agenda document and all internal attendees can access internal notes. Verify both the document's location and permission settings, as both factors determine access. External meetings also require an agenda. This practice ensures a historical record of partner and vendor conversations for future reference. Let the external party know about OCV's meeting agenda policy and ensure they have access before the meeting. If the external party provides the calendar invite, request that they add the agenda to the invite. ### By Date agenda format By Date agendas are organized as notes per meeting, and have a persistent record that can be shared with other participants. These are well-suited to meetings that may benefit from asynchronous participation or where notes may be referenced by people who were not present for the conversation. ### Rolling agenda format <a href="#block-1d2feb7b074d80d6b119c51767871cbb" id="block-1d2feb7b074d80d6b119c51767871cbb"></a> A rolling agenda is formatted as a numbered list, with each number representing a topic to discuss. New items are added to the bottom of the document. The discussion works from the bottom and proceeds as far up the list as we can. Once an item requires no more discussion, it's removed from the list. If we don't make it to a topic in one conversation, it remains there for the next one, or until needed. 1. **Labeling agenda items:** Each agenda item is labeled with a date, owner, and purpose.\ Example: `2025-06-01 Erica DISCUSS: Disucssion topic details` 2. **Resolving action items:** If a topic had previously been marked with DISCUSS, TODO, or DOTO, it should first be marked as DONE or MOVE, or WONT to communicate to the other person what its status is. This allows them to confirm that they agree that no further action is needed. Once discussed in the next agenda (or viewed asynchronously), the item can be removed. Only the person whose name precedes the item can remove it. 3. **Removing agenda items:** The person who added the item is the person responsible for removing the item from the list. If you added a topic and don't need to discuss it further, delete it. This is common for FYI or THANKS. It's actively discouraged to use the rolling agenda for retaining notes of what's been discussed. Notes of anything important should be added to the handbook. This ensures that their context is available to others, and at the time they're ready to address the issue. ### Agenda topic labels <a href="#block-1d2feb7b074d8086977aca8cb2f924ec" id="block-1d2feb7b074d8086977aca8cb2f924ec"></a> It's recommended to prefix an agenda item with the name of the person who added it and a label indicating its purpose. Here are the labels and their meanings: 1. **ISO\_DATE** **("2021-01-20"):** Use when postponing a discussion topic until a particular date. 2. **DISCUSS:** Use for topics that need live discussion, explanation, or resolution. 3. **FYI:** Use to broadcast a message that you want to vocalize, but don't expect to need much time. Expected response is either a clarification question or "got it". 4. **HELP:** Use to solicit input on ways to approach a current problem. No need for resolution, and usually ends with "thanks for the input; I'll follow up shortly with a recommendation". 5. **THANKS:** Use to call out great work or appreciation. 6. **TODO \[Name]**: Use to designate an action item and DRI. 7. **DONE:** Use to indicate a resolved TODO action ready to be cleared by the person who originated the topic. Also used for a decision that has been made that requires no further discussion or communication. (Use TODO for decisions that need to be communicated to another party.) 8. **IN PROCESS:** to indicate that action is underway. ## Note-taking during meetings <a href="#block-272feb7b074d8019841de8c69699fd2c" id="block-272feb7b074d8019841de8c69699fd2c"></a> 1. Everyone has the agenda doc open. 2. Discussion flows linearly through the doc. Top down if organized "by date." Bottom up if organized as rolling. 3. Add your name to the agenda as a way to signal that you'd like to speak. This helps prevent talking over each other and overcomes the slight delay that is experienced with videoconferencing. 4. Each teammate adds their point or question in real time during the call. Always add your point below others' so that the linear flow is maintained. 5. Use numbers instead of bullets, so they are more easily referenced in conversation. 6. Each person's point should be its own bullet, so that you don't type on the same line as a teammate. 7. Where appropriate, links should be added for review and additional context in connection with associated bullet points (e.g., LinkedIn profiles, publications on public websites, internal projects with shared access). 8. For GitLab CEO Shadows: Please do not request agenda doc access. You can request the presenter to share during the meeting. There's no need to take notes for OCV meetings. ### AI Notetakers <a href="#block-272feb7b074d80a996aeec211eda5bcf" id="block-272feb7b074d80a996aeec211eda5bcf"></a> OCV uses Circleback (CB) to reduce the note-taking burden during meetings, improve the accuracy of meeting records, and build a usable, searchable archive of key information. Circleback captures decisions, action items, and important context after meetings, ensuring alignment and accountability without disrupting live conversation flow.\ \ To maintain operational transparency and keep reliable records, certain meetings are recorded, transcribed, and summarized into notes. Attendees should be aware that these records may be referenced later for business purposes—such as decision reviews, audits, operational alignment, or strategic planning. Please flag sensitive topics either before or during the meeting so Circleback can be removed.\ \ For any meetings that use Circleback transcription, add a notice in the Google Calendar invite description, alongside the agenda link, notifying attendees of transcription use:*"This meeting will be recorded using Circleback. Notes and recordings may be used for future business purposes. Please flag any sensitive topics during the meeting if necessary."* # Values OCV's five core values are the guiding principles that shape our results-oriented culture. They enable us to align our behaviors and actions with our goals. ## 1. Boldness <a href="#block-118feb7b074d8069bc90c7d894c0d8dc" id="block-118feb7b074d8069bc90c7d894c0d8dc"></a> We are opinionated, decisive, and confident. Operating with conviction, openly acknowledging challenges, and unapologetically committing to our model is how we will achieve our vision. ### If we’re convinced, we’re committed <a href="#block-239feb7b074d80e4859ac7e668afcb3b" id="block-239feb7b074d80e4859ac7e668afcb3b"></a> VC returns follow a power law where the returns of your number one investment are bigger than all others combined. Which means if we’re convinced a project has commercial potential but have trouble recruiting, we double down instead of giving up. Missing out on a top idea can have a greater negative impact than all of our other work combined. ### Be wrong but quick We accept that we often need to make decisions with imperfect information. We have a high tolerance for experimenting and being wrong with a high expectation for swift course correction. ### Be prepared to evangelize We are turning the venture model on its head and acknowledgingacknowledge there are inherent challenges. We embrace these challenges as creative constraints and believe success will validate our boldness. We are committed to our model and equally responsible for evangelizing the model. ## 2. Transparency <a href="#block-118feb7b074d809bb4acd095d88d4fbe" id="block-118feb7b074d809bb4acd095d88d4fbe"></a> We operate in a transparent environment, with clear terms and open communication, guided by our public handbook. Developing a culture of shared context is a competitive advantage that enables us to move faster. ### Contextual decision-making We openly share the “why” driving our decisions. We are not a consensus-driven organization. We give decision-making authority to designated, directly responsible individuals (DRIs). DRIs demonstrate respect for their collaborators and peers by proactively providing context for the final decision. This helps us avoid analysis paralysis, removes ambiguity, and empowers project owners to maintain forward momentum. ### Documentation We write things down. We take notes during synchronous meetings and document outcomes and action items. Firm guidance and public process changes are communicated with a handbook link. ### The 90% Rule of Scaling <a href="#block-fd53a892c1cc41d8a733e65efb614197" id="block-fd53a892c1cc41d8a733e65efb614197"></a> Our documented processes cover >90% of business use cases. We automate repeatable activities as much as possible through technology. Exceptions or edge cases should occur less than 10% of the time. Don't create elaborate processes for edge cases because they should be one-offs and rare. If we’re spending more than 10% of our time solving for edge cases, we need to review and update our documentation. ### Open communication We foster an environment of internal open communication, where we prioritize speed of communication over polished messages. All questions are welcome and valid in the pursuit of clarity and deeper understanding. Open is not the same as broadcast. As we grow, transparency means the right people see the right context, not that every message reaches every person. Choose Slack channels so the people who need context have it without forcing the rest of the team to filter through it. As a rule of thumb: anything everyone should know goes in the #wocv-general channel; communication with founders happens in the respective company's channel; functional topics go in the relevant channel; a one-off question to a single teammate not relevant to others can go in a DM. ## 3. Resourcefulness <a href="#block-118feb7b074d8049a9e6ed6892e2df4c" id="block-118feb7b074d8049a9e6ed6892e2df4c"></a> We think creatively and adapt quickly; iteration drives every decision and action. ### Ship the minimum viable change (MVC) We embrace a minimum viable change mentality. We don't let perfect be the enemy of progress—we ship quickly, learn, and refine. When we see an opportunity to move forward, we take it now rather than waiting for ideal conditions. “Better” offerings should be tracked and planned for delivery after we've shipped an MVC. The “Best” version of our service model is a guidepost for OCV’s long-term vision. ## 4. Perseverance <a href="#block-118feb7b074d803392effa0d781702ad" id="block-118feb7b074d803392effa0d781702ad"></a> We take challenges head-on and do not bat an eye at the hard stuff. ### Solutions-oriented We maintain composure when facing obstacles and channel our energy toward finding answers rather than dwelling on problems. We do hard things because they're worth doing, not despite their difficulty. ### Explore unconventional paths We leverage cross-functional resources and perspectives to solve problems in unexpected ways. We actively explore unusual avenues, experiment with emerging tools and technologies, and encourage curiosity-driven innovation beyond our core work. ## 5. Inclusion <a href="#block-118feb7b074d808e815fe93539036d06" id="block-118feb7b074d808e815fe93539036d06"></a> We acknowledge and embrace differences as a strength and source of innovation. Taking a genuine interest in individual perspectives and experiences helps us find the outliers to achieve our [mission](https://handbook.opencoreventures.com/about-ocv/mission-and-vision). ### Challenge our assumptions We take a genuine interest in understanding people's motivations and thought processes rather than assuming we know them. We recognize that our initial read on someone may miss what makes them exceptional, so we dig deeper and remain open to being surprised by where we find talent and innovation. ### Create space for diverse thinking We allocate time and resources for exploration that may not directly tie to immediate goals. We encourage team members to share interesting ideas and perspectives, and establish clear guidelines for evaluating which ideas to pursue while maintaining openness to unexpected connections and insights. # Pulse [Pulse](https://pulse.opencoreventures.com) is OCV's internal operations system and the single source of truth for company, investment, and operational information. ## Open Pulse * [Open Pulse](https://pulse.opencoreventures.com) * [Open EvenOne Pulse](https://pulse.evenone.ventures) (EvenOne team) Pulse accounts are invitation-only. Follow the invitation email to confirm your account and set a password. If you cannot sign in or cannot find the information you need, contact an OCV administrator. ## Start here * [Roles and permissions](/ocv-employees/pulse/pulse/roles) — understand what each account can see and change. * [Slack](/ocv-employees/pulse/pulse/slack) — connect Pulse to Slack and use Pulse commands and link previews. * [Investment pipeline](/ocv-employees/pulse/pulse/pipeline) — work with projects as they move through the investment process. ## What Pulse contains ### Companies Company pages bring together the current operating record for each company. Depending on your role, a page may include company details, key dates, updates, KPIs, team members, links, financial information, investments, and related Google Drive folders. ### Projects and the pipeline Projects represent opportunities being researched or evaluated. The [Project Pipeline](/ocv-employees/pulse/pulse/pipeline) groups active projects by stage so the investment team can see what needs attention and who owns the next step. ### People The People directory provides searchable profiles and company team-member records. Some personal, compensation, and integration details are restricted by role. ### Dashboard and utilities OCV users may also see the portfolio dashboard, performance views, company data health, salary benchmarking, and Slack alerts. These tools are only visible when your role permits access. ## Using Pulse well * Treat Pulse as the current operational record. Update the relevant record instead of keeping a separate copy of important information. * Keep company and project names, ownership, stages, dates, and links current. * Enter KPI values for the correct period and use the notes field when context is needed. * Use updates and comments in the record where the relevant team can find them. * Do not put credentials, API tokens, or other secrets in descriptions, comments, updates, or links. Access is intentionally limited by role and, for company users, by assigned company. If an action or section is missing, see [Roles and permissions](/ocv-employees/pulse/pulse/roles) or ask an administrator rather than creating a duplicate record. # Roles and permissions Pulse uses two groups of roles. **OCV roles** have organization-wide access; **company roles** are limited to the companies assigned to the user. Each user has one Pulse role. The exact fields and actions shown on a page can also vary by feature. Pulse hides actions that your role cannot perform. ## OCV roles OCV roles are used by the OCV operating team and can access records across the organization. | Role | Scope | Typical access | | --------------------------- | ----------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------- | | **Admin** (`ocv_admin`) | All companies, projects, and people | Full operational access, user invitations, role and company assignments, account administration, and system settings. | | **Manager** (`ocv_manager`) | All companies, projects, and people | Broad operational access, including creating and updating records. Managers can work with users and company data but cannot administer user roles like an Admin. | | **Viewer** (`ocv_viewer`) | All companies, projects, and people | Read access to organization-wide information. Viewers do not normally create or edit operational records. | Sensitive information and integrations—such as compensation, credentials, and some finance or fundraising records—may have additional restrictions even for an OCV user. ## Company roles Company roles are used by founders, executives, and other company-side users. They can access only the companies assigned to their Pulse account. | Role | Scope | Typical access | | ---------------------------------- | ------------------ | --------------------------------------------------------------------------------------------------- | | **Company Admin** (`co_admin`) | Assigned companies | Manage company-specific operating information and the company workflows available to company users. | | **Company Manager** (`co_manager`) | Assigned companies | Update permitted company information, team records, KPIs, and updates for the assigned companies. | | **Company Viewer** (`co_viewer`) | Assigned companies | Read-only access to permitted information for the assigned companies. | Company roles do not provide access to the organization-wide OCV pipeline, other companies, or OCV-only administration. Access to sensitive fields may still be restricted based on the record and the user's role. ## Managing access OCV Admins manage users from **Admin → Users**: 1. Select **Invite user** to send an invitation. 2. Choose the user's role. 3. For a company role, select the companies the user should access. 4. Send the invitation. The company assignment is important: a company user can see only the companies selected on their account. Change a user's role or company assignment from the same user record when their responsibilities change. Do not share an account or another person's API token. If you receive an **Access denied** message, cannot see an expected company, or an invitation has expired, contact an OCV Admin. Do not work around the permission by creating a second account or copying restricted information into another record. # Slack Connecting Slack lets Pulse recognize your Slack identity, enforce your Pulse permissions, and provide company and project information without leaving Slack. Pulse is connected to the `opencoreventures.slack.com` workspace. ## Connect your account 1. Sign in to Pulse. 2. Open your account menu and select **Profile**. 3. In the Slack section, select **Link Slack**. 4. Review the Slack authorization screen and approve the connection. 5. Return to Pulse and confirm that the Slack section shows your account as linked. You can also run `/ops auth` in Slack. If Pulse does not recognize you, it returns an authentication button that takes you through the same process. To disconnect, return to **Profile** and select **Unlink Slack**. Linking Slack does not give Pulse permission to act as you; it associates your Slack user with your Pulse account so Pulse can apply the same access rules. ## Slash commands Enter these commands using the `/ops` Slack command: | Command | What it does | Access | | ----------------------------- | ---------------------------------------------------------------------------- | -------------------------------------------------- | | `/ops help` | Lists the available Pulse commands. | Everyone with access to the Slack app. | | `/ops auth` | Starts Slack account authentication when your account is not linked. | Everyone with access to the Slack app. | | `/ops details <company name>` | Shows the matching company's available details and a **View on Pulse** link. | A linked Pulse account with access to the company. | | `/ops link` | Opens a company selector to link the current Slack channel to a company. | OCV users. | | `/ops recon <repository URL>` | Gathers intelligence about a GitHub repository and returns a summary. | OCV Managers. | For example: ``` /ops details Acme /ops recon <https://github.com/example/project> ``` The `recon` URL should be sent in Slack's link format, with the URL inside angle brackets. The response can include repository statistics, languages, contributors, recent activity, and a link to create or view a research document when the project is eligible. ## Link previews Pulse can enrich links shared in Slack: * GitHub repository links can receive a project or repository summary. * Pulse links can receive a preview when the linked record is one you are allowed to view. * If authentication is required, Slack shows a link to connect your Pulse account. If a preview does not appear, check that you are linked to Pulse, that you have access to the record, and that the original link is the canonical Pulse or GitHub URL. ## Link a company channel An OCV user can associate a company with its Slack channel: 1. Run `/ops link` in the channel that belongs to the company. 2. Select the company from the list. 3. Confirm that Pulse reports the channel as linked. A channel can be linked to only one company. A company or channel that is already linked cannot be selected for a second link. Linked channels may be used for company description updates and KPI reminders when those notifications are enabled for the company. ## Troubleshooting * **Pulse asks you to authenticate:** use **Link Slack** in your Pulse profile or `/ops auth`, then retry the command. * **You do not have permission:** Slack uses your Pulse role and company assignments. Ask an OCV Admin to check your access. * **A company cannot be found:** use the company's Pulse name and check that you are allowed to view it. * **The command is still processing:** some requests run asynchronously. Wait a moment and retry only if no response arrives. # Investment pipeline The [Project Pipeline](https://pulse.opencoreventures.com/pipeline) is the working view of projects moving through OCV's investment process. It is available to OCV users and is organized as a column for each active pipeline stage. For the process behind these stages, see the [OCV Investment Process](https://handbook.opencoreventures.com/investment-process/investment-process). ## Pipeline stages The OCV Pulse pipeline uses these stages: | Stage | Use it when | | ------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------- | | **Identification** | A project has been identified and is being screened for fit and potential. | | **Validation** | The team is researching the opportunity and testing whether it has venture-scale potential. The investment memo is developed during this work. | | **CTO Recruitment** | CTO recruitment is in progress alongside the project validation and investment work. | | **Investment Committee** | The project is ready for Investment Committee review or a decision is pending. | | **Company Formation** | The investment has been approved for incubation and the new company is being formed. | The recruitment stage is named **CEO Recruitment** in the EvenOne Pulse deployment. Projects that are unassigned, closed, or already in a later portfolio state are managed from the Projects area rather than the active pipeline board. ## Read the board Each column header shows the stage name and the number of projects in that stage. A project card can show: * project name and description; * a high-priority marker; * GitHub or project statistics such as stars and contributors; * a research document link; * the assigned OCV associate; and * a goal launch date or linked company. Select a project name to open its full record. The project record is where you review the repository, links, notes, and other available details. ## Filter the board Use the filters above the board to narrow the view: * **User** shows projects assigned to selected OCV users. * **Priority** shows high-priority and/or normal projects. The selected priority filter is remembered in your browser. Each stage is paginated independently, so use the controls at the bottom of a column to see more than the first page of projects. ## Add or update a project Users with the required write access can select **Add project** from the pipeline. When creating a project: 1. Add the repository URL when there is one. Pulse can fetch project information from GitHub or GitLab. 2. Review the fetched name, description, stars, and license. 3. Choose the current pipeline stage. 4. Mark the project high priority only when it needs special attention. 5. Set the goal launch date and assign the OCV associate when known. 6. Save the project and keep its research document or relevant links attached. Edit a project when its stage, owner, priority, launch date, or research status changes. Keep the stage aligned with the Investment Process so the pipeline is a reliable view of work in progress. If an opportunity is no longer active, record the outcome rather than leaving stale ownership and dates on the active board. # Investment Process ## Overview OCV employs a rigorous underwriting methodology to determine if an open source project has venture-scale COSS potential. The stages include Project Identification, Validation, CTO Recruitment, and Investment Committee. This process is owned end-to-end by OCV Investors, hands-on company builders who identify and underwrite projects, pitch them to the Investment Committee, and launch and incubate the resulting companies. The [Investment Pipeline](https://pulse.opencoreventures.com/pipeline) is tracked in Pulse. All Investment Memos should use the [Investment Memo Template](https://docs.google.com/document/d/1W3XJ7BBMhQhQCdxR-NIigh_a6Sn7a7tkENQxG6q7GOs/edit?usp=sharing). ### Stage 1: Identification Investors verify the project meets minimal open source qualifications and warrants further investigation. We're typically looking for projects with at least 20 pull requests per month and 5,000 stars, with a permissive license (MIT, Apache, BSD, etc.). Investors and GPs meet weekly to discuss the investment pipeline and any newly identified projects. Investors are expected to identify at least 2 new projects per week. ### Stage 2: Validation Investors undertake a rigorous, multi-stage evaluation process to assess whether a given OSS project presents a viable foundation for creating a venture scale company. This outcome of this process is an [Investment Memo.](https://docs.google.com/document/d/1W3XJ7BBMhQhQCdxR-NIigh_a6Sn7a7tkENQxG6q7GOs/edit?usp=sharing) ### Stage 3: CTO Recruitment CTO is the most crucial part of our investment process. The CTO recruitment process typically occurs concurrently with the COSS validation. Through our conversations with the authors and top contributors of the OSS project, we are able to assess and quickly develop a short list of individuals we believe are the top Founder CTO candidates for the company. The OCV investor who sourced the project leads typically leads the recruitment, but CTO recruitment is viewed as a team sport, with multiple General Partners and other investors always available to engage as needed. Armed with extensive project knowledge, comprehensive market and competitive research, and deep conviction around a product vision and commercial strategy, we present potential Founder CTOs with a compelling view of how their passion can become a generational company. Our offer is straightforward: we match their current salary, provide meaningful founder equity, and partner with them to build early traction and recruit a permanent CEO. ### Stage 4: Investment Committee (IC) Investment Committee (“IC”) meets monthly to review and to discuss all projects being proposed for incubation. The investment committee is composed of the three General Partners. All three General Partners are equal members of the investment committee. Other attendees include the CFO and the Investors proposing projects for incubation. IC can vote to approve an investment, approve an investment conditional on recruiting an acceptable CTO, reject an investment opportunity, or defer on a decision pending additional research or validation. # CEO Recruiting Placeholder for CEO Memo template # Project Pipeline Meeting # Company Formation Process Forming a company involves a lot of moving parts, and OCV's role is to handle the operational complexity so founders can stay focused on building. The following pages document each stage of that process in order, from internal approval to when the business is funded and ready to operate. ## Formation Steps 1. [Internal approvals and conflict checks](/ocv-employees/vc-ops/company-formation-process/internal-approvals-and-conflict-checks) 2. [Choose legal entity structure](/ocv-employees/vc-ops/company-formation-process/legal-entity-structure) 3. [Founder offer & equity](/ocv-employees/vc-ops/company-formation-process/founder-offer-and-equity) 4. [Choose company name](/ocv-employees/vc-ops/company-formation-process/company-name) 5. [File incorporation documents](/ocv-employees/vc-ops/company-formation-process/incorporation-documents) 6. [Issue equity & establish options pool](/ocv-employees/vc-ops/company-formation-process/issue-equity-and-options-pool) 7. [Fund the business](/ocv-employees/vc-ops/company-formation-process/funding) 8. [Set up systems](/ocv-employees/vc-ops/company-formation-process/systems) # Internal Approvals & Conflict Checks New company approval process consists of two parts: GP approval and a GitLab conflict check. ## **GP Approval** OCV team prepares project summary and intended business plan (in the internal research doc) for GP review. Founder (CTO) compensation sign off proposal to the GP should include: 1. Founder Name (with LinkedIn profile) 2. Title 3. Cash Compensation (in USD equivalent; provide justification) 4. Equity (following framework from [Equity Guidelines](/ocv-employees/vc-ops/company-formation-process/founder-offer-and-equity) and provide support around experience level) 5. [Options Pool Size](/ocv-employees/vc-ops/company-formation-process/issue-equity-and-options-pool) (and intended allocation reserves) 6. Start Date / Timeframe (if known) 7. Any additional offer details ## **GitLab Conflict Check** New companies need to pass a conflict check with GitLab prior to an offer being sent. The conflict check requires that an email be sent to the GitLab team with the following information: * The name of the OS project * A link to the project * A one sentence description of what the new company will do # Legal Entity Structure An overview of the two legal entity structures OCV uses for new companies: C-Corp and Public Benefit Corporation (PBC). ## C-Corporation <a href="#block-6d43e75d799e44268a73bf6031bcf9f8" id="block-6d43e75d799e44268a73bf6031bcf9f8"></a> C-corporations are the standard entity type for venture-backed companies because they allow for easy stock issuance and transfer, the ability to raise capital through the sale of stock, and provide limited liability for shareholders. Additionally, C-Corporations can have multiple classes of stock, which is useful for creating different levels of ownership and control. ## Public Benefit Company <a href="#block-127c4fe1ed594fd9ad32c47a74503632" id="block-127c4fe1ed594fd9ad32c47a74503632"></a> Public Benefit Companies are for-profit corporations that are legally bound by inclusion in their corporate charter (Certificate of Incorporation) of a set of specific public benefits as part of their statement of purpose. When it's appropriate, OCV will consider incorporating a company as a public benefit company with the associated public good being associated with their stewardship of open-source software. OCV will consider incorporating as a public benefit company when: 1. Safeguarding the open source project is essential 2. The company is not leveraging more than one open source project 3. The consideration is business-driven OCV companies incorporated as a public benefit company are referred to as OCV public benefit companies (OPBC). ### ​Open Charter​ Companies that incorporate under the public benefit company structure will adopt OCV’s Open Charter for their corporate charter. The Open Charter is a legally binding corporate formation document stating a company’s commitment to open source and includes a series of objectives for meeting its open source commitment. Founders who elect to incorporate as a public benefit company will need to understand reporting responsibilities and consequences. ### Biennial Reporting Requirements At least every two years, Delaware Public Benefit Companies must provide its stockholders with a report on the company’s promotion of the public benefit specified in its corporate charter. The public benefit report should include information on: 1. Objectives established towards the promotion of the public benefit 2. Standards adopted to measure progress in those objectives 3. Information measured in alignment with those standards 4. Assessment of the company’s success in meeting objectives # Founder Offer & Equity An overview of the offer letter process and equity guidelines for OCV founders. Founders (CTOs and CEOs) are always hired as full-time employees. Salaried founders’ employment status should reflect their dedication to the company and help build investor confidence rather than adding unnecessary risk. Fundraising is about telling a compelling story that convinces investors why they should back a company. If a founder is a contractor rather than a full-time employee, it adds an extra layer of explanation that takes time and energy away from the goal: securing investment. Instead of spending valuable time overcoming that concern, we eliminate the issue by requiring founders to be full-time employees. ## Verbal Offer Letter After internal approval, OCV team prepares a verbal offer (via email). <details> <summary>Verbal offer details</summary> 1. Company Name (typically TBD) 2. Entity Structure (C-Corp or PBC) 3. Title 4. Annual Compensation in local currency (and \~USD equivalent) 5. Equity (% and vesting details) 6. Confirm whether founder would like to [purchase common shares](/company-ops/finance-ops/equity-ops#founder-share-purchase) or receive options 7. [OCV Funding](https://handbook.opencoreventures.com/company-formation/step-7-fund-the-business/) detail with note around SAFE dilution: *"Please note that the SAFE will convert into future preferred shares and will dilute all existing shareholders upon conversion. To protect potential dilution prior to the next round of equity financing, we’re reserving a X% options pool (for CEO and other employees)."* 8. Options Pool size 9. Target Start Date 10. Confirm purchase of existing domain name(s) for USD 1 (if applicable). </details> In this email, we also request founder’s mailing address, phone number, date of birth (for certain registration and banking system setup requirements). Once a founder provides verbal acceptance of our offer, follow the process outlined below to draft and send out an indicative offer letter via DocuSign. ## Indicative Offer Letter Founders will be employed by their company’s EOR provider. OCV sends out an indicative offer letter to document compensation, equity, and prior inventions (if any) in the ECIIAA. Founders will receive an official offer letter through EOR provider once the company has been formed in the weeks following receipt of their indicative offer letter. <details> <summary>Basic offer letter fields:</summary> * Founder name * Company legal name * Country of employment * EOR provider (as formal employer) * Position * Start date * Home office location * Employment status * Compensation * Equity </details> Founder offer letters will need to include the following information: **Compensation** * Base salary amount in local currency (use proper 3-letter currency label before amount) * Payment schedule (monthly in arrears) **Domain** If the Company is purchasing any existing domain names from the founder, include: > “The Company will purchase the existing domain names related to \[Open Source Project Name] for USD $1. These domain names will be transferred back to you in the event of a company wind down.” The purchase of domains by the Company will be reflected as part of the Founder Common Stock Purchase Agreement (Exhibit B - Assignment Agreement). **Equity** See below for OCV’s guidelines on founder equity. Equity section of the indicative offer letter must contain: > “All equity grants are subject to dilution with each new funding round.” As of May 2025, founder (CEO & CTO only) offer letters include terms for [double-trigger accelerated vesting](/company-ops/finance-ops/equity-ops#accelerated-vesting). ### Intellectual Property (ECIIAA) OCV offer letters will include a standard Employee Confidential Information and Inventions Assignment Agreement (ECIIAA), which complies with the [employee confidentiality and intellectual property rules](https://www.sec.gov/Archives/edgar/data/1029125/000143774920017410/ex_198816.htm) established at the federal level by the Securities and Exchange Commission. Prior intellectual property is typically something where the founder has existing IP protections such as a patent or trademark, this disclosure does not usually apply to the open source software a company. In addition, OCV offer letters will also include a non-solicitation clause in order to avoid potential conflicts of interest. ## Equity Guidelines {% hint style="warning" %} **Disclaimer - The following guidelines are:** 1. Subject to change 2. Not a guarantee that anyone will get any specific equity stake 3. Not necessarily a perfectly up-to-date reflection of current frameworks 4. Not going to impact past dealings. We will stick to the terms of previous arrangements regardless of whether they are higher or lower than the current framework. {% endhint %} ### CTO CTO equity follows a base-plus-additive model, starting at a minimum of 10% (in line with Y Combinator founder norms) and capped at 25%. Additional equity may be granted based on the following criteria: * +5% if the CTO is an active contributor to the open source project * +5% if the CTO is the original author of the open source project * +5% if the CTO is the first C-level hire and brings management or entrepreneurial experience All CTO shares vest over four years (48 months) with a six-month cliff and double-trigger acceleration. If OCV begins assembling a team before a CTO accepts their offer, the original equity offer remains valid for six months from the company's launch date. After that point, the offer is reduced by 5%. ### Founding Engineer In certain situations, OCV may start companies with a founding engineer instead of a CTO. In cases where we recruit a Founding Engineer from outside of the community, but someone with the potential to take on the CTO role at a future date, the standard equity package is 2.5%. If and when the Founding Engineer takes on the CTO role during the pre-Seed stage, the equity package will be reevaluated with a maximum total offer of 15% (inclusive of the initial 2.5%). Note: this role is not the same as the first engineering hire (someone who is not anticipated to take on the CTO role at a later date). Equity offers for first engineers follow the same process as Equity grant considerations. ### CEO OCV's standard model is to launch with a technical co-founder (CTO) first and recruit a CEO shortly after. CEOs joining post-launch receive stock options from the company's options pool rather than founder shares. In special circumstances, OCV may launch with only a CEO, or with both a CEO and CTO together. In those cases, CEO equity at launch would follow the same guidelines as the CTO. ### Founding Advisor A *Founding* Advisor — an advisor or project author who played a meaningful role in making the company launch a reality — is by OCV invitation only and is not a self-nominated process. For advisors joining after company formation, see [Advisors](https://handbook.opencoreventures.com/startup-manual/business-operations/advisors). Founding Advisor equity starts at a minimum of 0.25% and is capped at 2.5%, with additional allocation based on the following: * +up to 1.5% if the advisor is the original author of the project (assuming a single author) * +up to 0.25% if the advisor provides regular monthly advisory time * +up to 0.5% if the advisor is actively involved in building the business — for example, contributing to brand building, customer introductions, or recruiting. Note that open source contributions (merge requests) do not count toward this criterion. All advisor shares vest over four years (48 months) with a six-month cliff. ## O-1 Transfers {% hint style="info" %} **O-1 transfers are only available for company founders. Estimated Cost: $15,000 to $18,000** {% endhint %} O-1 visas are for individuals who possess extraordinary ability in the sciences, arts, education, business, or athletics, etc. O-1 visas can be transferred, and the transfer process may be easier if the beneficiary (i.e., founder) has a copy of the complete O-1 filing. It is favorable if the beneficiary has already been approved for an O-1 visa. The new O-1 filing will be separately assessed by USCIS. A US legal entity must be established first before an employment-based petition can be filed with USCIS. \[To be confirmed with legal team]: founders can still [purchase common shares during the company formation process](/ocv-employees/vc-ops/company-formation-process/issue-equity-and-options-pool). After the legal entity has been established, the company's EOR acts as the official sponsor and handles the full visa and legal process. The EOR charges an additional monthly fee for this service on top of its standard monthly fee. ### O-1 Visa Transfer Process The standard EOR processing takes 14 weeks from start to finish, though premium processing (for an additional fee) reduces this to about 10 weeks. The timeline varies based on information gathering and government response times for the transfer petition. Since O-1 is one of the most complex visa types, having a copy of the prior petition can significantly speed up the preparation process. <details> <summary>Transfer process:</summary> 1. Sign EOR engagement letter 2. Complete intakes 3. Attorney case kickoff call with case planning 4. Case building (8 weeks, or 4 weeks with fast-track) 5. Ship with premium processing (15 days) 6. Approval or request for evidence </details> # Company Name Tips on how to approach choosing a company name. Whenever possible, use the same name as the underlying open source project. From our experience, the lack of awareness of a new company name is often why the business fails to gain traction quickly in the market. A large number of resources are required to build a new brand, which is a marketing investment that detracts from product development in the early days. We recognize that naming the company after the open source project name may face trademark application hurdles. If the company can obtain trademark registration rights (to the open source project name), the company will extend a forever, royalty-free license to the project so the name lives on regardless of the outcome of the commercial company. The second-best option is to use a name associated with the open source project. For example, `Mermaid Chart Inc.` for the Mermaid open source project. If neither the exact name nor an associated name is an option (for instance, a foundation has the intellectual property rights to the open source project name), founders will choose a company name from OCV’s [name reserve.](https://docs.google.com/spreadsheets/d/1QImJP54BE7DWwYUUOe9ehGdahcjSJTBc29WtY5QNjWw/edit?gid=0#gid=0) ## Company name search criteria We run the following searches for a new OCV company name: 1. Domain availability: “.com” domains are preferred 2. Google: are there other companies using a similar name in the same or adjacent industry already? Try different sound-a-like spellings too. 3. [USPTO](https://www.uspto.gov/trademarks/search): are there existing trade name applications in the same class (typically, Class 42 - “Non-Downloadable Computer Software”) that could block a new registration? Try a few spelling variations too. Also check [WIPO Global Brand Database](https://branddb.wipo.int/en/quicksearch?by=brandName\&v=\&rows=30\&sort=score%20desc\&start=0&_=1682961900535). 4. [Delaware entity](https://icis.corp.delaware.gov/ecorp/entitysearch/namesearch.aspx): ensure no conflicts with existing entity names. 5. Trademark knock-out search by the Legal Team (generally takes \~2 business days). For companies that require a name from OCV’s reserve, domain name registration will be transferred to the company’s account after incorporation. OCV-generated company names will not contain specific domain language/keywords (for example, “Apple” or “Amazon”). Otherwise, it would be more difficult to differentiate from competitors and/or pivot the business in the future. These will also be unique, reasonably short, eligible for trade name registration / a “.com” domain name, and spelled as how you’d pronounce it (avoid misspellings). ## Domains <a href="#block-477e71191d3e42f58f5eb59046b47ec4" id="block-477e71191d3e42f58f5eb59046b47ec4"></a> Companies that can use the open source project name or a similar derivative should make the commercial website the go-to destination for both project and product information. See the website handbook for information on handling the open source project and commercial company websites. ### Domain purchase budget 1. B2B Companies: max of USD $5,000 2. B2C Companies: max of USD $10,000 ## Changing the company name <a href="#block-477e71191d3e42f58f5eb59046b47ec4" id="block-477e71191d3e42f58f5eb59046b47ec4"></a> If a name change is deemed critical for GTM reasons, a DBA (”[doing business as](https://www.law.cornell.edu/wex/doing_business_as_\(dba\))”) may be considered first. A DBA will trigger additional compliance and tax complications, which should be weighed in as part of the decision process. ### Filing a DBA A DBA need to be filed where a company’s offices are located and where the company intends to do business. As a company expands where it is doing business, additional DBA registrations will need to take place in those locations as well, increasing the complexity of the process. OCV companies seeking to do business under a new name through a DBA (not a legal entity name change) will need to file Fictitious Business Name (FBN) Statements in San Francisco and in Santa Clara counties (as of January 2026, all pre-Seed OCV companies have a physical address located in Santa Clara county). {% hint style="info" %} Note: The term “Fictitious Business Name” refers to the *new* business name (DBA name), not the existing (official) business name. Keep this in mind when filling out forms to avoid any delays in filing. {% endhint %} Legal Team will require physical, wet-signed copies of those statements, as well as a copy of the company’s updated tax registration certificate in San Francisco, which will be mailed to the company after updating the company’s name on the San Francisco business website. Additionally, Santa Clara County requires the publication of the new business name in a local newspaper. The Legal Team will help facilitate this process (typically takes 6-7 weeks). **Proof of a completed DBA filing will include:** 1. Stamped copies of the San Francisco and Santa Clara Fictitious Business Name Statements 2. An updated San Francisco tax registration certificate that includes the company’s DBA name 3. Proof of publication in Santa Clara. Given the requirements for obtaining physical copies and sequential steps, the timeline for completing a DBA may take one to three months. ### Legal entity name change In certain situations, for example, another organization holds trademark rights to your company's name, you may be required to change the corporate entity name legally. OCV (when serving as the board of directors) will only approve legal name change requests when deemed necessary. Below are steps required for a company name change process. <details> <summary>Checklist for legal name change</summary> <table><thead><tr><th width="475.625">Requirement</th><th>Responsible Party</th></tr></thead><tbody><tr><td><ol><li>Check availability of name in appropriate jurisdictions (DE and CA)</li></ol></td><td><p>Legal Team </p><p>(to reserve or hold the new name)</p></td></tr><tr><td><ol start="2"><li>Conduct trademark searches (and make appropriate reservations / filings) and domain name searches</li></ol></td><td><p>Company </p><p>(Legal Team can assist upon request)</p></td></tr><tr><td><ol start="3"><li>Draft Amendment to Charter with Name Change</li></ol></td><td>Legal Team</td></tr><tr><td><ol start="4"><li>Draft Board consent / obtain Board signature</li></ol></td><td>Legal Team </td></tr><tr><td><ol start="5"><li>Draft Stockholder consent / obtain Stockholder signature</li></ol></td><td>Legal Team</td></tr><tr><td><ol start="6"><li>Obtain signature and / file Amendment to Charter</li></ol></td><td>Legal Team</td></tr><tr><td><ol start="7"><li>Update qualifications as a foreign corporation (CA)</li></ol><p>File qualifications as a foreign corporation (other states required to be qualified)</p></td><td>Legal Team</td></tr><tr><td><ol start="8"><li>Notify IRS of the name change for Federal Employer Identification purposes via <strong>Official Letter</strong> OR <strong>Tax Return method</strong> (see separate section below)</li></ol></td><td>Tax Team or Company </td></tr><tr><td><ol start="9"><li>File Form DE-24 with the CA Employment Development Department informing the EDD of the name change, if applicable.</li></ol></td><td>Company</td></tr><tr><td><ol start="10"><li>Make appropriate patent and trademark filings, applications, PTO updates as necessary (including foreign)</li></ol></td><td><p>Company</p><p>(Legal Team can assist upon request)</p></td></tr><tr><td><ol start="11"><li>Contact any governmental agencies (federal, state or local) with which the Company has licenses / faces regulation to determine what actions need to be implemented </li></ol></td><td><p>Company </p><p>(Finance Team can support)</p></td></tr><tr><td><ol start="12"><li>Contact any regulatory bodies with which the Company has relationships (e.g. FDA, ITC, OSHA, US Customs, etc.) to determine what actions need to be implemented</li></ol></td><td><p>Company </p><p>(Finance Team can support)</p></td></tr><tr><td><ol start="13"><li>Obtain new business cards and letterhead</li></ol></td><td>Company</td></tr><tr><td><ol start="14"><li>Notify banks, key subscribers, landlords and any other relevant third parties informing them of the name change as required by such relationships </li></ol></td><td><p>Company </p><p>(Finance Team can support)</p></td></tr><tr><td><ol start="15"><li>Notify customers, partners, vendors, post office, etc.</li></ol></td><td>Company</td></tr><tr><td><ol start="16"><li>Revise form contracts, documents and marketing materials, including: stock option paperwork (including plan and forms), form offer letter and ECIIAA, form consulting and advisor agreements, form(s) of NDA, all other form documents</li></ol></td><td><p>Company</p><p>(Legal Team can assist upon request)</p></td></tr><tr><td><ol start="17"><li>Contact utility and phone directory providers</li></ol></td><td>Company</td></tr><tr><td><ol start="18"><li>Inform employees that, effective upon filing the Certificate of Amendment with the DE Secretary of State, all business should be conducted in the new name</li></ol></td><td>Company</td></tr></tbody></table> </details> ## IRS Notification of name change ### Standard method Send physical letter to the IRS via Certified Mail notifying the IRS of Name Change. IRS may take about month to respond with confirmation. <details> <summary>Letter Template</summary> <mark style="color:red;">\[Date]</mark>\ Via Certified Mail\ \ Department of the Treasury\ Internal Revenue Service\ Ogden, UT 84201-0012\ \ Re: Employer I.D. Number: <mark style="color:red;">\[Company EIN]</mark>\ <mark style="color:red;">\["New company name", Inc.]</mark> (formerly: <mark style="color:red;">\["former company name", Inc.]</mark> ) Dear Sir or Madam:\ \ This letter is to inform you that the name of the above-referenced taxpayer has been changed to <mark style="color:red;">\["New company name", Inc.]</mark> as evidenced by the enclosed filed-stamped copy of the Certificate of Amendment to the Certificate of Formation as filed with the Delaware Secretary of State on <mark style="color:red;">\[Date of Amendment Filing]</mark>. Please update your records accordingly. Please contact me at <mark style="color:red;">\[founder email]</mark> if you have any questions. Thank you very much.\ \ Sincerely,\ <mark style="color:red;">\[Founder Name]</mark> </details> Also print and include in the envelope a copy of the stamped Delaware Certificate of Amendment (provided by Legal Team). ### Tax Return method If you are currently preparing for an upcoming tax return, then the Tax Team can usually help submit the name change on the tax return itself. Double check with the Tax Team for eligibility and provide the team with the Certificate of Amendment to file along with the tax returns. # Incorporation Documents Paperwork and filings required to legally incorporate a new OCV company, including the process and information required to file. ## Process Our incorporation process generally entails the following sequential workflows: 1. OCV provides information required for incorporation docs to the Legal Team. 2. OCV reviews draft incorporation documents and signs final versions, including Form SS-4 and required CA filings. 1. Founders will need to sign their Share Purchase Agreement(s) and other corporate forms as required at this time. While these would not block Steps 3-5 below, they impact the timing of the [Founder Share Purchase Process](/ocv-employees/vc-ops/company-formation-process/issue-equity-and-options-pool) and [OCV Funding](/ocv-employees/vc-ops/company-formation-process/funding), which is a gating item for [Systems Setup](/ocv-employees/vc-ops/company-formation-process/systems). 3. Legal Team files Certificate of Incorporation with Delaware’s Secretary of State. 4. Legal Team applies for an EIN with the IRS. 5. Legal Team files California Designation by Foreign Corporation and Statement of Information (initial) with the California Secretary of State. 6. Legal Team provides filed copy of the Certificate of Incorporation & EIN to OCV. 7. Legal Team prepares and files in California: 1. CA 25102(f) Notice - for founder / common stock issuance 2. CA 25102(o) Notice - for the company’s equity incentive plan 3. CA S\&DC-SN - Statement and Designation by Foreign Corporation 4. CA SI-550 - Secretary of State Statement of Information 8. Once the common share purchase is complete and funded, the Legal Team prepares the SAFE agreement for OCV to review and execute. 9. Once safe funding is complete, the Legal Team prepares and files the CA 25102(f) Notice for OCV SAFE. ### Information Required for Incorporation <details> <summary>Information checklist:</summary> 1. Company name 2. Brief business description 3. Entity structure (C-Corp or PBC) 4. Information from initial systems associated with the company 1. Company address 2. Registered Agent address 3. Service of Process (name of the Registered Agent) 4. Company's billing email 5. Incorporator: OCV 6. Initial Director: OCV (single director on the company’s [board of directors](https://handbook.opencoreventures.com/how-we-work/board-of-directors)) 7. Corporate Officers: title, name, address (including state & country), email, phone number 8. Executed Founder Offer Letter and ECIIAA 1. Including Founder-specific non-solicitation clauses 9. Whether Founder(s) will purchase common shares (recommended) or receive options 10. Whether the company will purchase any existing domain names from the founder for USD $1 11. Initial Capitalization Table, including information on equity ownership, vesting, and [options pool](/ocv-employees/vc-ops/company-formation-process/issue-equity-and-options-pool) 12. [Funding detail from OCV](/ocv-employees/vc-ops/company-formation-process/funding), including information on the amount of funding and structure 13. Request for a physical address authorization letter 14. Timing: draft review date and expected launch date </details> ### Incorporation Documents <details> <summary>Document checklist:</summary> 1. Formation Documents: 1. Action by Written Consent of Sole Incorporator 2. Bylaws 3. Certificate of Incorporation 1. C-Corp: single class common 2. PBC: dual class common 4. Initial Action by the Board of Directors 5. IRS Form SS-4 (EIN Application) 6. Stockholders Consent - 202X Equity Incentive Plan & Indemnification Agreements 2. OCV Signature Packet: 1. Common Stock Purchase Agreement 2. ECIIAA - for OCV officers 3. Indemnification Agreement - for OCV officers 3. Founder Signature Packet: 1. Common Stock Purchase Agreement 2. 83(b) Election Forms - if purchasing shares 4. Equity Incentive Plan: 1. 202X Equity Incentive Plan 2. Form: Early Exercise Stock Purchase Agreement - early exercise is only available to founders 3. Form: Restricted Stock Award Grant Notice (Cash) 4. Form: Restricted Stock Award Grant Notice (Services) 5. Form: Stock Option Grant Notice (US) 6. Form: Stock Option Grant Notice (Non-US) 5. Address Verification Letter 6. State Filings: 1. CA Qualification S\&DC-SN: Statement and Designation by Foreign Corporation 2. CA SI-550: Statement of Information 3. CA 25102(f): Notice of Issuance of Securities (Common Stock) 4. CA 25102(f): Notice of Transaction (OCV SAFE) 5. CA 25102(o): Notice of 202X EIP (Equity Plan) 7. Template Corporate (Toolkit) Forms: 1. Advisor Agreement(s) 2. Consulting Agreement(s) 3. Employee CIIAA (CA & Multi-State) 4. Exempt Employee Offer Letter (CA & Multi-State) 5. Indemnification Agreement 6. Non-Disclosure Agreement (One-Way & Mutual) 8. OCV SAFE Financing: 1. Board Consent 2. Post-Money SAFE Financing Form 3. SAFE Side Letter </details> # Issue Equity & Options Pool Founder share purchase process and the establishment of the company's options pool, including how both are sized and structured. ## Founder Share Purchase Founders are recommended to purchase (for a nominal amount) common shares in OCV companies instead of receiving options. This is, however, dependent on each founder’s personal tax situation. It is advised for founders to seek tax counsel from professionals who are experts in working with founder equity in venture-backed startups. When a company issues common stock, it sells ownership stakes in the company differently than it would to investors. The price of purchasing common stock is nominal for the company’s founders but may change over time with employees (see [409A Valuation](https://handbook.opencoreventures.com/company-ops/finance-ops/equity-ops-reporting/409a-valuation)). The wiring of funds to execute the share purchase agreement needs to be completed before OCV SAFE funding. See [Visa Sponsorship](https://handbook.opencoreventures.com/company-ops/people-ops/recruiting#visa-sponsorship) if work visa transfers are required. ### 83(b) Election OCV team will confirm the common share purchase is complete and email the founder to start this next step. Filing an IRS 83(b) Election is extremely crucial for founders and the company. Failing to do so has significant tax implications to both. 83(b) elections are required to be filed only if/when: 1. A stockholder purchases common stock subject to vesting (i.e., typical OCV founder shares issued during the company formation stage); or 2. if an option holder [early exercises](https://handbook.opencoreventures.com/company-ops/people-ops/employee-compensation-and-benefits/equity-compensation#stock-options) an option that is subject to vesting. 83b Election form needs to be completed by the founders and sent to the IRS (via certified mail with return receipt) or submitted electronically on the IRS website within 30 days of the effective date of the stock purchase agreement (the date wires are sent). When filling out the 83(b) form, it will ask what date the shares were transferred to the founder — this is the same date the founder purchased their shares. For electronic filing, create a profile on the IRS.gov website, and fill out Form 15620, i.e. Section 83(b) Election, using information provided in your 83(b) document. Once complete, take a screenshot of the submission completion page as evidence of the date, though the form is instantly transmitted. For physical mail, while digital signatures are accepted by the IRS, OCV recommends printing and completing the form with a wet signature to remain compliant regardless of any IRS process changes. A self-addressed return envelope needs to be included as well. As part of the company formation process, the Legal Team will provide the latest instructions and template form for 83(b) Election. For non-US founders, OCV will assist with creating a FedEx return label to be included with the self-addressed return envelope. The appropriate IRS office to send the election to can be found at the [IRS website](https://www.irs.gov/filing/where-to-file-addresses-for-taxpayers-and-tax-professionals-filing-form-1040) (those with no payment enclosed). Non-US founders should use the following address: > Department of the Treasury\ > Internal Revenue Service\ > Austin, TX 73301-0215\ > USA To document the completion of this process, founders must provide the following three items to the company’s legal team via e-mail: 1. A copy of the completed election form 2. Proof of certified mail sent to the IRS (such as a photo of a receipt with tracking number), postmarked within the 30-day deadline 3. Proof of a self-addressed return envelope from the IRS ## Stock Options Options give the holder the right to buy common stock at a specified price for a certain period of time and may be used as a form of compensation for employees and advisors. Though options are a right to buy common stock, they are not the same as actual shares of stock. Common shares are reserved for founders, employees, and other stakeholders. ## Establish Options Pool Each company will establish an options pool for employee equity grants. The size of the initial pool depends on the Day 1 team composition of the company. To prevent unintended dilution prior to the next capital raise, our goal is to reserve a sufficient allocation for all required hires (including executive roles). Typical size of options pool at an OCV company is 20%, consisting of 10%-15% for future CEO reserve and rest for employees. Following conventional venture practice, the options pool will reset with each additional round of financing. The size of the new options pool at the Seed round depends on the founding team, future investor, and OCV inputs. # Funding SAFE structure used to fund OCV companies. ## OCV SAFE OCV funds up to $2M per company via a [SAFE](https://www.ycombinator.com/blog/announcing-the-safe-a-replacement-for-convertible-notes/). OCV SAFE's do not include discounts or valuation caps. Ensure the SAFE letter is signed before any wires are made. Note: OCV can only initiate a wire for SAFE funding after the founder share purchase process has been completed. Once SAFE funding is complete, the OCV team will confirm completion with the Legal Team. The Legal Team will prepare and file the CA 25102(f) Notice, which accepts digital signatures. ### SAFE Side Letter OCV SAFEs will include a side letter with the following notes: > "In the event that the Company negotiates a term sheet or letter of intent in connection with the Equity Financing or a debt financing, the Company shall not, without the Investor’s prior written consent, include any provision in such term sheet or letter of intent promising the issuance of equity awards to the Company’s officers, directors, employees or consultants.” > “In the event that the Company, directly or indirectly, by amendment to the Company’s organizational documents, merger, consolidation or otherwise, creates or authorizes the creation of or authorizes the issuance of any simple agreements for future equity and/or convertible notes (together, “Convertible Securities”) that (i) exceed $400,000 in the aggregate (excluding the Convertible Securities held by Investor) (the “Additional Convertible Securities”) and (ii) contain terms more favorable than those of the Convertible Securities held by Investor, then the Company agrees to amend and restate such Convertible Securities held by Investor (including the Investor’s Safe), at Investor’s sole discretion, to be identical to the instrument evidencing the Additional Convertible Securities.” # Systems Overview of systems that OCV Ops establishes throughout the formation process, which founders will rely on to run the business. Systems setup is kicked off immediately after the entity structure is chosen and progresses simultaneously with legal processes. During the company formation stage, OCV companies follow a set of standard systems to ensure a smooth and efficient launch process. ## Initial Systems Some initial systems are required to initiate the [legal entity formation process](/ocv-employees/vc-ops/company-formation-process/legal-entity-structure); these include: 1. **Domain name:** May involve registration of a new name or the transfer of an existing name owned by the founder 2. **Company email:** Founder email address and group emails for the company’s support teams 3. **Virtual Mailing Address:** To be used for the majority of business purposes. A physical address will only be used in certain cases, where required, such as KYC for banking 4. **Registered Agent:** Point of contact with the state, ensuring that important documents like lawsuit notices (service of process) and compliance deadlines are reliably received and forwarded 5. **Foreign Qualification (if applicable):** Registration in additional state(s) in order to operate legally outside of where the company is incorporated (e.g., employee residing in the state) ## Banking & Credit Card Setup OCV will set up a bank account for the company and manage the [SAFE funding process](/ocv-employees/vc-ops/company-formation-process/funding). Additionally, a corporate credit card account will be created for the company to manage payments and expenses. CTOs will have full access to these accounts as designated Control Persons and may be required to complete KYC steps as part of the bank and credit card application process. ### Beneficial Ownership A beneficial owner is an individual who owns 25% or more of the company in question either directly or indirectly, including founders. ### Control Person The CEO should be named the Control Person for the new company's finance system applications. If there is no CEO, then the company's named CTO. Any one single individual with significant responsibility for managing the company, such as an executive officer, managing member, general partner, or vice president. ## Additional Core Systems After SAFE funding, additional core systems will be set up. These include: 1. EOR account for payroll and as an HRIS 2. Equity management account 3. Secure password management vault ## Optional Business Tools ### DUNS Number A DUNS (Data Universal Numbering System) number is a unique nine-digit identifier issued by Dun & Bradstreet to track global business entities. It helps establish a company’s credibility, enables access to government contracts, and is often required for partnerships or credit applications. Businesses use it to streamline identity verification and build trust with vendors and clients. A DUNS number is offered for free by [Dun & Bradstreet](https://www.dnb.com/en-us/smb/duns/get-a-duns.html). To obtain one, simply register and create an account on their website. It typically takes about 30 days for the number to be issued. This number can be created as needed at the CEO's discretion. If a DUNS number is obtained, we ask the CEO to share it with OCV so it can be logged in the Ops platform for reference. ### Publicly Listed Phone Number Beyond the virtual telephone number that founders receive during system setup, companies sometimes need a publicly listed phone number. You can create an additional line through the virtual telephone system as needed — just be aware that these numbers tend to attract sales calls. # Wind Down If a company is unable to raise a successful Seed round, we may choose to wind down. A company wind down refers to the process of closing down a business entity. This process typically involves the selling off of assets and the distribution of proceeds to creditors and shareholders. In planning a company wind down, keep in mind that corporate officers have a fiduciary duty to the business and investors. ## Taking care of employees One of the first steps in the wind down process is to notify employees of the company's closure. This should be done as soon as practical to allow employees time to find new employment opportunities. [Termination agreements and payments](/company-ops/people-ops/offboarding#terminations) may be offered to employees as part of the wind down process. ## Taking care of customers Customers should be notified as soon as possible and provided with information on how their existing contracts or agreements will be impacted. It is advisable to work with customers to find alternative solutions or providers if possible. If refunds are owed to customers, they should be processed promptly and fairly. Open communication and transparency can help to minimize any negative impact on customers and maintain positive relationships for the future. In general, it is advised to follow the termination notice provision of any contracts and, if possible, get confirmation from the counterparty of any amounts owed. If any amount involved were large, consider getting a release signed. ## Creditors (debt and safe notes) Creditors must also be notified of the company's closure and given the opportunity to file claims for any outstanding debts. The company's assets will be sold off in order to pay off these debts. In a company wind down, holders of Simple Agreement for Future Equity (Safe) notes are typically treated as creditors. This means that they are entitled to receive any proceeds from the sale of the company's assets after all outstanding debts have been paid. However, because safes are not equity, they do not confer ownership in the company and do not entitle holders to any control or decision-making power. As such, being a holder of a safe alone may not alone confer a say in the decision to wind down the company or the terms of the wind down process. The [company’s board](/how-we-work/board-of-directors) which will have a direct input into decision making. If the company has preferred shares, liquidation preferences for preferred shareholders are also treated as debt. Depending on the specific rights and preferences of the preferred shares, preferred shareholders may be entitled to a pro-rata of the residual proceeds in addition to their liquidation preference. ## Shareholders (residuals, if any) Once all debts have been paid, any remaining funds will be distributed to shareholders. If there are no remaining funds, the company will be officially dissolved and removed from any relevant registries.In the context of an OCV startup wind down prior to Seed round, the likelihood of any residual available for common shareholder distribution is low. ## Wind down process checklist <a href="#block-d5717a34f6e246d29f81961cba8e9e5a" id="block-d5717a34f6e246d29f81961cba8e9e5a"></a> **Responsible individuals for wind down execution:** Company CEO (or CTO) As board-appointed officers, CEO and CTOs can continue to provide services to the company post termination of employment agreement under an EOR and will have legal authority to execute duties on behalf of the company. The company will need to determine a reasonable coverage period for the CEO to carry out wind down activities. ## 1. Internal announcement Notify employees of the copmany's wind downs status. Work with the company’s EOR and the Finance Team to determine termination-related statutory obligations such as: 1. **Contractors:** Termination notice-period (or payments in lieu of notice) + any other potential required payments 2. **Employees:** Termination notice-period (or payments in lieu of notice) + other required payments + healthcare obligations (if any) The company’s EOR considers terminations of greater than 3 people to be “mass terminations” and will charge a consulting fee for helping facilitate the process. Notice periods may not be considered to have legally started until the preparation of legal documents has been completed and presented. There are limitations on the timing for EOR preparation of these documents but speed is also an important factor in how much the company may need to pay employees. 1. ⚠️ At a minimum, companies must satisfy all of the minimally required employee-related obligations at wind down. Otherwise, company officers will be personally liable. 2. Additional consideration: 1. If remaining cash balance (after statutory requirement above) allows for additional supplemental considerations such as a severance package, work with the finance team to create a proposal for reasonable additional supplemental considerations for board approval which is balanced with fiduciary duties to investors. 2. Work with the EOR (and legal team where needed) to prepare termination agreements with a company release waiver or release of claims. 1. A release of claims is a requirement for employees and contractors to receive any additional consideration beyond the company’s contractual obligations. 1. Specific terms in the release may require additional legal review. For example, in the U.S., employees who are 40+, must be provided 21 days to consider the agreement (but do not need to be employed during that time), and then once signed, they have 7 days to revoke it before it becomes effective (in any group termination of 2+ employees as part of the same employment action, employees who are 40+ must be given 45 days to consider the agreement, instead of 21). Employees under age 40, only need to be given 5 business days to consider the agreement, and the agreement is effective immediately upon signature. 2. The company’s EOR will prepare termination agreements (and release forms if applicable). 3. In the event that the EOR does not have its own release of claim forms for U.S. contractors, use this[ template form](https://docs.google.com/document/d/1-GzlD59ojDf-19bPiShcq3R17okorcEe/edit?usp=sharing\&ouid=114605482382680978191\&rtpof=true\&sd=true). Additional consideration to contractors should be called “termination payment”, not “severance”. 4. Severance is generally paid out within 10 days of the effective date, but it can also be structured as salary continuation and paid over-time. Work with the company’s EOR to determine a reasonable payment method. 3. Consider having employees purchase their company laptop for a nominal amount for a nominal deduction from the total payments ($1) or returning their company laptop. 1. Work with the EOR to ensure termination agreements reflect this. 2. Ensure the removal of confidential information by overseeing a factory reset. 4. Under an EOR relationship, it is possible the EOR will recommend an amount for additional consideration to ensure mutual termination (and prepare Mutual Termination Agreements or MTAs) for both themselves and for employees and avoid potential litigation in countries where risks associated with terminations are higher. 1. Balancing fiduciary responsibilities with such requests should leverage appeals to employees' sense of fairness if total payments are high and not aligned with payments to others owing to their geographic location. 2. The priority for the EOR is ensuring employees are comfortable with mutual termination terms and not any specific amount of consideration. 3. On announcement day, host a company-wide session first, then schedule 1:1 conversations and deliver separation packages with MTAs (along with release forms if applicable). 1. Recommended practice is to announce wind down after all the termination paperwork has been prepared so employees can review their separation agreements during 1:1 sessions. 2. Consultation with local legal entities and legal teams partnered with the EOR platform may take some time to prepare legal documentation around separation. It may be necessary to have conversations with individual team members about their specific separation agreements as they become finalized which may lag relative to a wind down announcement. 3. See additional details at[ Communication plan](https://www.notion.so/Communication-plan-2aa46dc888de4e80a5c02310aaceae57). 4. Save termination paperwork and release of claims with the EOR and a designated company archive drive. There is a 6-year employee record retention requirement. 5. External announcement - customer & vendor notification 1. Timing on customer announcement should proceed when employees have been notified of the wind down and a plan is in place for ceasing operations. This is not necessarily when employees have signed termination agreements. 2. Customer communication 1. Basic criteria to include 1. The date your business will close 2. The manner in which you'll handle clients' orders until the close date 3. Options for transferring clients' records to their offices or your competitors 4. Competitors you recommend 2. Draft announcement message to include customers: 1. To \[customer name], After \[number of months] in business, \[Company name] has decided to wind down operations and close the company. We can’t fully express our deep gratitude for your business and support. Our last effective day of operation with be \[date of closure]. Until that date, your account will continue to operate as normal. Until then, we will be available to help you save or transfer any projects, assets, and data from the system. We’ve gathered a list of recommended \[Company name] alternatives to help your transition: 1. Company A 1. Company B 2. Company C We kindly ask that any outstanding invoices are paid in full by \[payment date]. Please get in touch with us at \[contact] with any questions or comments. We’re committed to making this transition as smooth as possible for you. Sincerely, \[Your name] \[Title], \[Company name] 3. Vendor communication 1. Basic criteria to include: 1. Last date of service 2. Quote any relevant sections of the contract termination clause 3. If service was great, offer to write a recommendation 2. Draft announcement for vendors 1. *To \[vendor name]*\ \ *I’m writing this letter to formally inform you that \[Company name] is shutting down effective \[closure date], and we will no longer require services provided by \[vendor name].*\ \ *\[Reference contract terms - these will either have the option to cancel before the expiration of the contract or be time-bound. If time bound, ask to end the contract at the end of the month of the company closure.]*\ \ *I want to express gratitude on behalf of \[Company name] for the service \[Vendor name] provided. I would be happy to give a positive testimonial as thanks for your great service.*\ \ *If you have questions, please contact me at \[contact info].*\ \ *Sincerely,*\ *\[Your name]*\ *\[Title], \[Company name]* 6. Systems: 1. On internal (employee) announcement day, have a process in place to turn off employee access to company systems and corporate cards. 1. If employees opt to purchase their work laptops, reset the hard drive to remove all company data. 2. Cancel all subscriptions and ongoing vendor contracts that are no required during the wind down period. 1. Typical systems examples: 1. ATS - for OCV team to disable 2. Calendly 3. GitHub Enterprise 4. LinkedIn Sales Navigator 5. Scarf 6. Zendesk 7. Zoom 2. Save relevant files to the company shared drive for archive before shutting down third-party systems if needed. 1. Examples: 1. [Carta](https://handbook.opencoreventures.com/stock-options/#553ace4e20474a27828ef92ef1ab2ec0) 3. Essential systems should not be canceled until after legal dissolution has completed: 1. Bank accounts 2. Registered agent service 3. Tax accounts 4. Accounting and bill processing software 5. Corporate credit card account and credit card tied to key systems only 6. Shared drive and email service provider 7. Virtual mailing address service 7. Legal: Dissolution Filing 1. Work with the legal team to file dissolution paperwork in DE and CA (and any other registered states / jurisdictions). The process of preparing dissolution paperwork takes around 2-3 weeks in general. Cost ranges between $10,000 and $25,000. 1. We generally opt for “short form” dissolution, which requires the company to pay or reserve for all current creditors and others whose claims will arise over the next 10 years. A thoughtful exercise should be conducted in assessing the likelihood any other claims arising, but the company is not required to keep a bank account open for 10 years. The assessment process is designed to ensure all creditors are identified and paid or reserves are established to cover them prior to distributions to shareholders. 2. The alternative, “long form” option, involves the company sending written notices of the dissolution and running a formal claims process, with the potential for taking any disputes over claims or security for contingent claims to the Delaware Chancery Court. 2. *Delaware General Corporation Law, Code Section 278:* Once the company files its Certificate of Dissolution, it is allowed to continue only for the purpose of “gradually to settle and close their business, to dispose of and convey their property, to discharge their liabilities and to distribute to their stockholders any remaining assets, but not for the purpose of continuing the business for which the corporation was organized”. 3. See dissolution due diligence checklist[ ](https://docs.google.com/document/d/1-5zahUcML3wTDtzGshBdg4kGxlhPdmK8/edit?usp=sharing\&ouid=114605482382680978191\&rtpof=true\&sd=true)[HERE.](https://docs.google.com/document/d/1wgha6HqxR8TYc1K0CHlLmSH2Doq4ww-n/edit?usp=sharing\&ouid=107942914385929616269\&rtpof=true\&sd=true) 4. Paperwork for signatures and procedures will be prepared by the legal team including: 1. Board Consent: e-signature 1. The board consent relating to the dissolution of a company will transfer titles over to the company’s sole Director. The title of President will be transferred to enable backup signing authority. 2. The board consent can also outline the plan for dissolution of the company. 2. Stockholder Consent: e-signature 1. The stockholder consent will usually outline the plan for dissolution of the company. 2. Part of the plan in dissolving the company will involve appointing a liquidation manager. This position will procedurally implement the plan for liquidation associated with the dissolution that has been outlined. The position of liquidation manager will usually be transferred to the company’s sole Director in order to ensure dissolution paperwork which can take a significant amount of time to fully wrap up can proceed without delay. 1. There are some instances where the liquidation manager will need to exercise discretion around ambiguous items. In the rare scenarios where discretion in the decision making of a liquidation manager has a potential conflict of interest in assuming the role, this can be minimized through outlining the plan more explicitly in the consent to minimize ambiguity but in situations (though there can be practical complexity in implementing a consent to outline this in some instances). 3. Consents for dissolution should take place after company business operations have ceased and the the company exists only to facilitate remaining steps for winding down. 4. Delaware Certificate of Dissolution: e-signature; legal team will handle filing along with the Delaware Annual Tax Report via a Delaware filing agent. 1. For companies which are based in DE, lingering cancellation (not dissolution) of registrations in any other states should be resolved prior to filing any DE dissolution as those cancellations may be contingent upon the persistence of the DE entity. 5. (Current Year) Delaware Annual Tax Report: e-signature; include gross asset value. The legal team will file this along with the Certificate of Dissolution via a Delaware filing agent.\ Note: the amount at the bottom of Page 2 is not reflective of the amount owed by the Company: 1. The form is generated by the State and legal team cannot change the number, which is based on the number of authorized shares. 2. That amount will be re-calculated at the time of filing using the Gross Asset value provided, which should lower the amount. Legal team’s filing agent will advance the tax payment at the time of filing and include that amount in their invoice. 1. By default, Delaware will calculate the franchise tax amount owed by using the authorized shares method which will result in a high tax burden for companies with a large number of shares. 1. The default amount owed listed on the tax report is not necessarily what the company will owe via this method given that as the report is filed there is the option to choose between the two methods of tax payment. 2. Calculating the DE franchise tax by the authorized shares method has a tax of: 1. $175 for companies with a number of authorized shares of 5,000 or less 2. $250 for companies with a number of authorized shares between 5,000 and 10,000 3. $250 and $85 per additional 10,000 authorized shares for companies with a number of authorized shares above 10,000 2. An estimate of gross assets will be used for determination of franchise tax amount via the assumed par value method. 1. This method will usually be preferred to the authorized shares method as it is usually a couple of hundred dollars as opposed to usually thousands for the other method for early stage startups. 1. Minimizing the gross assets of the company prior to filing this report is usually unnecessary. 6. IRS 966 Form (also see Taxes section below) - once the Stockholder Consent is executed, work with the tax team to prepare and submit this form along with a signed copy of the Stockholder Consent. Form 966 is due within 30 days after the Stockholder Consent is fully executed. This form is informational to the IRS about the company’s intent to dissolve. 1. The mailing of Form 966 is due within 30 days and filing to the IRS should be mailed via certified mail for proof of mailing date (receipt to be shared with the tax team). The form should be filed to the IRS office where the company pays its taxes. 1. For OCV companies, the appropriate office for filing Form 966 will be: \ Department of Treasury\ Internal Revenue Service\ Ogden, UT 84201-0002 7. California Certificate of Surrender - manual ink signature required; send PDF copy to legal team and they will handle filing via filing agent after final tax returns have been filed with the IRS and California (as applicable). 1. The filing of the Certificate of Surrender occurs at the end of the legal and tax dissolution process, when there are no remaining activities to conduct in California and the company has filed federal and state final tax returns (masked as “final”). 2. Legal team will execute filing this when appropriate. It takes a couple of weeks to receive a file stamped copy back from CA SOS. 8. Sale of other assets: 1. An unlikely scenario prior to Seed round for OCV companies. 9. Taxes: 1. Work with tax team to ensure any tax filings for the prior tax year are wrapped up 2. File[ Form 966 (Corporate Dissolution or Liquidation)](https://www.irs.gov/pub/irs-pdf/f966.pdf) within 30 days of filing dissolution paperwork (see above). 3. Work with tax team to prepare and file final corporate income tax return (Form 1120) and payment(s) 1. Final tax return fees would be around the same as a standard annual return 4. Work with the tax team to prepare and file final state returns and payments. See IRS checklist here:[https://www.irs.gov/businesses/small-businesses-self-employed/closing-a-business](https://www.irs.gov/businesses/small-businesses-self-employed/closing-a-business#Keep) 10. Purchase “tail policy” business insurance (if applicable) 1. A “run-off” or “tail policy” is an endorsement that goes onto the current D\&O insurance policy. It protects directors and offers from personal financial exposure 2. Premium tends to be \~1.5x annual insurance premium 1. Additional information: <https://www.thehortongroup.com/resources/tail-policies-101/><https://woodruffsawyer.com/do-notebook/corporate-dissolutions-do-protection-considerations/> 11. Records retention: 1. Follow guidance and requirements provided at: [https://www.irs.gov/businesses/small-businesses-self-employed/closing-a-business](https://www.irs.gov/businesses/small-businesses-self-employed/closing-a-business#Keep%20Your%20Records) 1. As of November 2023, default retention period for OCV company files is 7 years. 2. OCV will create an “Archive” drive for the company and move company files here for the required retention period. 2. Required files checklist: 1. Corporate legal documents (formation, dissolution, board consent, key contracts, etc.) 2. Bank statements 3. Employment tax records (from Company Payroll System) 4. Equity documents (from CapTable Management System) 5. Corporate expenses for IRS audit support (from Corporate Credit Card System and Bill Pay Process System). 6. Back up of records and attachments from the Accounting System 12. After all legal and tax items have been completed, ensure all remaining core systems are closed down and that all outstanding invoices representing credits to the company have been paid. 1. It may be necessary to have certain filings or systems be fully paid off and finalized at a later date (e.g. 1099s for legal and tax teams) which are minimal and otherwise not processable quickly. These can be processed by the company’s controller at a later date with the necessary funds to cover this distributed via the company’s bank account (with a memo indicating the purpose) to the appropriate parties preemptively. 1. Reminders will help ensure finalization of these closures 13. After all credits have been satisfied the company will distribute remaining funds to shareholders via the company’s bank account (with a memo indicating the purpose). 14. After funds have been distributed back to shareholders, the company can close down its bank account. # Fund Formation Page Summary: This section outlines the general process and flow to launch a new OCV Fund. ## Fund Entities 1. Open Core Ventures (OCV) Fund \[#] GP LLC 2. Open Core Ventures (OCV) Fund \[#] LP Engage the Legal Team to create fund formation documents and required filings for both fund entities. **For the GP LLC entity, determine and provide:** 1. Name(s) of General Partner(s) 2. Operating agreement terms (if different from standard/market terms) 3. Economic assignees and allocations (note if anyone is using a trust or entity name) 4. Vesting details **For the LP entity, determine and provide:** 1. Total committed capital amount 2. General Partner (LLC) contribution % 3. Limited Partner contribution % 1. Committed capital details of the known limited partners 4. Fund life: industry standard 10 years, option to extend for an additional 2 years with GP / LP agreement 5. Management fee details 6. Carry details 7. Fund expense details 8. Fund reporting (”Books and Records”) details (frequency of audited or unaudited financial statements provided to LPs) Both fund entities use the same Registered Agent Service and OCV’s primary mailing address. ## Registrations & Filings While the Legal Team is drafting the detailed Limited Partnership Agreement (LPA) and fund Subscription Agreement, they can file Delaware registrations first in order to obtain EINs for the two entities. EINs are required for [bank accounts](https://handbook.opencoreventures.com/fund-formation/#block-1defeb7b074d807ca898f3cd84eb6637) and fund admin setup. 1. Delaware 1. GP LLC Entity: Certificate of Formation and Form SS-4 (for EIN) 1. Both signed by the General Partner 2. LP Entity: Certificate of Limited Partnership and Form SS-4 (for EIN) 1. Both signed by the General Partner 2. California 1. Application to Register a Foreign Limited Liability Company (LLC) 2. Application to Register Foreign Limited Partnership (LP) These applications are signed by the General Partner and name the same Registered Agent Service as DE filings. <mark style="background-color:$warning;">The Legal Team files for foreign qualification in CA. The OCV team provides CA-certified copies to the Registered Agent Service.</mark> 3. EDGAR: For the EDGAR Account (EDGAR access codes) Application, the General Partner is required to sign: 1. Services Acceptance Letter (e-Signature) 2. POA for Account Administrators (wet signature and notary required) 3. Form ID (wet signature and notary required) 4. Form ADV 1. Filed at the Management Company level to cover all funds managed 2. The Advisers Act has an exemption for family offices. If requirements are met, then the Form ADV would not need to be filed until 60 days after accepting outside investors <mark style="background-color:$warning;">As of May 2025, OCV Funds fall under</mark> [<mark style="background-color:$warning;">Exempt Reporting Adviser (ERA) rules</mark>](https://carta.com/learn/private-funds/regulations/exempt-reporting-adviser/) <mark style="background-color:$warning;">as venture capital fund advisers. According to</mark> [<mark style="background-color:$warning;">SEC regulations</mark>](https://www.ecfr.gov/current/title-17/chapter-II/part-275/section-275.203\(l\)-1)<mark style="background-color:$warning;">, a venture capital fund is one that:</mark> 1. Does not invest more than 20% of the fund’s committed capital in non-qualifying investments, such as debt, secondaries, public issuances, fund-of-fund investments, or digital assets 2. Restricts borrowing (and all other leverage) to no more than 15% of the fund size, and repays any leverage-related debt within 120 days 3. Limits LP redemption rights (the ability of investors to cash out of the fund) to “extraordinary circumstances.” 4. Represents to investors that it pursues a venture capital strategy within these boundaries {% hint style="danger" %} **IMPORTANT** Consult with the Legal Team on compliance-related items when there are substantial changes to fund strategy, structure, LP base, and investment team, etc. These may trigger additional registration requirements. {% endhint %} ## Bank Accounts Once the Legal Team provides EINs for the GP and LP entities, contact the Bank’s Fund Services team to open a bank account for each entity. Each bank account application requires: 1. EIN 2. W-9 Form (latest from IRS website) 1. Check “Partnership” for LP entity 2. Check “LLC” for GP LLC entity; enter P (partnership) for tax classification 3. Control Person details (including ID upload) 4. Beneficial Owner(s), including ownership %s, and their KYC details (including ID upload) 5. All authorized persons for the bank account to sign the application After the bank accounts are set up, work with the Banking Team to determine whether an Insured Cash Sweep (interest-bearing) add-on product would be appropriate. ### Fund Admin OCV uses a fund administrator for all funds. Notify the fund administrator to discuss the new service contract and setup. Ensure the fee structure aligns with Fund I fee structure. ### Registered Agent Service Notify OCV's Registered Agent Service Provider to make any necessary updates in State Annual Reports. <br> # Legal Matters Page Summary: Legal matters around company incorporation, term sheet, and financing. ### Incorporation paperwork <a href="#block-ba1446f4b519478bba8bd7fbdeed8e90" id="block-ba1446f4b519478bba8bd7fbdeed8e90"></a> See[📄Step 3: File incorporation paperwork](https://handbook.opencoreventures.com/ocv-employees/core-vc-operations/portfolio-company-formation-process/incorporation-steps-1-8) ### Term sheet <a href="#block-8395eeb05f6e4e56b197b7dbca97fd91" id="block-8395eeb05f6e4e56b197b7dbca97fd91"></a> For OCV company’s Seed round: 1. Options pool expectation: see 2. Board seat: see Board Composition 3. Terms not to be in conflict with OCV’s [<mark style="color:orange;">safe side letter</mark>](https://handbook.opencoreventures.com/company-formation/step-6-banking-systems-set-up/#425ed475d9304e679589d18235b6ae8e) ### Preferred financing round <a href="#block-fbc712ea23c8421eb847c3d5330f4c0f" id="block-fbc712ea23c8421eb847c3d5330f4c0f"></a> OCV expects the following rights in our companies Seed Preferred financing round: 1. Major Investor status - impacts information, pro-rata, inspection, right of first refusal, and co-sale rights 2. Qualified Key Holder status - first common director seat and drag-along trigger are tied to the vote of a majority of Qualified Key Holders 3. Drag-along triggers are not typically exercised in practice and generally not a point of contention 4. The ability to vote for common director board seats is an important right for OCV given our ownership stake (especially common shares) in OCV companies ### Standard Equity Incentive Plan Provisions #### **Waiver of Information Rights** The plan includes a waiver of statutory inspection rights (Section 220 of the Delaware General Corporation Law), which limits individual stockholders' ability to demand access to company books and records. As more employees exercise options, the stockholder base grows. Without this waiver, any stockholder (including a former employee) could formally demand to inspect company records, creating significant administrative burden. The waiver addresses this at scale but has legal limits: Delaware courts have held that it may not be enforceable if used to shield fraudulent activity. #### Requirement to Execute Stockholder Agreements The plan requires option holders, upon exercise, to execute the same agreements that other stockholders have signed - typically a right of first refusal and co-sale agreement, stockholders' agreement, and/or voting agreement. Investors at Seed and beyond require all stockholders to be bound by the same transfer restriction and voting agreements. A single unbound common stockholder can complicate or block a financing round. Including this requirement in the plan itself avoids the need to separately collect joinder agreements from each employee at exercise time, which eliminates the risk of a non-responsive former employee creating a structural gap on the cap table.<br> ### 83b Election <a href="#block-a32446b549b4440abfcc3382f8a66b62" id="block-a32446b549b4440abfcc3382f8a66b62"></a> 1. A copy of the completed election form, 2. Proof of certified mail sent to the IRS (such as a photo of a receipt with tracking number), postmarked within the 30-day deadline, and 3. Proof of a self-addressed return envelope from the IRS. To document the completion of this process, founders must provide the following three items to the company’s legal team via e-mail: > Department of the Treasury\ > Internal Revenue Service\ > Austin, TX 73301-0215\ > USA The appropriate IRS office to send the election to can be found at the [IRS website](https://www.irs.gov/filing/where-to-file-addresses-for-taxpayers-and-tax-professionals-filing-form-1040) (those with no payment enclosed). Non-US founders should use the following address. 83b Election form needs to be completed by the founders and sent to the IRS (via certified mail with return receipt) or submitted electronically on the IRS website within 30 days of the effective date of the stock purchase agreement (the date wires are sent). \ \ For electronic filing, create a profile on the IRS.gov website, and fill out Form 15620, i.e. Section 83(b) Election, using information provided in your 83(b) document. Once complete, take a screenshot of the submission completion page as evidence of the date, though the form is instantly transmitted.\ \ For physical mail, while digital signatures are accepted by the IRS, OCV recommends printing and completing the form with a wet signature to remain compliant regardless of any IRS process changes.\ \ When filling out the 83(b) form, it will ask what date the shares were transferred to the founder. This is the same date the founder purchased their shares.\ \ A self-addressed return envelope needs to be included as well. As part of the company formation process, the Legal Team will provide the latest instructions and template form for 83b Election. For non-US founders, OCV will assist with creating a FedEx return label to be included with the self-addressed return envelope. 1. a stockholder purchases common stock subject to vesting (i.e., typical OCV founder shares issued during the company formation stage); or 2. if an option holder [early exercises](https://handbook.opencoreventures.com/company-ops/people-ops/employee-compensation-and-benefits/equity-compensation#stock-options) an option that is subject to vesting. 83(b) elections are required to be filed only if/when: \*OCV team will confirm the common share purchase is complete and email the founder to start this next step. Filing an IRS 83b Election is extremely crucial for founders and the company. Failing to do so has significant tax implications to both. \ <br> # Investor Relations OCV actively manages investor relationships through several key processes. We work to keep investors informed about when and how OCV can facilitate introductions to company CEOs. Additionally, we maintain strong relationships with both [Friendly and Pipeline VCs](https://handbook.opencoreventures.com/startup-manual/fundraising/investor-management#ocvs-trusted-vc-network) through regular communication channels, including our [quarterly newsletter](#block-1cffeb7b074d801d926ccf66a43998f4) and scheduled check-in calls with our Friendly VC Group. ## Investor newsletter <a href="#block-1cffeb7b074d801d926ccf66a43998f4" id="block-1cffeb7b074d801d926ccf66a43998f4"></a> OCV sends a newsletter to our [Friendly and Pipeline Investors list](https://handbook.opencoreventures.com/fundraising/#1c8feb7b074d80268991c5b3a236419d) each quarter, copy OCV fund LPs. Creating the newsletter is a participatory process that involves gathering input from the OCV team as well as OCV founders.The newsletter covers: 1. **OCV Highlights:** Announcing new companies, founders, company traction, closed fundraising rounds, etc. 2. **Investment opportunities:** Introduce OCV companies preparing to fundraise. 3. **OCV Company Spotlight:** Highlight a company recently added to the portfolio. 4. **CEO Candidate Referrals:** Share companies currently hiring a CEO. ### Drafting the newsletter <a href="#block-1cffeb7b074d805783bac61cd7dbc769" id="block-1cffeb7b074d805783bac61cd7dbc769"></a> The Investor Newsletter is sent on the first day of the second month of the quarter. If the 1st falls on a weekend or holiday, we send the newsletter on the following business day. 1. On the first day of the new quarter, start a new task in the `Editorial Calendar` project in our project management tool. Use the [task template](https://app.asana.com/0/1202910418349768/1205799590901236) named `Investor Newsletter`. 2. Create a copy of the [Investor Newsletter Template](https://docs.google.com/document/d/1qYF4UiMmnDKmb8rfZOKWn-neTd7aTlynvRyCs57fJBI/edit#heading=h.rombru81igcd) to generate a new newsletter. Name the file `YYYY-MM-DD Investor Newsletter`. The date should reflect the send date, not the date you created the document. 3. Add the document link to the task so it’s easy for everyone to find. 4. Add a comment to the task, tagging all stakeholders. Be specific about the details you need. For example: “@Person1, can you share which companies are hiring a CEO this quarter and any specific qualifications we should highlight?” 5. A week before sending, share the finalized content with stakeholders to review and make any last-minute editions/subtractions. Confirm portfolio-company-specific details with founders before sending. # Benefits & Time Off Page Summary: OCV Guidelines on Employee Benefits, PTO, Holidays, Remote Work, and Parental Leave. ## Benefits Benefits are available to OCV team members working full-time (minimum of 30 hours per week). ### Healthcare (Medical, Dental, Vision) Full-time, US-based team members can select benefit coverage through their payroll system account. Coverage for new hires begins on the first of the month, on or after hire. Annual open enrollment generally starts around the end of July through the first week of August. New plans start on October 1 of each year. Employees have the option to contribute to Health and Dependent Care FSA accounts. LLC partners are not eligible for tax-advantaged accounts of any kind per IRS restrictions. ### 401K Matching 1. Auto-enrollment 3 months after the start date. 2. 100% of contributions on the first 4%, deferred. 3. Annual contribution and company matching limits follow IRS and ERISA rules. ### Life Insurance (Basic) Coverage up to USD $50,000. ### Long-Term Disability 60% monthly income up to $6,000. ### Sick Leave 160 hours earned throughout the year (by pay period). The remaining time-off balance for this policy is not paid out upon employee termination. ### Parental Leave Full-time employees who have completed at least one year of continuous service with OCV are eligible for [parental leave](#parental-leave-1). ### Holidays OCV observes the following 10 holidays in the U.S.: 1. New Year’s Day 2. Martin Luther King Jr. Day 3. President’s Day 4. Memorial Day 5. Independence Day 6. Labor Day 7. Thanksgiving Day 8. Day after Thanksgiving 9. Christmas Day 10. Plus one holiday of choice (and significance) for each employee. This must be an actual holiday. For example: Lunar New Year, Good Friday, Juneteenth, Yom Kippur, Veterans’ Day, etc. Non-U.S. employees observe local statutory holidays. Please discuss with your manager to set holiday schedules in advance. ### Unlimited PTO Our "don't ask, do tell" policy means you inform your manager when taking time off. Approval is required for extending beyond three weeks. No accruals or carryover. PTO is not paid out upon termination. ### Contractor PTO Policy Generally, contractors are not eligible for paid time off. Immaterial time periods are generally permissible, e.g. half-days, as part of normal remote work flexibility. Material time-off should be discussed with management in advance, and the invoice rate may need to be adjusted accordingly, especially if billed on a weekly or monthly rate. ## Taking time off When you take any time off: 1. Let your manager and team know as soon as possible. (e.g., send a message in your team's Slack channel) 2. Request time-off in OCV’s payroll management system for PTO tracking & reporting 3. Designate a backup team member for anything that needs covering while you're out. (i.e., meetings, planned tasks, unfinished business, important chat/email threads, anything where someone might be depending on you) 4. Mark an all-day "out of office" event in your work calendar for the day(s) you're taking off This process is the same for any days you take off, regardless of whether it's a holiday or you just need a break. ## Remote work policy We are remote-first, although travel may be required occasionally. As part of our remote-first policy, we ask employees to live and work within one of the four states (CA, CO, TX, NY) where OCV maintains current state registrations. ## Moving to a new address State payroll tax jurisdiction cannot be changed during a pay period; a location change has to coincide with the beginning of a pay period. ### Moving within your current state Employees must notify their managers and update their home address profile in the payroll system as of their move date, even if it’s just a new zip code a couple of miles away. Delayed reporting can trigger missed city-specific registration deadlines and incur unnecessary time and costs to remedy the penalties. ### Moving to a new state When moving to a state where OCV has a current state registration, employees must notify their manager and the Accounting Team in advance and update their home address profile in the payroll system as of their move date. ### New state registrations If you are planning a move to a state where OCV does not maintain current state registration, employees must discuss with their manager and obtain approval before the move. New state registrations can take time to set up and incur significant additional management overhead for the business. OCV will need to evaluate the business case for the move as part of the approval process. Without prior approval, a move to a location without proper business registration may result in termination because we can’t legally hire you to work in that state. ## Remote work perks For full-time OCV (the firm) team members: 1. Home internet reimbursement 2. Home office setup reimbursement (up to USD $1,000) or access to a co-working space (comparable to WeWork All Access pass), if desired 3. Cell phone service stipend (USD $50/month). Team members will need to use personal cell phone numbers for business use occasionally. This stipend is included in your paycheck. ## Home office setup Company-sponsored equipment required for all teammates*:* 1. **Laptop:** We recommend[ Apple MacBook Pro 14", 512 GB](https://www.apple.com/shop/buy-mac/macbook-pro/14-inch-space-gray-8-core-cpu-14-core-gpu-512gb#) for non-engineers, and[ Apple MacBook Pro 16"](https://www.apple.com/shop/buy-mac/macbook-pro/16-inch-space-gray-10-core-cpu-32-core-gpu-1tb#) for engineers. The laptop will be purchased for you by the company and delivered to you before your start date. Team members may purchase a new laptop every 36 months. (Old laptop needs to be returned to the company.) 2. Lighting for video conference, if your workspace does not have enough lighting 3. High-speed internet 4. Power source, if it's not reliable in your area **Recommended workspace accessories:** 1. Monitor 2. Headset 3. Microphone 4. Upgraded webcam 5. Mouse 6. Keyboard 7. Ergonomic chair 8. Adjustable desk, standing desk converter, or co-working space (if you opt out of the adjustable desk) These accessories can enhance productivity, comfort, and meeting experience. While the company can sponsor these items, we ask that team members only purchase accessories if needed. Any additional requests for equipment not listed can be discussed with your manager for approval. ## Parental Leave OCV is committed to supporting its employees during significant life events, including the arrival of a new family member. Our parental leave policy is designed to provide eligible employees with the time and financial support they need to bond with and care for their newborn or newly adopted infant child. ### Leave duration Employees are entitled to three months (12 weeks) of leave for bonding. This leave can be taken consecutively or in two-week separate blocks within the first year following the birth or adoption of a child. OCV will ensure an employee is paid 100% of their salary for 12 weeks after taking into consideration any state-provided benefits to which the employee is entitled. OCV extends this paid benefit to all its employees regardless of the state of employment. All employees must apply for and obtain whatever state benefits are available to them. San Francisco employees must also be eligible under the PFL program to receive PFL compensation for the purpose of bonding with a new child. ### Communication during leave While on parental leave, employees are encouraged to stay in touch with their team and remain informed about any significant changes or developments within the company. However, employees are not required to perform work duties during this period. Note: this policy is specifically designed for OCV employees based on our business needs, which may not be appropriate for the goals and objectives of OCV companies. OCV companies are encouraged to develop their own parental leave policy. ### Supplemental benefits If an employee participates in the company’s group health plan, they will maintain coverage during their Parental Leave on the same terms as if they had continued to work. If applicable, an employee must make arrangements to pay their share of health plan premiums while on leave. In some instances, the company may recover premiums it paid to maintain health coverage or other benefits for the employee and their family. Use of Parental Leave will not result in the loss of any employment benefit that accrued before the start of their leave. ### Returning to work At the conclusion of the parental leave, employees are expected to return to their regular duties and schedule. OCV will make reasonable efforts to accommodate any requests for flexible work arrangements upon return. ### Job protection Employees on parental leave will be protected from any adverse employment actions, and their position or an equivalent one will be available upon their return. The continuation of benefits during the leave will be subject to the employee's regular contribution. ## Request parental leave To request parental leave, employees must provide at least 12 weeks' advance notice to their manager. The request should include the anticipated start date of the leave and any specific scheduling preferences. # Recruiting Page Summary: OCV Recruiting Process Overview, Posting a Job, Interview Process, Culture Fit Considerations, and Resume Review Tips. ## Recruiting process <a href="#block-940de5dd5d114c2e8fa60c7a1ef5f879" id="block-940de5dd5d114c2e8fa60c7a1ef5f879"></a> At OCV, we strive to provide a great candidate experience in our recruiting process. Here are general guidelines on how we recruit at OCV and our portfolio companies. ## Job posting <a href="#block-c45f7d46fd244229967ce34ca9ba55f9" id="block-c45f7d46fd244229967ce34ca9ba55f9"></a> The Hiring Manager and recruiting team will: 1. Create a [job description](https://handbook.opencoreventures.com/company-ops/people-ops/recruiting/job-description-guide) 2. Establish the interview team and plan (stages and interviewer order) 3. Customize role-specific questions 4. Post the job to various job boards (for example, LinkedIn, Indeed, and Glassdoor) via the Greenhouse application tracking system ## General interview process <a href="#block-7eabfe1d4e9f479ab98bf747df416b59" id="block-7eabfe1d4e9f479ab98bf747df416b59"></a> Candidates generally have three rounds of interviews (with case-by-case exceptions) due to the nature of the role. 1. Initial Conversation with Recruiting: In this initial conversation, we want to know more about the candidate as a person and their interest in this role. The candidate should be prepared to discuss logistics such as location, availability to start a new role, and their preferred range of compensation. 2. Interview with the Hiring Manager: In this second conversation, we evaluate the candidate’s skills, experience, and work history. The interviewer will also discuss more details concerning the project and the team.\ NOTE: For Engineering Roles: The interviewing team may ask the candidate to do a project as part of the hiring process. 3. Final Round of Interviews: In the final round, the candidate meets with additional team members as appropriate. 4. Team Debrief: The interview team has an internal discussion concerning the candidate and determines whether we move forward with the hiring process. 5. Reference Checks: We request that candidates provide three references before making an offer. NOTE: Four references are required for manager roles.\ Candidates should provide managerial references, if possible. This helps us learn more about their areas for improvement and how to harness their strengths. In addition to assessing fit and gaining context on the individual, it also helps us learn how to best support their success in this role.\ We would like to connect with a current or former colleague in each of the following areas: 6. The candidate’s direct (or former) supervisor - Someone who is familiar with their work 7. A peer in the same role as the candidate - Someone who did similar work 8. A cross-functional partner or customer - Someone who was a consumer of the candidate’s work 9. if the candidate is applying for a management position, include someone the candidate supervised 10. NOTE: We may ask for references *prior* to the Final Round.“Backdoor Reference Checks” - Reaching out to network connections who may know the candidate is great way to get valuable feedback during the recruiting process. NOTE: Prior to pursuing a “Backdoor Reference Check,” ask the candidate if there is anyone they prefer to *exclude*. 11. Verbal Offer: Once we complete the reference checks (with satisfactory results), we move forward with a verbal offer. 12. Formal Offer: 13. Follow the process outlined [here](https://docs.google.com/document/d/1NSd9sS8wcW9XZ2s8sS_la7PHdohmQvMSVSWs1a2l6cw/edit) 14. Onboarding: Onboarding will proceed after passing a background check ## Looking for the right fit <a href="#block-a301341c53cd4d8b8c8c53b5f4c16e84" id="block-a301341c53cd4d8b8c8c53b5f4c16e84"></a> Venture capital and early-stage startup life isn’t suitable for everyone for a variety of reasons (sometimes, it’s a function of timing). In addition to prerequisite skill sets and experience, we’re looking for team members who help us accelerate growth and accomplish the impossible.Some of the questions we’d consider during the interview process: 1. As the Hiring Manager, would you want to be in the trenches with this candidate? 2. Would you want to spend a lot of time together and work through conflicts. 3. We’re in a rowing race, aimed to win, are they paddling in the same direction as the rest of the team? 4. Are they a team player or put their self-interest first? 5. Would you see yourself starting a company with this person in the future? 6. Are they entrepreneurial? Driven with big goals and self-motivated? 7. Would you see them doing something amazing in four to six years? #### Inappropriate Questions <a href="#block-17e849d17c0a43dd95a3226978214b52" id="block-17e849d17c0a43dd95a3226978214b52"></a> When hiring in the USA it is important to not discuss the following topics about personal characteristics that are protected by law: <figure><img src="https://imagedelivery.net/IEMzXmjRvW0g933AN5ejrA/wwwnotionso-image-prod-files-secures3us-west-2amazonawscom-fc87116f-8486-4a54-aae0-4e36fe3019eb-e7305903-cac1-4f5d-8afb-af1a26861dc6-screenshot_2024-03-19_at_113641_ampng/public" alt="notion image" height="100%"><figcaption></figcaption></figure> ## Resume Review Tips Assessing candidate resumes effectively is crucial to identify the most qualified individuals for a position. Here's a recommended guide on how to assess candidate resumes: 1. **Review Job Description:** Begin by thoroughly understanding the job description and its requirements. This will help you identify the key skills, experiences, and qualifications you're looking for in a candidate. 2. **Create a Screening Checklist:** Develop a checklist of essential criteria, such as required skills, education level, years of experience, and specific qualifications. This will serve as your guide when reviewing resumes. 3. **Skim for Immediate Fit:** Give each resume a quick scan to see if the candidate meets the basic requirements. Look for keywords and relevant information that align with the job description. 4. **Assess Relevant Experience:** Pay attention to the candidate's work experience section. Look for roles that directly relate to the position you're hiring for. Focus on the candidate's accomplishments, responsibilities, and quantifiable results. 5. **Highlight Achievements:** Prioritize candidates who have demonstrated exceptional accomplishments in their previous roles. Look for those who have made a positive impact, achieved goals, and gone beyond basic job responsibilities. 6. **Highlight Potential Flags 🚩**: Multiple roles less than 2 years in duration is a major red flag. It can take organizations up to 1.5 years to remove non-performers. Keep in mind that people who job hop generally interview extremely well. Short-term positions should be accompanied with reasonable explanations (e.g. moved locations to be closer to family) and strong references from former managers. 7. **Check Education and Certifications:** Verify that candidates have the required educational background and any necessary certifications for the role. 8. **Evaluate Skills:** Assess both technical and soft skills mentioned in the resume. Check for specific skills mentioned in the job description and assess the depth of the candidate's expertise. 9. **Quantify Experience:** Prefer candidates who provide quantifiable results in their work experience section. Numbers and metrics give a clear picture of their achievements and contributions. 10. **Assess Career Progression ⭐️:** Evaluate whether the candidate's career progression is logical and demonstrates growth. Look for candidates who have taken on more responsibility over time. This is one of the most critical steps for experienced hires. Lateral / backward moves are generally a red flag **🚩**. 11. **Examine Gaps:** If there are gaps in a candidate's employment history, assess how they explain these gaps in their resume. Look for valid reasons such as further education, personal projects, or career transitions. 12. **Review Additional Sections:** Pay attention to sections like volunteer work, certifications, awards, and affiliations. These can provide additional insights into a candidate's character and interests. 13. **Cultural Fit:** Consider whether the candidate's resume reflects values and qualities that align with your company culture. This can be seen through their achievements, interests, and any relevant personal information. 14. **Avoid Bias:** Be mindful of unconscious bias during the review process. Evaluate candidates based on their qualifications and experience, rather than factors like gender, ethnicity, or age. 15. **Compare Multiple Resumes:** If you're reviewing multiple resumes, create a scoring system or a ranking mechanism to objectively compare candidates. 16. **Shortlist Candidates:** Based on your assessment, create a shortlist of candidates who best match the job requirements. These are the individuals you'll consider for the next stages of the hiring process. 17. **Additional Review:** If possible, have another team member or colleague review the resumes as well. Different perspectives can help identify strengths and weaknesses you might have missed. Remember that the resume is just the first step in the assessment process. Once you've identified potential candidates, you can conduct interviews and other assessments to make a well-informed hiring decision. # Employee Lifecycle Guidelines Page Summary: Onboarding an employee, ## Onboarding #### Pre-Onboarding <a href="#block-b206caebbe4a4a0c9330aa002ef1e86d" id="block-b206caebbe4a4a0c9330aa002ef1e86d"></a> * Send welcome email with start date and initial instructions * Provide access to company handbook and policies * Ship necessary equipment (laptop, accessories, etc.) #### First Day <a href="#block-57bb6fa7b48745fba772f241b94a40de" id="block-57bb6fa7b48745fba772f241b94a40de"></a> * Virtual welcome meetings with team lead and people ops * IT setup and system access * Introduction to company communication tools #### First Week <a href="#block-784ebf02b7ae4e988d615c93ddcf7b2c" id="block-784ebf02b7ae4e988d615c93ddcf7b2c"></a> * Daily check-ins with direct supervisor * Virtual team introductions * Schedule 1:1 introductions with OCV team members to get to know teammate role and responsibilities and understand where cross-functional collaboration might occur * Wider team introduction and welcome at weekly OCV team social meeting * Schedule training sessions and shadowing on company processes and systems * Continue sessions for first week to two weeks as team member ramps up * Additional shadowing sessions or trainings may occur as additional work streams are introduced to new team member #### First Month <a href="#block-24f9b738c7d243d49939cc69a7172ae4" id="block-24f9b738c7d243d49939cc69a7172ae4"></a> * Regular one-on-ones with manager * Assignment of first projects * Introduction to company culture and values #### Ongoing Support <a href="#block-c1f25a6899ea40bc880472bf2c693754" id="block-c1f25a6899ea40bc880472bf2c693754"></a> * Assign a remote buddy for informal support * An OCV team member will be a point of contact for the new employee for quick ongoing questions about processes and systems or other way-finding questions as the new team member becomes acquainted and comfortable. * Schedule regular team building activities ## Goal Setting & Performance Evaluation OCV’s goal setting and annual performance evaluation process is designed to evaluate employee performance, provide constructive feedback, and set goals for professional development. This process aims to recognize and reward high performers, identify areas for improvement, and align individual goals with organizational objectives. **Goal setting and performance planning** * At the beginning of each performance cycle (i.e. January), employees will collaborate with their manager to set goals and objectives that align with the overall firm goals for the year. Goals can be broken down to specific time periods (for example, Q1 or 1H) and should directly contribute to OCV’s growth goals. * Goals should be Specific, Measurable, Achievable, Relevant, and Time-bound (SMART). * Development plans should also be discussed to enhance skills and competencies. **Continuous feedback** * Regular feedback sessions (during 1:1s) should be conducted throughout the year to ensure employees are aware of their progress and areas for improvement. * Managers are expected to provide constructive feedback on accomplishments, address concerns, and offer support for development. **Annual performance review** Annual performance review process takes place in December of each year. Specific timeline for each review cycle may be adjusted based on calendar of events, in general: 1. December 1 - December 7: Self-Evaluation 2. Employees to draft self-assessment in the Performance Management System, reflecting on their performance against set goals. 3. December 8 - December 15: Manager Review 4. Managers to provide written feedback following prompts in the Performance Management System including an overall performance rating. 5. Performance evaluation will be assessed against key competencies, job responsibilities, and achievement of individual and team goals. 6. December 15 - December 20: Management Review 7. OCV Management to review promotion proposals from managers and evaluate merit and market-based compensation adjustments. 8. December 21 - December 31: Annual Review Meetings 9. Manager to discuss performance review with their direct reports (there should not be any surprises in the written review as continuous feedback is expected to occur throughout the year). 10. Manager and employee to create a development plan for the upcoming review cycle. 11. Employee to acknowledge performance review in the Performance Management System. 12. January 1: Recognition and rewards 13. Promotion and compensation adjustments take effect 14. January 1 - January 15: Annual goal setting process (see Goal setting and performance planning above). * Send any remaining documentation (e.g., tax forms) * Conduct a team debrief to address any gaps left by the departure #### Post-Departure Follow-up <a href="#block-29d9b9d3d77a4e50ac2ada2400a112ec" id="block-29d9b9d3d77a4e50ac2ada2400a112ec"></a> * Ensure all company property is returned or settled according to OCV policy * Conduct a final check of knowledge transfer * Provide any necessary paperwork or final need-to-knows for exiting employee #### Final Day Procedures <a href="#block-3afdf5f238b94019ab2103cb7b79297f" id="block-3afdf5f238b94019ab2103cb7b79297f"></a> * Conduct the exit interview * Gather feedback on the employee's experience * Discuss any final questions or concerns #### Exit Interview <a href="#block-ae25f8aacc824962ab1f792fbb65f32e" id="block-ae25f8aacc824962ab1f792fbb65f32e"></a> * Execute termination in HRIS * Process final paycheck and any outstanding expenses * Provide information about benefits continuation or termination #### Administrative Tasks <a href="#block-2e0d95af498b49038a1b069800751af0" id="block-2e0d95af498b49038a1b069800751af0"></a> * Disable access to company systems and accounts * Email and workspace accounts * Other function-specific systems accounts * Company equipment * Determine plan for either collecting or for employee to purchase equipment * Update security protocols if necessary #### Access and Security <a href="#block-b665d39824e146f2b7adc9bae76b11af" id="block-b665d39824e146f2b7adc9bae76b11af"></a> * Create a transition plan * Document ongoing projects, responsibilities and systems access * Arrange training sessions for team members taking over tasks #### Knowledge Transfer <a href="#block-3cf52af50bb84834a8a26fce79ffaf35" id="block-3cf52af50bb84834a8a26fce79ffaf35"></a> * Announce the departure to relevant teams * Update clients or external partners if necessary * Arrange a farewell gathering if appropriate #### Communication <a href="#block-064e19a5ef54446fa336e694dd54b4d3" id="block-064e19a5ef54446fa336e694dd54b4d3"></a> * Manager will discuss departure circumstances with exiting team member and determine last day and communication plan to rest of the OCV team * Schedule an exit interview ## Employee Offboarding Guide <a href="#block-2e3a457098714e3ebb21ebac7b5112ee" id="block-2e3a457098714e3ebb21ebac7b5112ee"></a> #### Initiate the Process <a href="#block-64b4c1be7a354b13ab1adcf5cb5863fb" id="block-64b4c1be7a354b13ab1adcf5cb5863fb"></a> * Manager will discuss departure circumstances with exiting team member and determine last day and communication plan to rest of the OCV team * Schedule an exit interview #### Communication <a href="#block-064e19a5ef54446fa336e694dd54b4d3" id="block-064e19a5ef54446fa336e694dd54b4d3"></a> * Announce the departure to relevant teams * Update clients or external partners if necessary * Arrange a farewell gathering if appropriate #### Knowledge Transfer <a href="#block-3cf52af50bb84834a8a26fce79ffaf35" id="block-3cf52af50bb84834a8a26fce79ffaf35"></a> * Create a transition plan * Document ongoing projects, responsibilities and systems access * Arrange training sessions for team members taking over tasks #### Access and Security <a href="#block-b665d39824e146f2b7adc9bae76b11af" id="block-b665d39824e146f2b7adc9bae76b11af"></a> * Disable access to company systems and accounts * Email and workspace accounts * Other function-specific systems accounts * Company equipment * Determine plan for either collecting or for employee to purchase equipment * Update security protocols if necessary #### Administrative Tasks <a href="#block-2e0d95af498b49038a1b069800751af0" id="block-2e0d95af498b49038a1b069800751af0"></a> * Execute termination in HRIS * Process final paycheck and any outstanding expenses * Provide information about benefits continuation or termination #### Exit Interview <a href="#block-ae25f8aacc824962ab1f792fbb65f32e" id="block-ae25f8aacc824962ab1f792fbb65f32e"></a> * Conduct the exit interview * Gather feedback on the employee's experience * Discuss any final questions or concerns #### Final Day Procedures <a href="#block-3afdf5f238b94019ab2103cb7b79297f" id="block-3afdf5f238b94019ab2103cb7b79297f"></a> * Ensure all company property is returned or settled according to OCV policy * Conduct a final check of knowledge transfer * Provide any necessary paperwork or final need-to-knows for exiting employee #### Post-Departure Follow-up <a href="#block-29d9b9d3d77a4e50ac2ada2400a112ec" id="block-29d9b9d3d77a4e50ac2ada2400a112ec"></a> * Send any remaining documentation (e.g., tax forms) * Conduct a team debrief to address any gaps left by the departure \ <br> \ <br> # Registered Agents ## Compliance and Registered Agents (RA) Registered Agents play a crucial role in helping companies maintain compliance. They act as a liaison between the company and the state for legal purposes, receiving important legal and tax documents on behalf of the company. This ensures that the company is always aware of its obligations and helps to prevent any lapses in compliance. #### Annual Reports <a href="#block-0dc0c525cc7545ad816ff1b5319fd78c" id="block-0dc0c525cc7545ad816ff1b5319fd78c"></a> Annual reports are required by many states and serve as a way for companies to update or confirm their information on the state's records. Companies typically include details such as their name, registered office address, registered agent details, and information about directors and officers. Submitting these reports is crucial for maintaining compliance as failure to do so can result in penalties or even dissolution of the company. Typical annual due dates: * Delaware: March 1. * California: last day of the anniversary month of incorporation. Accounting team will monitor compliance deadlines and file annual reports for the company directly, without going through the registered agent service provider. **Annual Report Filing & Registered Agent (RA) Processes *****(updated January 2026)*** The Accounting team works with OCV and founders to manage the ongoing compliance obligations related to registered agent processes. Accounting team also oversees annual report filings and registered agent renewals across all entities (OCV's management company, fund entities, and OCV companies). 1. New Entities: 1. Responsibility: The OCV team will assist with registering new entities/making entity amendments. Recurring compliance requirements/renewals is handed off to the Accounting team. 2. Founders should be looped in on all communications with RA service provider (along with Accounting team) as the second line of control. 2. Entity Amendments 1. Should the company officer(s) change or require additional state registrations, OCV team will notify the RA service provider. 2. Dissolution: 1. OCV team will notify RA service provider to remove RA service and close account after the Legal team files Certificate of Dissolution (or Surrender) with all applicable states (usually CA and DE). 3. Annual Report Filings 1. Responsibility: The Accounting team manages annual report filings (by state) both for OCV and OCV companies (and continue to do so after a CEO joins). 2. **The Accounting team will process annual filings outside of the RA service provider.** 1. Note: RA service provider will send emails to founders offering filing services with specific deadlines - please decline the service and let the Accounting team know. 1. Using RA's filing services requires Accounting team's time to gather required material - it's more cost effective for Accounting team to file directly. 2. **Annual Board Minutes are NOT required** per Legal Team. 3. While the CA Secretary of State advises that an updated Statement of Information should be filed any time company information changes (including officer changes), there is no hard deadline. The 90-day filing requirement applies only to a company's *initial* Statement of Information upon first registering in California. For ongoing changes, **officer updates can be captured at the time of the next annual SI filing** within the company's regular 6-month filing window. 4. Registered Agent (RA) Renewals 1. Responsibility: The Accounting team manages RA renewals annually. 1. RA service provider sends renewal reminders to companies annually, flag those to the Accounting team. 2. Accounting Team processes renewal payments and ensures records are up to date. 2. Documentation 1. After filing documents are saved in the relevant entity accounting drive under taxes. # Beneficiaries & KYC Requests ## Beneficial Ownership Information (BOI) Reporting As of January 1 2024, the Financial Crimes Enforcement Network (FinCEN) requires small businesses to submit information about their Beneficial Owners (BOI). The [definition of Beneficial Owner](https://arc.net/l/quote/apqtojjx) includes: * Any individual with more than 25% fully-diluted equity ownership, directly or indirectly, in a company. This includes OCV’s LPs when OCV owns more than 25% of a company. * CEOs and CTOs *regardless of ownership percentage,* as it covers any "control person" involved in the day-to-day operations of the company. The specific information requested includes both information about the company, its Beneficial Owners, and “Company Applicants” - the individuals/entities who filed the company’s initial incorporation paperwork. * Company information: company’s full legal name, its current address (which must be a US street address, not a PO box), jurisdiction of formation (Delaware), and tax identification number (usually an EIN) * Beneficial Owner + Company Applicant information: full legal name, date of birth, residential address, and the unique identifying number and image of a US passport, state driver’s license, or other eligible identification document All OCV companies are subject to this requirement. OCV will complete the initial BOI submission to FinCEN during the incorporation process. The filing requirements differ for companies incorporated after January 1 2024 (”Newly registered companies”) vs. those incorporated prior to 2024 (”Existing companies”): * Newly registered companies * BOI submission deadline: 1 month (28 days) after date of first incorporation * Company Information, Beneficial Owner, and Company Applicant information all required * Existing companies * BOI submission deadline: Janurary 13, 2025 * Only Company Information and Beneficial Owner information required (Company Applicants are not required) As part of the reporting process, individuals can register for a FinCEN ID by submitting their documents to FinCEN directly. OCV can then include each company’s associated FinCEN IDs with the BOI report submission, without needing to handle sensitive information/documents on behalf of LPs, CEOs, and CTOs. This is also helpful for investors who are Beneficial Owners of multiple entities.OCV will keep track of LP and founder FinCEN IDs internally. The FinCEN IDs of company applicants will be provided by the legal team upon incorporation. #### Registering for a FinCEN ID <a href="#block-cbcba3a7a01d4402a494eb227a2a0f98" id="block-cbcba3a7a01d4402a494eb227a2a0f98"></a> Individuals can register for a FinCEN ID [here](https://fincenid.fincen.gov/landing). * The process should take less than 5 minutes. * Note: Please use your personal email address (not your work email) - you will use the same FinCEN ID for any other companies you may be a Beneficial Owner for. #### Updating Beneficial Ownership Information <a href="#block-9f7ed5e7967c4df3ac87093d2da3edc8" id="block-9f7ed5e7967c4df3ac87093d2da3edc8"></a> Going forward, anyone reported as a Beneficial Owner will need to update the information on their report within 30 days whenever it changes, and companies will also need to update company information if they change their address or otherwise undergo any changes that affect the information reported to FinCEN. This also includes any executive level new hires and any proposed equity issuances that may exceed 25% of either company’s ownership interests. In such events, please notify the company’s legal team so they can advise with respect to any BOI reporting obligations (as well as any corporate actions that may be necessary). Further, if there are any changes to the information that an individual submits to obtain a FinCEN ID, that change must be reported within 30 days.\ \ To make updates to a BOIR filing, go to the [BOI-E Filing](https://boiefiling.fincen.gov/boir/html) portal. Select “update prior report” to make subsequent BO updates. ## KYC Requests <a href="#block-5c80bda2e7354ae88ff45e5de2c718c6" id="block-5c80bda2e7354ae88ff45e5de2c718c6"></a> Vendors like Deel, SVB, Brex, Stripe, and other financial systems regularly ask for KYC (Know Your Customer) information on a company's beneficial owners and control persons during onboarding or periodic re-verification. The information they request often mirrors the FinCEN BOI fields above: legal name, date of birth, residential address, SSN, and a copy of a government ID. ### **Handling a KYC Request** OCV will release sensitive information via a direct secure link to the vendor. Please ask for a secure submission link and loop in OCV, who will forward to the respective individuals to complete. When a vendor sends a KYC request to a portfolio company: 1. Flag to the finance team first. Finance typically has visibility into the company's beneficial owners and cap table and can fulfill many requests directly. 2. Escalate to OCV Ops if anything is missing. If finance does not have the requested information — common for SSN details or for items a vendor specifies in a non-standard way — escalate to OCV Ops. 3. OCV will release sensitive information via a direct secure link to the vendor. Ask the vendor for a secure submission link and loop in OCV, who will forward it to the respective individuals to complete. Never send IDs, SSNs, dates of birth, or passport scans to a vendor over plain email or Slack. If a vendor cannot offer a secure submission method, escalate to OCV Ops before responding. # Conflicts of Interest ## Conflict of Interests A conflict of interest (in VC context) is generally perceived as a situation in which an individual’s personal, financial, or professional interests may interfere with their ability to act in the best interest of the firm, its investors, or its portfolio companies. It arises when a person's private interests, such as investments, relationships, or obligations, could influence, or be perceived to influence, their professional judgment, decision-making, or actions in a way that does not align with the firm's objectives or fiduciary duties.To maintain the integrity of OCV’s decision-making process and to avoid any potential conflicts of interest, non-investment partners are prohibited from making personal investments in other private companies or directly investing in any of our firm's portfolio companies. This policy ensures that all investment decisions and actions taken by our firm are in the best interest of the firm and its stakeholders, and that personal financial interests do not influence business judgments or create conflicts.Our goal is to maintain transparency and avoid any appearance of impropriety, ensuring that all employees are aligned with the firm's values and objectives. # Brand # Logos & assets ## Logo Versions ### Vertical Full Logos {% columns %} {% column %} Light: Use for light mode and on light backgrounds {% endcolumn %} {% column %} Dark: Use for dark mode and on dark backgrounds {% endcolumn %} {% endcolumns %} ### Semi-Stacked Full Logos {% columns %} {% column %} Light: Use for light mode and on light backgrounds {% endcolumn %} {% column %} Dark: Use for dark mode and on dark backgrounds {% endcolumn %} {% endcolumns %} ### Wordmarks * White, transparent background * Light, transparent background * Dark, transparent background * Black, transparent background ### Icons * Light: use for light mode * Dark: Use for dark mode ## Patterns and Backgrounds ### Gradient Backgrounds {% columns %} {% column %} Light gradient {% endcolumn %} {% column %} Dark gradient {% endcolumn %} {% endcolumns %} ## Typography # Visual Design ## Blog post images Metamodern editorial image prompt <pre class="language-md" data-overflow="wrap"><code class="lang-md">Create a Wide-format metamodern editorial illustration, contemplative and optimistic, blending contemporary landscape painting with Swiss-inspired graphic design. <strong>Subject: {{desribe the image you want}} </strong> <strong>Color Treatment: {{Choose rose, blue, or purple accent}} </strong>- The composition should always be primarily composed of warm neutral tones. - Accent colors should function as editorial highlights rather than color grading. - Do not apply a monochromatic tint over the entire image. - Do not colorize the atmosphere with the accent color. - Accent colors should be localized to selected geometric forms, architectural features, focal objects, and subtle atmospheric details. The image should remain 80–90% neutral. <strong>Visual language: </strong>- muted palette of warm ivory, pale sandstone, soft beige, fog gray, dusty blue, muted slate, and faded gold - low-saturation colors throughout - atmospheric perspective and soft haze - large areas of negative space - calm, reflective mood - subtle tension between realism and abstraction - geometric graphic elements integrated into the environment rather than floating randomly - oversized translucent circles, thin line arcs, architectural rectangles, and minimalist grid fragments positioned asymmetrically - shapes placed differently in every composition - editorial illustration aesthetic rather than fantasy art contemporary venture-capital / technology publication style - modernist composition with strong visual hierarchy <strong>Environment: </strong>- expansive landscape or futuristic setting - distant mountains, architectural forms, pathways, towers, or symbolic structures - soft natural light - no dramatic sunset colors - no neon - no cyberpunk - no sci-fi clutter <strong>Rendering: </strong>- painterly digital illustration - subtle paper texture - soft edges - restrained contrast - premium magazine artwork - contemporary design annual aesthetic - elegant and intellectual - minimal visual noise <strong>Composition: </strong>- asymmetrical layout - focal subject offset from center - geometric elements distributed across multiple regions of the canvas - avoid repeating previous geometric arrangements - clear foreground, midground, and background depth - cinematic wide aspect ratio <strong>Negative prompts: </strong>- no text - no logos - no infographic style - no stock illustration look - no cartoon style - no bright saturated colors - no cyberpunk - no photorealism - no excessive geometric clutter Visual tone inspired by modern venture capital editorial design, emphasizing clarity, long-term thinking, infrastructure, progress, and optimism. Metamodern rather than futuristic. Sophisticated, understated, and institutional. </code></pre> ### Color accents #### Rose primary <pre data-overflow="wrap"><code><strong>Primary atmosphere: Warm ivory, stone, fog gray. </strong> <strong>Accent: Muted rose. </strong> <strong>Rose appears in: </strong>- geometric overlays - atmospheric glow - focal architectural elements Rose should occupy roughly 10–15% of the image. The image should still feel predominantly neutral. </code></pre> #### Blue accent <pre data-overflow="wrap"><code><strong>Primary atmosphere: Warm ivory, stone, fog gray. </strong> <strong>Accent: Muted dusty blue. </strong> <strong>Blue appears in: </strong>- geometric overlays - distant atmospheric layers - architectural highlights Blue should occupy roughly 10–15% of the image. Avoid turning the entire image blue. </code></pre> #### Purple accent <pre data-overflow="wrap"><code><strong>Primary atmosphere: Warm ivory, stone, fog gray. </strong> <strong>Accent: Muted lavender-purple. </strong> <strong>Purple appears in: </strong>- geometric overlays - atmospheric haze - focal architectural elements Purple should occupy roughly 10–15% of the image. Avoid purple-tinted skies or monochromatic color grading. </code></pre> # Payroll #### U.S. Employees and Contractors <a href="#block-cf187d5ed775483fb186fe0f01aa4d91" id="block-cf187d5ed775483fb186fe0f01aa4d91"></a> **Employees** * Full-time, U.S. employee payroll is managed via the U.S. payroll system. * The Accounting Team will onboard a new employee in the U.S. payroll system. * If the new employee resides in a new state, the People Operations Team, along with the Accounting Team, will complete required new state registrations and set up payroll tax accounts through our registered agent services. We will also purchase worker's compensation insurance through our U.S. payroll system. New account details should be saved in OCV’s password manager. * The Accounting Team runs payroll on a semi-monthly payroll schedule. Employees are scheduled to be paid on the 15th and last day of the month. Payroll is generally processed \~3 business days prior to pay day. * Employees are expected to complete their onboarding process through the U.S. payroll system and set up direct deposits for their payroll. * Employees can also view their pay stubs on the U.S. payroll system. **Contractors** * Full-time and part-time U.S. independent contractors are expected to track their hours worked in the U.S. payroll system. * Hours will be reviewed by manager(s) and the Accounting Team 2 business days prior to the 15th and last day of the month for semi-monthly payroll processing. * If a contractor is operating under an entity, payments will be processed via an e-payment system for vendors. Contractors must send their invoices to OCV’s billing group email for payment processing. Also see[💵Vendor Payments & Invoicing](https://handbook.opencoreventures.com/ocv-finance-operations/vendor-payments-and-invoicing/). #### Non-U.S. Based Employees and Contractors <a href="#block-ce59de333ae8413faeaa797180f67abb" id="block-ce59de333ae8413faeaa797180f67abb"></a> * Payments related to the contracted services are processed by the international payroll system monthly. * For contracted non-U.S. team members, a completed W-8BEN Form is collected during the[ ](https://handbook.doublegdp.com/Finance/Payroll/#pilot)international payroll system onboarding process. * Expense reimbursement reports from the non-U.S. team members are required to submit in the international payroll system. If you have any questions or concerns about the status of your payment, please contact the Accounting Team. # Expenses ## Expenses and Reimbursement OCV has a three types of corporate credit cards, a shared Accounting Card, a shared Pre-launch Card, and each employee receives an Individual Card. 1. The Accounting Card should be used for general business expenses not attributable to an individual including paying for any broad business services or software, or purchasing equipment for new employees. 2. The Pre-Launch Card should be used as a placeholder for payments related to portfolio companies before their own Brex cards are set up. 3. The Individual Card is intended for business expenses that are directly attributable to a specific employee, such as travel or other reimbursable costs incurred in the course of their work. #### 💳 Individual Corporate Credit Card <a href="#block-35c9a7d2742b45bf9af498915ed3470c" id="block-35c9a7d2742b45bf9af498915ed3470c"></a> Corporate credit cards are intended for limited, business-related expenses that are small in value or one-time in nature. They should not be used as a substitute for the standard vendor onboarding and procurement process. The firm expects employees to exercise sound judgment and discretion when using corporate credit cards. In general, individual cards may be used for: * Low-dollar purchases * One-time or infrequent transactions * Urgent operational needs where standard processing is not practical * Travel-related expenses, where applicable under company policy Corporate cards should not be used for: * High-value purchases * Engaging new vendors that should be formally onboarded * Circumventing established procurement or approval workflows Reporting Requirements: * The IRS requires a receipt for all transactions over $75. * Make sure to submit an itemized receipt, not the credit card payment total * All transactions require a memo to document the business case (for accounting / expense classification purposes) * For business meals or client meetings, * List the business purpose and the names of all participants in the memo * The most senior colleague should pay for the bill * Employees are responsible for adding the receipt and memo in the corporate card system by each month-end #### 🪙 Out-of-Pocket Expense Reimbursement <a href="#block-15d49b988c2843f3803c9c09f716faf2" id="block-15d49b988c2843f3803c9c09f716faf2"></a> For out-of-pocket expense reimbursement, employees can submit an expense report through OCV’s payroll system. Employees must submit their receipts within 90 days of receipt date to receive reimbursement. WSTCs Accounting Team will process expense reimbursement after Management review and approval. Expenses approved prior to the upcoming [payroll processing date](https://handbook.opencoreventures.com/ocv-finance-operations/payroll/#51d112cea3ce410e985ee526e1725bc8) will be reimbursed on the following pay cycle. #### ✈️ Travel Expense Policy <a href="#block-02b73ae838d847f587993b30c7396bd6" id="block-02b73ae838d847f587993b30c7396bd6"></a> All business travel needs to be pre-approved by the COO. Employees are expected to complete a [pre-travel approval form](https://docs.google.com/spreadsheets/d/15dsNy57cbBlUSOidN86CKpqkg2a2a46i/edit?usp=sharing\&ouid=114605482382680978191\&rtpof=true\&sd=true) with estimated total cost of the trip. **Travel expense guidelines** 1. OCV will cover work-related travel expenses. This includes lodging and meals during the part of the trip that is work-related. Depending on the distance of your travel, this may include the day before and the day after work-related business. 2. OCV will cover costs related to commuting to and from a destination or airport which is work-related. This includes public transit, ride-sharing services (Lyft, Uber, etc.), or personal vehicle mileage between one's home and airport, bus/rail station, or work-related meeting. 3. Always bring a personal credit card and your corporate card with you when traveling for company business. 4. If you incur any work-travel related expenses (on your personal card or company card), save the original receipt. 5. When your trip is complete, please file out of pocket expenses for reimbursements within Brex. For company cards, please upload memos and receipts in the purchasing card dashboard. 6. OCV will accommodate reasonable custom travel requests. You may extend your trip for personal reasons if you choose. Any additional costs associated with extended stays are your responsibility. ## Expense Allocation There are many entities within the organization. As a default practice, we ask our vendors to bill the appropriate entity for which services/goods were rendered. **Reimbursements Across Entities** Occasionally, OCV may need to cover payments on behalf of another entity. These payments are recorded as receivables on OCV’s balance sheet. Once the entity can process invoices, OCV will request reimbursement at actual cost by submitting receipts to the entity's accounting department.Table below highlights typical expense categories by entity type. | **Management Company** | **OCV Funds** | <p><strong>OCV Companies</strong> </p><p>(see <a href="/pages/4d5ChSaGO6R2d4O1cchq">Pre-Launch Costs</a> for policies and spend request process)</p> | | -------------------------------------------------------------------------------------------------- | ------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------- | | Operating costs (i.e. payroll for OCV team, systems, etc.) | Deal-specific expenses (primarily legal, travel, etc.) | Company operating costs (payroll, fixed assets, systems subscriptions, etc.) | | Content production for OCV blog posts including new company launch announcements | Fund admin fees | Company-specific legal fees (including entity formation) | | OCV-specific legal & accounting needs and non-company specific work that benefit all OCV companies | Tax services for funds (GP and LP entities) | Outsourced HR & recruiting services | | Catalyst program sponsorship payments | ㅤ | Marketing (including contract content writers, etc.) | | ㅤ | ㅤ | Outsourced accounting & tax services | | ㅤ | ㅤ | Corporate taxes and statutory filings | **Guardrails on Unusual Activity** The Accounting and Finance team conducts ongoing reviews of company accounts to identify unusual activity. Transactions that appear inconsistent with policy or business purpose may be reviewed more closely. We operate in a high trust environment and expect employees to exercise sound judgment, diligence, and integrity when incurring and submitting business expenses. --- [Next Page](/llms-full.txt/1)