For those of you who know Sim Simeonov, you won’t be surprised or disappointed. He has developed and posed on his site, fastignite.com , a set of start-up tools together with commentary. The tools are good; the commentary is better. The initial set of tools covers (1) calculating true pre-money valuation, (2) getting a better Series A deal, (3) a vesting calculator for options and restricted stock, and (4) option exercise and sale.

With respect to the true pre and post money valuation, Sim points out that Fred Wilson has an insightful post on this topic. I think I agree with what Sim and Fred say on the subject, but I also think it sounds more ominous than it is. Keep in mind that the investor is assuming you will have to spend equity to attract talent. This is analogous to having to spend money for capital expenditures. It has to be a budgeted cost and has to be "in the mix" when you negotiate your deal. Your investor will not overlook this "cost." It will be built into the investor’s valuation assumptions. You just need to look at it the same way. A company that needs to spend money to acquire and IP license is not going to get the same valuation as one that does not (all other factors being equal).