The Silliness Of Recapping Seed Rounds
Feld Thoughts
JULY 14, 2015
So they recapitalize the company. The term sheet converts all the convertible debt into a post-money valuation of $100, essentially making the convertible debt worthless. The new money comes in at a pre-money valuation of $100, but includes a complete refresh of founder equity to 40% of the company.
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