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Bad Notes on Venture Capital

Both Sides of the Table

There are a million ways to do quick, easy, low-cost rounds with prices. But founders these days seem strangely unfocused on finance and on terms that could hurt them even though we fought to the death about these same terms 10 years ago. These are all real conversations. Startup Lessons' Thanks for asking.

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Knowledge Is Power: Convertible Note Financing Terms, Part I

Gust

The most successful serial entrepreneurs in the world may found three or four, perhaps even eight or ten venture-backed startups over the course of their careers. It should therefore come as no surprise that an asymmetry of information exists, mostly gleaned from experience, between founders and investors in a venture financing deal.

Finance 178
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How to Evaluate an Offer from a Startup Incubator

The Startup Lawyer

Great news — your startup just got accepted to an incubator! But before your startup signs up and cashes that $[XX,000] check, your startup’s co-founders should sit down and evaluate the incubator’s offer. Pre-money valuations startups receive from incubators are typically low…really low.

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Thoughts on Convertible Notes

K9 Ventures

The convertible note was really intended as an instrument for a “bridge financing” – when an equity round was imminent, and likely to occur, but the company needed some money in between. In that case, it made good sense to have a debt instrument, where the note holder then converted into equity when the financing occurred.

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The Option Pool Shuffle

venturehacks.com

Venture Hacks Good advice for startups. If you don’t keep your eyes on the option pool, your investors will slip it in the pre-money and cost you millions of dollars of effective valuation. Given that many companies are doing convertible note bridge financings as their seed round, this seems to come up relatively often.