Gust
SEPTEMBER 29, 2011
For a traditional VC financing round structured as a sale of preferred stock, the best resources I can recommend are the Term Sheet Series by Brad Feld and Jason Mendelson and Startup Company Lawyer by Yokum Taku. Knowledge is power. Let’s take it from the top: Why convertible notes? There are two principal reasons.
Both Sides of the Table
MAY 23, 2010
a loan) that is later converted to equity at the time of the next financing. If no financing happened then this “note&# may not be converted and thus would be senior to the equity of the company in the case of a bankruptcy or asset sale. It starts as a debt instrument (e.g.
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Up and Running
JUNE 25, 2014
You may be a manufacturer or a distributor and you can buy the products that you sell for pennies on the dollar because one of your suppliers is having a fire sale. The cost: it’s much more profitable for traditional lenders to do a two million dollar loan, or a three million dollar loan than doing a $150,000 loan or $100,000 loan.
K9 Ventures
MARCH 23, 2011
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.
www.copelandfirm.com
OCTOBER 21, 2010
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