Both Sides of the Table

MAY 23, 2010

Often when startups who have raised venture capital need another round of financing they will turn to their existing investors to give them money before raising from outsiders. a loan) that is later converted to equity at the time of the next financing. They might not replace an engineer or two that quits.

Startup 290

Startup Burn Rate Warrant Bankruptcy 290

Both Sides of the Table

MAY 15, 2010

Clearly a startup should consult its lawyer before filing or not filing.But the attorneys I relied on to write this piece told me that they’ve done lots of Section 4(2) deals in the past, and would recommend it to clients who had relatively simple financing agreements (not tranched-out, not too many investors, etc.) Short answer: no.

Stealth 285

Stealth SEC Advertising Accredited Investor 285

venturehacks.com

OCTOBER 21, 2010

Reading on, the term sheet states, “The $8 million pre-money valuation includes an option pool equal to 20% of the post-financing fully diluted capitalization.&# Lead Engineer 0.5 – 1 5+ years experience Engineer 0.33 – 0.66 Manager or Junior Engineer 0.2 – 0.33 If they don’t, hooray for you.

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68