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Revenue-Based Investing: A New Option for Founders who Care About Control

David Teten

I’ve been a traditional equity VC for 8 years, and I’m now researching new business models in venture capital. Though RBI will displace some traditional equity VC, its much bigger impact will be to expand the pool of capital available for early-stage entrepreneurs. .

Revenue 60
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Knowledge Is Power: Convertible Note Financing Terms, Part I

Gust

Another use of convertible note bridge financing is to make a quick injection of seed capital into a new startup when the investor and entrepreneur already know and trust each other; it’s better than a handshake, but far quicker and easier to complete than a real Series A round.

Finance 178
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Bad Notes on Venture Capital

Both Sides of the Table

“But lawyers will charge much more for equity.” Try doing THAT with equity. Convertible notes were previously used primarily for “inside rounds” in which the existing investors provide you with bridge financing to get to the next round. And so forth. ” Not in my experience. Employment.

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Startups and VCs Should Avoid “Pier” Funding

Both Sides of the Table

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.

Startup 290
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Thoughts on Convertible Notes

K9 Ventures

I may be well be in the minority in the Valley to think this way — especially so as a seed stage investor — but I have a strong preference for doing priced equity rounds for funding companies at any stage. Since the financing would likely happen in short order, there was no need to have a valuation cap in the note.

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How to Evaluate an Offer from a Startup Incubator

The Startup Lawyer

If an incubator offers your startup $25,000 in exchange for 6% equity, the pre-money valuation is a whopping $391,667. Rather than assign a monetary value to the intangibles, a startup should instead assign an equity percentage value to intangibles like mentorship. Conclusion.

Incubator 105
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Bad Notes on VC

Gust

But lawyers will charge much more for equity.” Try doing THAT with equity. Convertible notes were previously used primarily for “inside rounds” in which the existing investors provide you with bridge financing to get to the next round. And so forth. Not in my experience. A few M&A transactions. Employment.