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.

Startup 290

Startup Burn Rate Warrant Bankruptcy 290

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.

Pre-Money Valuation 132

Pre-Money Valuation Valuation Equity Liquidation Preference 132

Professor VC

APRIL 7, 2011

In cases where it is truly a bridge financing (i.e. Others will attempt fire sales. I take CFO roles in early stage companies and participate on the management team during the early financings and business model development phases. Particularly, now that standard Series Seed docs are commonly used.

San Jose 36

San Jose Technical Review Angel Investor Valuation 36

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. They’ll look at the management of the business and who the people are that are applying for the loan, what their experience is. No minimum sales from the sales standpoint.

Small Business 89

Small Business SBA Finance Bankruptcy 89