article thumbnail

Flexible VC, a New Model for Companies Targeting Profitability

David Teten

From RBI, Flexible VCs borrow the ability to reap meaningful returns without demanding founders build for an exit. From traditional equity VC, Flexible VC borrows the option to pursue and reap the rewards of an outsized exit. Flexible VC 101: Equity Meets Revenue Share. Equity Ownership. Yes, typically preferred equity.

article thumbnail

Startup Funding – A Comprehensive Guide for Entrepreneurs

ReadWriteStart

In very few specific cases, depending on the nature of the business, the business model might demand a considerable gestation period or extensive research and development. Forms of funding. ? Equity investment. Equity investment is the most popular and most talked-about avenue for startup funding. Equity investors.

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

8 Keys To Maximizing Your New Venture Stock Net Worth

Startup Professionals Musings

When an entrepreneur first incorporates a business, they may find themselves the proud owner of 10 million shares of common stock, commonly called founder’s shares. This is called stock dilution control. Facilitate an upgrade of founder’s common to founder’s preferred.

Stock 240
article thumbnail

What is convertible equity (or a convertible security)?

Startup Company Lawyer

Quick answer: convertible equity (or a convertible security) is convertible debt without the repayment feature at maturity or interest. ” In response, Seth Levine wrote a very thoughtful post on convertible debt versus equity. Fred Wilson has been openly critical of convertible debt , and prefers priced equity rounds.

article thumbnail

How To Prevent Your Founder’s Shares From Vaporizing

Startup Professionals Musings

When an entrepreneur first incorporates a business, they may find themselves the proud owner of 10 million shares of common stock, commonly called founder’s shares. This is called stock dilution control. Facilitate an upgrade of founder’s common to founder’s preferred.

Vesting 298
article thumbnail

7 Investor Term Sheet Demands Startups Need Not Fear

Startup Professionals Musings

Investors, on the other hand, look at the money figure, and even the equity, as the easy part. This is a loan with an option to convert to equity at a later date. For later investments, the price is equity, with a percentage of the owner stock to be assigned to the investor. Type of stock assigned to the investor.

article thumbnail

Comparing Startup Accelerators

Austin Startup

The below outlines how I would approach the decision: Cash and Equity. Very simply, what are you giving and what are you getting in return in terms of cash and equity for joining the program? More traditional and comprehensive programs often require 5–8% of common stock, but often provide between $20K and $100K up-front as well.

Startup 48