4) Type of Shares: Common Stock. 5) Par Value of Common: $0.0001. 7) Founders Equity Split: Depends on the Team, But Quickly and After the Awkward & Difficult Conversations. Here’s what I’d do in the beginning: Incorporation. 1) Entity Choice: Corporation or Corporation. 8) Vest Founders Shares?: MORE >>

In fact, it seems very rare to see a convertible note without a price cap these days, although it was fairly common to raise convertible debt without a price cap a couple of years ago. logical alternative to convertible debt is a priced Series A preferred stock financing. Seth Levine asks, “ Has convertible debt won? MORE >>

Define equity type. The first capital a young company receives usually takes the form of common stock, the same class of shares the founders hold. Remember a term sheet agreement is not a deal until the check clears. But due diligence and paperwork take time, and can change everything. Seat on the board. Right of first refusal. MORE >>

After the recent announcement of the Series Seed Financing documents by Marc Andreesen, Brad Feld points out  that there are now four sets of “open source&# equity seed financing documents: TechStars Model Seed Funding Documents (by Cooley). Combinator Series AA Equity Financing Documents (by WSGR). Pro rata with common. MORE >>

If there is more than one founder, the likelihood of an argument about how the equity should be split in the new company increases dramatically.  Incorporating a company and issuing stock to the founders will help prevent misunderstandings among the founders about equity splits.  Issuing stock options.  Obtaining visas.  MORE >>