Both Sides of the Table

SEPTEMBER 18, 2014

At an accelerator … Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Business Plan Blog

NOVEMBER 13, 2013

Most startup founders do not have enough capital to launch their companies and need to raise money at some point. FFF investing is not a short-term play and mostly investors do not get a return on their investment immediately. Individual investors who provide financial funding to startups are called ‘Angel Investors.’

Finance 93

Finance Accredited Investor Angel Investor Seed Capital 93

Startup Company Lawyer

AUGUST 31, 2012

Over the past few years, convertible debt has emerged as a quick and inexpensive method for startup companies to raise money from angel investors and early stage venture funds. One major concern about convertible debt is that it eventually needs to be repaid if another round of financing doesn’t occur. Background.

Convertible Security 73

Convertible Security Equity Security Preferred Stock 73

Gust

OCTOBER 12, 2011

Last week , we took the plunge and began dissecting an example term sheet for a convertible debt financing round piece by piece. I’ll continue with more specific terms and wrap up next week with some thoughts about recent changes and trends for the future. First, a word about the maturity date.

Finance 107

Finance Term Sheet Pre-Money Valuation Early Stage 107

Gust

OCTOBER 21, 2011

For convertible notes, the only liquidity event we need be concerned with is an acquisition of the startup in the near future, before the maturity date; otherwise, the notes will convert to equity of one kind or another, and the eventual sale of that equity (in a public offering, acquisition, or private sale) is a different subject for another day.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

Scott Edward Walker

JUNE 9, 2019

Over the past few weeks, two of my clients have received financing term sheets in which the investors requested super pro rata rights. Accordingly, I thought it would be helpful for founders to discuss these rights and to point out the problems they create for startups. Introduction. Pro Rata Rights.

Preferred Stock 56

Preferred Stock Term Sheet Dilution Stock 56

www.mattbartus.com

SEPTEMBER 24, 2011

Perspectives on issues affecting founders, startups and investors from a veteran startup lawyer in Silicon Valley. Sometimes the consultant has a reasonable basis to think this, since lean startups are programmed to get things for free and may call on the consultant from time to time for free advice. Term Sheets.

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

Both Sides of the Table

SEPTEMBER 5, 2012

Was Paul Graham right in his “high resolution” financing post? I can’t say it much simpler than this: “What if I took some of the worst, most egregious terms in a standard term sheet and made them the defacto standard in most convertible debt deals? Let me explain it more clearly in equity terms.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

ReadWriteStart

MAY 8, 2012

Approaching investors for the first time is a daunting exercise for any startup. The best way to do that is to leverage the hard-won experience of real-world startup. Turns out that while every startup is unique, they share some common difficulties in trying to find just the right strategies and tactics for funding their companies: 1.

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Cofounder Startup San Francisco Silicon Valley 140

The Startup Lawyer

FEBRUARY 4, 2011

Great news — your startup just got accepted to an incubator! But before your startup signs up and cashes that $[XX,000] check, your startup’s co-founders should sit down and evaluate the incubator’s offer. Pre-money valuations startups receive from incubators are typically low…really low.

Incubator 105

Incubator Pre-Money Valuation Option Pool Advisory Board 105

Professor VC

JULY 25, 2013

Startup outcomes tend to be very binary. One area I''ve noticed a lot more recently are angel investors and seed stage funds trying to grab a little bit extra, whether it''s warrants for leading the round, advisor shares to go along with the investment, or a common stock stake for just being who they are.

Term Sheet 46

Term Sheet Silicon Valley Syndicate Syndication 46

www.payne.org

SEPTEMBER 22, 2011

Startup Equity For Employees. 2 Stock Classes: Common and Preferred. 5 Stock vs Options. 6 Founders / Restricted Stock. The re-heating of the venture funded tech market has pushed a heat up of the hiring market, and Im getting more calls from friends asking for help understanding startup stock (equity) offers.

Equity 56

Equity Employee Vesting Preferred Stock 56

Both Sides of the Table

SEPTEMBER 8, 2012

I recently wrote about my views that startups rounds should be priced. But Paul Graham really did have a point in his “ high resolution fundraising ” post – that there is a problem – particularly in angel financing – with herding cats. You simply draft up a series seed term sheet.

Pre-Money Valuation 294

Pre-Money Valuation Finance Liquidation Preference Warrant 294

Startup Company Lawyer

JANUARY 9, 2011

Convertible debt with a price cap seems to be the preferred structure for early-stage financings. Over the last 12 months, I’ve noticed a trend where early-stage startup companies raise seed financings of between $250K and $1M using a convertible note with a price cap. Is a priced Series A financing a valid alternative?

Liquidation Preference 57

Liquidation Preference Finance Preferred Stock Common Stock 57

Austin Startup

MAY 17, 2017

It’s pretty well known that startups usually undergo a meaningful change in Board composition at their Series A round. Less has been written about what startup boards tend to look like before a Series A round. Having a VC already on your seed-stage Board can make it harder to get term sheets from outsiders for your Series A.

Seed Stage 48

Seed Stage Startup Cap Table Angel Investor 48

venturehacks.com

OCTOBER 21, 2010

Venture Hacks Good advice for startups. You explain that the company currently has 6M shares outstanding so the investors must be valuing the company’s stock at $1.33/share: Later that evening you review the term sheet from Blue Shirt. What do you mean by “convert into common shares&# ?

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68

The Entrepreneurial Mind

MARCH 10, 2011

ownership in the Common Stock of the company. This is true in the typical areas of accounting, finance, marketing, fundraising (like other micro funds). Program Content : "Lean Startup / Customer Development in practice. It is a very active - 'jump in and swim' approach to the startup process." In return for.

Nashville 65

Nashville Tennessee PHP Ruby 65