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Should you raise on convertible notes or do an equity round?

Hippoland

A reader named Turner Dean recently asked me whether it’s better to raise seed money on convertible notes or straight-up equity. In general, I’m a big fan of convertible notes or convertible securities for seed stage founders. Flexibility With an equity round, there’s a specific amount of money you are raising.

Equity 48
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The Legal Side of Entrepreneurship

YoungUpstarts

They also need to decide whether to structure terms as an equity deal or a convertible security deal. “If you’re going to raise $1 million, my advice is to propose a convertible security, because you can get it done quickly and less expensively,” said Schmitz. Convertible Securities.

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A primer on convertible notes, convertible securities, and equity

Hippoland

Equity Traditionally, investors have invested in companies to receive equity, or shares in a company. The concept of equity rounds (also called priced rounds) is very straightforward. And as you raise money at later stages, you will most likely be raising equity rounds. The results are binary.

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More Tech Startups are LLCs

Austin Startup

C-Corp largely because (i) VCs have historically favored C-Corps for nuanced tax and other reasons, and (ii) virtually all of the standardized legal infrastructure around startup finance and equity compensation assumes a C-Corp. However, times are changing. If you are an LLC tech startup, you need tax counsel.

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Raising Startup Capital Through Convertible Debt Financing

Business Plan Blog

Some well-known Silicon Valley angel groups are Band of Angels, Sandhill Angels, TIE angels and others. Among the most common methods of funding used by startups when raising seed capital is “Convertible Debt Financing.” Bridge notes/loans are an example of convertible debt. Pros and Cons of Convertible Debt.

Finance 93
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Knowledge Is Power: Convertible Note Financing Terms, Part II

Gust

This may seem like a no-brainer now that you understand the basic structure of a convertible debt financing. At least one well-known Silicon Valley venture accelerator is using a document referred to as a “ convertible security ” rather than “convertible promissory note.”

Finance 79
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Pre-seed is the new seed

Hippoland

So, I thought it might make sense to take a step back and talk about all the stages of early stage fundraising here in the Silicon Valley. In early stage investing, at least in Silicon Valley, there are basically 4 stages: pre-seed, seed, post-seed (or pre-A), and series A.