Trending Sources

Knowledge Is Power: Convertible Note Financing Terms, Part II

Gust

Last week , we gave some attention to the “why” behind convertible note financing for early stage startups.  In this installment, I’ll dig into the “how” by dissecting an example term sheet based on a real deal.  Amount of Financing :  Up to $600,000 may be issued. This paragraph is the heart of the whole deal

Which books would you recommend to a VC analyst-associate?

Gust

Insights from Leading Practitioners on the Art of Raising a Fund, Deal Structuring, Value Creation, and Exit Strategies. Venture Deals. Venture Capital, Private Equity, and the Financing of Entrepreneurship. The Business of Venture Capital. Raising Venture Capital for the Serious Entrepreneur. Mastering the VC Game.

Startup Blog: Take a Stand!

Taffy Williams

It may be around deal structure, testing or design of product, new hires, downsizing or firing, how much to spend on a program or some other issue.

How to value your company for sale (Part 2)

A Smart Bear: Startups and Marketing for Geeks

Remember how the buyer has his own way of valuing the deal ? Would you take a lower “number&# to get Deal B? Do you prefer Deal B?

Sales 38

Finding Investors is highly dependent on your ability to network

Taffy Williams

The deal structures will vary significantly dependent on their experience investing in early stage companies. It will serve you well!

Knowledge Is Power: Convertible Note Financing Terms, Part V

Gust

As we conclude our convertible note financing series, there are assorted terms commonly seen in term sheets and deal documents that are worth touching on briefly. The Note Purchase Agreement and Convertible Promissory Note are essential documents for any convertible note financing. Convertible Promissory Note(s).

Knowledge Is Power: Convertible Note Financing Terms, Part IV

Gust

In Parts II and III, we looked at commonly used mandatory and voluntary conversion language in convertible notes.  To account for scenarios in which the startup is acquired before it has a chance to complete a priced equity financing round, most term sheets and deal documents contain a “ change in control ” provision. 

Dialing for Dollars

Taffy Williams

One greatway to get non-dilutive financing is by partnering a product you may not wishto develop or sell yourself. Having a business advisorand a great corporate counsel is important to the final deals structure. One local VC indicated they review more than 600 deals per year andinvest in around 6.

Keeping a Seed Financing Round Open

The Startup Lawyer

Startups don’t want to wait until every investor is ready before closing on a seed financing round. Therefore, most seed financings allow for an initial close (i.e., But in order to properly accomplish this, your startup will have to keep the round “open&# via the deal documents.

Keep Term Sheets Simple for Quicker Cash to Spend

Gust

Remember a term sheet agreement is not a deal until the check clears. Due diligence and paperwork take time, and can change everything.

Notes on the acquisition process

Chris Dixon

Ten years ago, startups financing was an insider’s game. Moreover, some public companies insist that you don’t talk to employees until the deal is closed or almost closed. As with financings, acquisitions take a long time and involve lots of meetings and difficult decisions. Talk to industry analysts, investors, etc.

Both sides must be fair in a term sheet negotiation.

Berkonomics

Just a few of these terms include vesting, corporate structure, governance principles, financing strategy, valuation and exit strategy.

Keep Term Sheets Simple for Quicker Cash to Spend

Startup Professionals Musings

Remember a term sheet agreement is not a deal until the check clears. But due diligence and paperwork take time, and can change everything.

The 10 Best Real Estate Schools Compared: Meet the Winner!

Blogtrepreneur | Entrepreneur Blog

Development, finance, investment, valuation, project management, law, market analysis, digital imaging and economics.

Later-stage rounds and “setting the bar too high”

Chris Dixon

I recently had a number of conversations with CEOs of later-stage startups (generating significant revenue) that went something like this. startups

Signaling Pricing Expectations Early in Seed Investment Discussions

Genuine VC

Sharing these expectations early in potential lead investor discussions fundamentally qualifies the conversations, but it also runs the risk of prematurely losing a potential financing partner or reducing options to maximize a financing process outcome. But, also by definition, that just can’t be the case. 

That convert you raised last year is a part of your cap table

Seth Levine's VC Adventure

When it comes to convertible debt, I’ve had a few instances recently where “out of sight, out of mind” has created some misunderstandings around deal structures. Given the prevalence of convertible debt as a seed financing instrument, an increasing number of companies we look at have some kind of convert in place.

That convert you raised last year is a part of your cap table

Seth Levine's VC Adventure

When it comes to convertible debt, I’ve had a few instances recently where “out of sight, out of mind” has created some misunderstandings around deal structures. Given the prevalence of convertible debt as a seed financing instrument, an increasing number of companies we look at have some kind of convert in place.

allensblog: "Fully-Diluted"

Allen's Blog

In a deal recently, the term sheet offered by the prospective investor contained a reference to the term: "fully-diluted" The company accepted the term sheet and the lawyers drafted the documents. allensblog. Thoughts from a startup sherpa. Archives. Profile. Subscribe. Whats a Home Run (in VC-speak) » July 12, 2011. Sign Out.

'Show Me the Money' Tips for Business Sellers

Fresh Inc.: The Staff Blog

This saves a significant amount of time, given that a buyer can immediately start working with a lender who is already familiar with your deal.

NDA 7

Why Selling Your Company is Like Dancing With the Stars

Fresh Inc.: The Staff Blog

While it may look simple, one misstep could easily cost a business owner millions of dollars or scuttle the deal altogether. Really.

A Primer on Angel Investment ‘Simple Term Sheets’

Startup Professionals Musings

Remember a term sheet agreement is not a deal until the check clears. But due diligence and paperwork take time, and can change everything.

A Summary of Current Trends in Canadian Mergers and Acquisitions - 2011

Recent Buzzes - VC Experts, Inc.

With keen international interest in Canada's resource sector, the return of financial buyers, strategic investors looking to pursue acquisitions as a means of increasing earnings, and the recent uptick in Canadian "mega-deal" activity, there is no better time to discuss the M&A trends unfolding in 2011. HOSTILE DEALS. targets. Awards.

Why Leave A Six Figure Corporate Job For Internet Entrepreneurship?

Entrepreneurs-Journey.com by Yaro Starak

Professionally, I am a Certified Public Accountant (CPA), may also be called a Chartered Accountant (CA) on your side of the globe, a Finance Charter-holder and a Certified Financial Planner. understand personal finance. worked out a similar deal the next go around, and the snowball started rolling from there. Same as above.

Build Your Startup on a Vacant Domain Name

David Teten

That’s why our portfolio company Plated.com decided to structure a lease option – they offered the prior owner a small monthly lease fee for 1 year, with an option to buy at the end of the year. There is no standard template for a deal with a domain name owner.  You don’t need a lot (or any) cash to get a great domain name. 

Build Your Startup on a Vacant Domain Name

David Teten

That’s why our portfolio company Plated.com decided to structure a lease option – they offered the prior owner a small monthly lease fee for 1 year, with an option to buy at the end of the year. There is no standard template for a deal with a domain name owner.  You don’t need a lot (or any) cash to get a great domain name. 

Clean Deal Terms

David Lee

He said one thing there that I agree with 100%, among others: I have an allergic reaction to complex deal structures, as they invariably end up with all sorts of unintended consequences. Lately I’ve seen more complex “deal terms” in early stage financings. link). typical number might be 50%.

What Entrepreneurs Should do about Price Fixing

Both Sides of the Table

How well financed is the competition? Deal with it.&#  And as I’m sure you’re aware shit rolls down hill. At what valuation?

in search of.the ideal term sheet

Seed Stage Capital

For any large deal, they will convert and be treated like the founders and employees. You can download it on docstoc here. Please share it!

The downside of high valuations

StartupCFO

When it comes to deal structuring, the higher you push the valuation, the more “protections&# investors will build in. This is up from 17% ( a small jump). - 53% of deals had participating prefs. So, frothy times aside, the right deal is about more than the share price today. Valuations are high.

Angel Investing is Where VC was 25 Years Ago

Angel Blog

As I attended sessions, and had conversations, on everything from deal structures to term sheets and deal flow to exits, it occurred to me that I had been in similar conferences about 25 years ago. When I was a young entrepreneur, part of our plan was to finance our growth with venture capital. Those are the fundamentals.

Startup Blog: 7 Questions You May Get from Potential Investors

Taffy Williams

also try very hard to not give the answer unless we are approaching the investors with a very specific deal structure for the investment.

Goldman Sachs / SEC: political witch-hunting is no way to change a market

Fred Destin

In other words, we need to hack finance, not some random financiers who just happened to be the smartest guys in the room at the time. Nasty ?

Cracking The Code: The Bessemer 10 laws of SaaS - Fall 2008.

Cracking the Code

simple example would be if Customer A signs a one-year deal at $10,000 per month, and Customer B signs a three-year deal at $5,000 per month.