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Keep Term Sheets Simple for Quicker Cash to Spend

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It’s true that angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists. The first capital a young company receives usually takes the form of common stock, the same class of shares the founders hold. Outline multiple tranches.

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Knowledge Is Power: Convertible Note Financing Terms, Part IV

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In descending order of preference from the founders’ point of view: 1. Having covered just about every path a convertible note can take, we’ll finish up the series by looking at a few miscellaneous term sheet items and revisiting the pros and cons of different deal structures.

Finance 79
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Knowledge Is Power: Convertible Note Financing Terms, Part II

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With this deal structure, the angel is relying on the Series A investors to negotiate fair terms of the Preferred Stock that he or she will ultimately receive in the conversion, but has no opportunity to directly negotiate those terms.

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Knowledge Is Power: Convertible Note Financing Terms, Part V

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Common examples include papering founders’ stock issuances, catching up on Board minutes, and ensuring that all members of the team have entered into IP agreements with the company assigning rights in their work to the startup.

Finance 79