Gust

SEPTEMBER 29, 2011

The most successful serial entrepreneurs in the world may found three or four, perhaps even eight or ten venture-backed startups over the course of their careers. It should therefore come as no surprise that an asymmetry of information exists, mostly gleaned from experience, between founders and investors in a venture financing deal.

Finance 178

Finance Term Sheet Preferred Stock Bridge Financing 178

Business Plan Blog

NOVEMBER 13, 2013

The first milestone in a new startup’s financing is called ‘Seed Capital’ which refers to the initial investment raised by the founders from their friends and family, or commonly referred to as FFF (Friends, Family and Founders), who mostly use their personal assets. *The Convertible Debt Financing. Raising Seed Capital.

Finance 93

Finance Accredited Investor Angel Investor Seed Capital 93

The Next Web

JUNE 17, 2015

Giving up equity in your business, as an alternative to paying cash, often sounds like a great idea to cash-starved startups. But, giving up equity in your business is often a very big decision, and can come at a long-term price, both financially and operationally. I wouldn’t be giving out equity to any and all service providers.

Equity 60

Equity Valuation Preferred Stock Common Stock 60

Gust

OCTOBER 5, 2011

Last week , we gave some attention to the “why” behind convertible note financing for early stage startups. As with so many subjects in law and finance, mastering the jargon is half the battle. This may seem like a no-brainer now that you understand the basic structure of a convertible debt financing.

Finance 79

Finance Preferred Stock Term Sheet Early Stage 79

Scott Edward Walker

APRIL 9, 2012

Introduction We are in the golden age of seed financing. Venture capital funds, seed funds, super angels, angel groups, incubators, and “friends and family” are all playing the seed financing game and investing early in startups in an attempt to land the next Facebook. A convertible note is short-term debt that converts into equity.

Preferred Stock 87

Preferred Stock Finance Common Stock Liquidation Preference 87

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. Simply put, pro rata rights permit the investor to maintain its percentage ownership in subsequent financing rounds. Introduction. Pro Rata Rights.

Preferred Stock 56

Preferred Stock Term Sheet Dilution Stock 56

Growthink Blog

MAY 10, 2012

When seeking equity investments, the source of capital is, for the most part, tied to the stage of capital being raised. You see, equity capital is raised in stages or rounds. Mezzanine Financing Most companies that raise equity capital and are eventually acquired or go public receive multiple rounds of financing first.

Equity 88

Equity Mezzanine Later Stage Venture Capital 88

Gust

OCTOBER 21, 2011

This week we move on to something near and dear to the hearts of entrepreneurs and investors alike: The exit, more formally known as a “ liquidity event.” Entrepreneurs generally don’t ask for this kind of language, but most sophisticated investors will insist on it in one form or another. Most would agree this is not a fair outcome.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

Both Sides of the Table

SEPTEMBER 5, 2012

This time by the efforts of Adeo Ressi to introduce a new kind of structure called “ convertible equity.” My initial reaction to Adeo when we spoke was that while it may have solved some issues (debt versus equity) it didn’t solve the ones that I’ve been warning entrepreneurs about most loudly.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

VC Cafe

OCTOBER 23, 2010

While there aren’t many issues to negotiate in simple equity financing at that stage, there’s been some debate in the venture capital and angel community on whether startups should use series seed documents or capped convertible debt. Preferred Stock Purchase Agreement Series Seed Form SPA.

Early Stage 79

Early Stage Term Sheet Preferred Stock Equity 79

Tim Keane

JANUARY 12, 2010

Please see later version of this post on May 16, 2010 Entrepreneurs are often not experts in the area of term-sheet negotiations and all of the surrounding issues.   Investors sometimes “present” the terms they’d like and expect the entrepreneurs to react. Term-sheets and Valuations: Thinking about Negotiations.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Gust

JULY 18, 2012

Yet I’ve rarely seen entrepreneurs more fired up than when recounting war stories of startups whose founders had control of the company wrested from them, were forced to take financing or compensation deals on outrageously onerous terms , or worst of all, fired from their own companies.

Stock Options 188

Stock Options SEC Stock Government 188

K9 Ventures

MAY 14, 2011

This is probably the very first group that an entrepreneur who is starting out may approach for some funding for his or her idea. The incubators invest usually for an equity stake and buy equity at a extremely low valuation (for example, 7% for $15,000, which implies a pre-money valuation of less than $200,000). Common Stock.

Preferred Stock 125

Preferred Stock Seed Stage Incubator Early Stage 125

Both Sides of the Table

APRIL 14, 2010

It’s meant to be a bit provocative but the reality is that I give this advice to entrepreneurs all the the time and I usually leave the “e&# off of the end. I normally offer this advice in the capacity of really wanting to help entrepreneurs so please bear with me. Take liquidation preferences head on.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Pre-Money Valuation 289

ReadWriteStart

JANUARY 28, 2022

With the rise of startups and growing businesses , it has become more critical for investors to have a thorough understanding of equity to be aware of all of the advantages they are receiving from the companies they have invested in. What is Company Equity? Types of equity. Common stock. Preferred shares.

Valuation 108

Valuation Equity Warrant Common Stock 108

The Startup Lawyer

MARCH 11, 2010

I welcome these and future standardized seed funding docs because they provide entrepreneurs with the chance to take a look at financing terms. And since the model seed funding documents aren’t as cumbersome as those used in a typical Series A Round, I find that entrepreneurs tend to actually review them. Conclusion.

Delaware 49

Delaware Hockey Stick Preferred Stock Open Source 49

Professor VC

DECEMBER 26, 2012

For those readers not already familiar with this concept, it refers to the bottleneck for Series A financing created by the increasing number of seed financings and constant number of Series A financings. Is it a good thing that so many entrepreneurs are able to get $250K - $1.5M in seed financing? HELL YES!!!

Finance 48

Finance Angel Investor Private Equity Preferred Stock 48

The Startup Lawyer

MARCH 11, 2010

I welcome these and future standardized seed funding docs because they provide entrepreneurs with the chance to take a look financing terms. And since the model seed funding documents aren’t as cumbersome as those used in a typical Series A Round, I find that entrepreneurs tend to actually review them. However, most (all?)

Delaware 45

Delaware Hockey Stick Preferred Stock Open Source 45

Startup Company Lawyer

JULY 20, 2009

At some point, however, an entrepreneur will need to formally incorporate a company. 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. Issuing stock options. Several reasons exist for taking the step to incorporate.

IP 67

IP Stock Options Preferred Stock Capital Gains 67

Professor VC

JANUARY 17, 2008

I think the title of this post is a TV show, but fitting as there has been much debate in the venture community as to the whether angel investors are good or bad for entrepreneurs and VCs. One group charges entrepreneurs "an administrative fee" to present to the group. Touched by an Angel.

Pre-Money Valuation 28

Pre-Money Valuation Angel Investor Angel Groups Valuation 28

Tim Keane

APRIL 12, 2006

Ten questions the entrepreneur should ask the (prospective) investor. If they’re making it as part of a group that the entrepreneur likes, fine. If they are “solo,” though, the entrepreneur will want to know a lot about their attitudes and expectations, especially when things go wrong. » April 12, 2006.

Entrepreneur 60

Entrepreneur Valuation Sweat Equity Common Stock 60

www.mattbartus.com

DECEMBER 9, 2012

an option to purchase shares in the future at a pre-determined price) to the investor to purchase preferred stock at the Series A price. I just worked on a financing for a company that received a term sheet from a group of VCs at a $7 million pre-money valuation. Equity for Consultants - Keep. link] Roy Rodenstein.

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40

Both Sides of the Table

SEPTEMBER 8, 2012

If you do a capped note it’s bad for the entrepreneur. It has both a “full rachet” and “multiple liquidation preferences.” Here is what I recommend very often – privately – to startup entrepreneurs for angel funding. You can do it with equity & a price. Price the round.

Pre-Money Valuation 294

Pre-Money Valuation Finance Liquidation Preference Warrant 294

Up and Running

MAY 23, 2016

To give you a better idea of what entrepreneurs in this industry are thinking about during each phase of the startup process, I interviewed SaaS entrepreneurs from all over the world, including our own COO Noah Parsons. Practical Market Research Resources for Entrepreneurs. Step 5: Get financed. How to Do Market Research.

Software Review 74

Software Review Software Delaware Forecast 74

Gust

OCTOBER 3, 2011

For a first time entrepreneur trying to figure out the arcane world of startup financing, it can be very confusing to understand the roles that different types of investors play in funding promising companies, as well as the point in a company’s life at which they enter the stage. From +/- $1.5m

Finance 70

Finance Venture Capital Intellectual Property Early Stage 70

Gust

OCTOBER 26, 2011

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.

Finance 79

Finance Term Sheet Covenant Accredited Investor 79

techcrunch.com

SEPTEMBER 2, 2012

Convertible Equity, A Better Alternative To Convertible Debt? As a refresher, a convertible note is a loan that automatically converts into equity upon the closing of a Series A round of financing. In the end, Ressi says that Convertible Equity allows startups and investors to have their cake and eat it too. Smartphones.

Equity 87

Equity San Francisco Technical Review Angel Investor 87

www.vccafe.com

MARCH 11, 2013

A group of Seedcamp entrepreneurs started a startup tools wiki for that purpose, and we thought it would be well suited here. easy business finance software. YCombinator Series AA Equity Financing Documents. List of Angel/SuperAngel Investors for entrepreneurs. Founder Equity Issues. Founder Equity Issues.

Software Review 53

Software Review Technical Review Startup 53