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

ReadWriteStart

OCTOBER 7, 2010

Bottom line, early stage equity is very, very expensive. So at any point, if you are trying to raise money, and you are hearing from investors that you are too early and have too little validation, it may be a good thing. Sub-$2 million pre-money, it is better to bootstrap. You can register for the next roundtable here.

Valuation 119

Valuation Silicon Valley Pre-Money Valuation Bootstrapping 119

Gust

NOVEMBER 4, 2011

In brief, a cap acts to place a limit on the conversion price of a convertible note such that investors are guaranteed a minimum number of shares for their bridge loans if the startup does a priced equity round at a high pre-money valuation – “high” meaning above the cap, which is often a heavily negotiated term. (The

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

K9 Ventures

MAY 14, 2011

The 3Fs invest their own hard-earned money, usually under $50K. Incubators and Accelerators : Incubators and accelerators have to a large extent replaced the funding from friends and family. The incubators and accelerators are investing $15-$50K in a large number of early stage teams (the current YC class has 60+ teams !).

Preferred Stock 125

Preferred Stock Seed Stage Incubator Early Stage 125

dondodge.typepad.com

JANUARY 15, 2011

Community is more powerful than money or technology » August 11, 2007 How much equity for investors and employees? Should I take Angel or VC money? How much money should I raise? How much equity should I give up? How much equity should I grant to early employees?

Equity 40

Equity Employee Dilution Valuation 40

Scott Edward Walker

APRIL 9, 2012

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. ii) what happens if the maturity date is reached prior to the note’s conversion to equity? What is a Convertible Note?

Preferred Stock 87

Preferred Stock Finance Common Stock Liquidation Preference 87

www.paulgraham.com

APRIL 28, 2010

Till now, nearly all seed firms have been so-called "incubators,"so Y Combinator gets calledone too, though the only thing we have in common is that we investin the earliest phase. According to the National Association of Business Incubators, thereare about 800 incubators in the US. What is an incubator?

Technical Review 76

Technical Review Startup Software Review Angel Investor 76