Startup Professionals Musings
APRIL 19, 2010
Later, when your venture is trying to close on financing, or even going public, that forgotten partner surfaces, demanding equity. This problem can be avoided by incorporating immediately after early discussions, and issuing shares to the founders, with normal vesting and other participation rules.
Scott Edward Walker
APRIL 9, 2012
Part 3 will cover certain special issues, such as (i) what happens if the startup is acquired prior to the note’s conversion to equity? (ii) ii) what happens if the maturity date is reached prior to the note’s conversion to equity? A convertible note is short-term debt that converts into equity. price the round).
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Scott Edward Walker
MAY 15, 2012
The second approach is the most investor-friendly, and it is a provision that permits the noteholders to convert the notes into equity (or otherwise grants them a certain percentage of the sale proceeds), based on an agreed-upon valuation of the startup. Yes, a convertible note is a “security” under federal and state securities laws.
Up and Running
JULY 20, 2015
If your business plays in the stock market at all, you’ll also have to indicate when you buy or sell securities here as well. This section of the cash flow statement includes information about taking out loans to buy property or equipment; issuing stock to employees, the public, or other stakeholders; paying out dividends, and so on.
The Startup Lawyer
JANUARY 26, 2010
The answer to this question depends on how well your startup secures its intellectual property. Each founder is issued shares in the startup in exchange for the founder’s intellectual property (and usually a small amount cash). Lost Founders. But if your startup becomes a wild success, the developer will.
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