Gust

OCTOBER 17, 2011

Remember a term sheet agreement is not a deal until the check clears. However, there is no set pattern of terms an entrepreneur might be able to anticipate from either. Your best strategy is to bring your own term sheet to the negotiation as a starting point. Liquidation preference.

Term Sheet 158

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 158

Startup Company Lawyer

MARCH 14, 2010

After the recent announcement of the Series Seed Financing documents by Marc Andreesen, Brad Feld points out that there are now four sets of “open source&# equity seed financing documents: TechStars Model Seed Funding Documents (by Cooley). Y Combinator Series AA Equity Financing Documents (by WSGR). under $500K).

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

Both Sides of the Table

SEPTEMBER 18, 2014

At an accelerator … Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Both Sides of the Table

SEPTEMBER 8, 2012

It has both a “full rachet” and “multiple liquidation preferences.” But Paul Graham really did have a point in his “ high resolution fundraising ” post – that there is a problem – particularly in angel financing – with herding cats. ” I wrote about it here.

Pre-Money Valuation 294

Pre-Money Valuation Finance Liquidation Preference Warrant 294

ReadWriteStart

SEPTEMBER 2, 2011

While certainly not every business needs to raise venture financing, it is the path for many high-growth technology startups. Tip 4: Really Understand Key Terms. Once you get the term sheet make sure you know how to read it. Once you have a term sheet you are happy with, don't over negotiate.

Cap Table 125

Cap Table Term Sheet Liquidation Preference Technical Review 125

Scott Edward Walker

JUNE 9, 2011

Introduction This post originally appeared as part of the “ Ask the Attorney ” column I am writing for VentureBeat ; it is another installment of my ongoing series regarding venture capital term sheets. These rights are related to the investor’s liquidation preference. What Are Mandatory Conversion Rights?

Term Sheet 60

Term Sheet Conversion Rights Venture Capital Liquidation Preference 60

Gust

SEPTEMBER 17, 2014

Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago. Objectively. Either that or they’re dumb.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

www.readwriteweb.com

DECEMBER 29, 2011

While certainly not every business needs to raise venture financing, it is the path for many high-growth technology startups. Tip 4: Really Understand Key Terms. Once you get the term sheet make sure you know how to read it. Once you have a term sheet you are happy with, don't over negotiate.

Cap Table 47

Cap Table Term Sheet Liquidation Preference Technical Review 47

Austin Startup

APRIL 1, 2017

out of state VCs Don’t rush a term sheet In assessing financing terms and interacting with their lead investors, most founders instinctively focus on two core things: economics and control. Do not take that selection lightly. Background Reading: How to avoid “captive” company counsel Local v.

Term Sheet 48

Term Sheet Institutional Investors Technical Review Lead Investor 48

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. By the first quarter of 2016, the late-stage financing market had changed materially. Investors were becoming nervous and were no longer willing to underwrite new Unicorn-level financings at the drop of a hat. The Sharks Arrive With Dirty Term Sheets.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Startup Company Lawyer

JANUARY 9, 2011

Convertible debt with a price cap seems to be the preferred structure for early-stage financings. Over the last 12 months, I’ve noticed a trend where early-stage startup companies raise seed financings of between $250K and $1M using a convertible note with a price cap. Is a priced Series A financing a valid alternative?

Liquidation Preference 57

Liquidation Preference Finance Preferred Stock Common Stock 57

Professor VC

APRIL 1, 2010

One comment made by Jason was that angels tend to be less sensitive than VCs on valuation and can potentially make it difficult to get a venture financing done at acceptable valuation. There has been a lot of discussion and publishing of standard term sheets, including Y Combinator, TechStars and SeriesSeed. Steve Bennet.

Term Sheet 32

Term Sheet Angel Investor San Jose Venture Capital 32

Feld Thoughts

JUNE 2, 2015

Or, if you just want the paragraph, it’s: “If this note converts at a price higher than the cap that you have been given you agree that in the conversion of the note into equity you agree to allow your stock to be converted such that you will receive no more than a 1x non-participating liquidation preference plus any agreed interest.”.

Liquidation Preference 70

Liquidation Preference Cap Table Angel Investor Post-Money Valuation 70

Scott Edward Walker

AUGUST 31, 2011

Thanks, Scott Question We’re a startup based in Palo Alto, and we just received a Series A term sheet for a $725,000 investment. Which financing sources should they consider? At what valuation and on what terms? The investor is kind of insisting that we use his lawyer at a big Valley firm to represent us.

Silicon Valley 45

Silicon Valley Term Sheet Liquidation Preference Redemption 45

The Startup Lawyer

JUNE 9, 2010

A startup’s Series A financing shouldn’t be a large liquidity event or salary payday for the startup’s founders. The term sheet was pretty much a done deal, when the startup’s CEO demanded a salary of $25,000. Not all startup founders understand this tenet. Case Study. Case Study.

Salary 99

Salary Term Sheet Liquidation Preference Liquidity Event 99

Feld Thoughts

JULY 14, 2015

Assuming equity is raised at or above that cap, the total dilution, before the new money, is 16.6% (equivalent to an equity financing of $1m at a $6m post money valuation. The term sheet converts all the convertible debt into a post-money valuation of $100, essentially making the convertible debt worthless.

Recapitalization 70

Recapitalization Pre-Money Valuation Post-Money Valuation Angel Investor 70

Professor VC

JULY 25, 2013

In investment parlance, it strictly means that new classes of stock have equal rights with prior classes in terms of liquidation preference, voting rights, etc. An entrepreneur received two Series A term sheets, one lead by an international investor and the other from SH. Thank you sir, may I have another!"

Term Sheet 46

Term Sheet Silicon Valley Syndicate Syndication 46

www.mattbartus.com

DECEMBER 9, 2012

Let’s say you receive a term sheet for a $1 million investment at a $3 million fully diluted pre-money valuation, and you’re kind of disappointed. 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.

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40

SoCal CTO

JULY 13, 2010

How-to learn about angel/vc term sheets - Gabriel Weinberg , June 28, 2010 I think every startup entrepreneur (and angel investor) should have a good understanding of financing term sheets. liquidation preference. liquidation preference. Yes, even bootstrappers. Yes, even bootstrappers.

Cofounder 175

Cofounder Technical Cofounder Term Sheet Startup 175

Scott Edward Walker

JULY 27, 2011

Introduction For the past few months, I’ve been discussing the rights of VC investors in connection with preferred stock financings, including the following: liquidation preferences anti-dilution provisions dividends Board control protective provisions drag-along provisions pay-to-play and pull-up provisions conversion rights redemption rights All (..)

Delaware 49

Delaware Liquidation Preference Redemption Los Angeles 49

Both Sides of the Table

FEBRUARY 14, 2016

When I was an entrepreneur there was no public information about how term sheets worked or how investors thought. Why Financing in Falling Markets is So Damn Difficult. Or down rounds might favor earlier-stage investors because the liquidation preferences of later stage investors get reduced. And so it goes.

Valuation 150

Valuation Down Round Startup Later Stage 150

Life Beyond Code

SEPTEMBER 27, 2011

Through this journey, we have raised the visibility of fundamental issues like the causes of exorbitantly high infant entrepreneur mortality, and alerted the entrepreneur community with a simple observation: Entrepreneurship = (Customer + Revenue + Profits); Financing is Optional. The rest of the services are for paying members only.

Programming 116

Programming Silicon Valley Bootstrapping Technical Review 116