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What is convertible equity (or a convertible security)?

Startup Company Lawyer

Quick answer: convertible equity (or a convertible security) is convertible debt without the repayment feature at maturity or interest. Over the past few years, convertible debt has emerged as a quick and inexpensive method for startup companies to raise money from angel investors and early stage venture funds. Background. The problem.

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Startup Funding – A Comprehensive Guide for Entrepreneurs

ReadWriteStart

To secure your funding, you must establish the feasibility of your idea through proper planning and implementation. The shares given out can either be common stocks or preferred stocks. ? Debt investment. Many myths surround the subject of startup funding. Pre-Requisites of Funding. Equity investors. Debt investors.

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What if you and your investors don’t agree on an exit?

Berkonomics

There are clauses in preferred stock investment agreements allowing the investor in many cases to “put” the shares back to you at the purchase price plus dividends or more after a period, usually five years, if no effort is made to find a buyer or begin the IPO process. The advantage of creating an evergreen company.

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WHAT ARE SUPER PRO RATA RIGHTS?

Scott Edward Walker

First let’s discuss pro rata rights (sometimes referred to as “participation” or “preemptive” or “right of first offer/refusal” rights) – which investors will typically request in connection with any venture capital financing.

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Three Startup Financing Myths You Should Avoid

YoungUpstarts

Gurinder Sangha, a securities lawyer who started Intelligize (sold to Lexis-Nexis), put it best when he said that you want to go after investors that are “in your tribe.”. Sangha was a graduate of University of Pennsylvania and his first venture capital investor turned out to be an alumni. Who is in your tribe? In the U.S.,

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How do the sample Series Seed financing documents differ from typical Series A financing documents?

Startup Company Lawyer

If you don’t, please educate yourself on this site, Venture Hacks and the term sheet series by Brad Feld/Jason Mendelson, among other places. If you really want to understand the nuances in venture capital financing documents, please review the NVCA model venture capital financing documents. . under $500K).

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Everything You Ever Wanted to Know About Convertible Note Seed Financings (But Were Afraid To Ask) – Part 1

Scott Edward Walker

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) why are convertible notes issued instead of shares of common or preferred stock?