The Startup Lawyer

JUNE 22, 2010

compensate the angel for the early risk), the convertible promissory note will have an automatic conversion discount feature by which the angel investor will exchange the convertible debt for shares of the Series A Preferred Stock at a discount to the price per share paid by the venture capital fund at a Qualified Financing. (For

Pre-Money Valuation 82

Pre-Money Valuation Angel Investor Preferred Stock Valuation 82

thestartuplawyer.com

FEBRUARY 24, 2010

He obviously never launched a startup and got shafted by a co-founder. He obviously never launched a startup and got shafted by a co-founder. He obviously never launched a startup and got shafted by a co-founder. You can start by examining every aspect of the co-founder relationship.

Cofounder 40

Cofounder Founder Preferred Stock Startup 40

Gust

NOVEMBER 4, 2011

Entrepreneurs and investors who have spent any time dealing with convertible debt seed financing transactions are likely to have encountered the subject of valuation caps. with Intermix owning 53%, MySpace Ventures (an entity owned by the six founders) holding 19.9%, Redpoint taking 25%, and the remainder going to employee stock options. (At

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

YoungUpstarts

SEPTEMBER 11, 2013

By Alan Lobock, co-founder, Worthworm. Sometimes the list of challenges may feel never ending – from writing the business plan to finding the right partner – but one of the single most important challenges entrepreneurs face is calculating a realistic, defensible pre-money valuation. . commercial aircraft.

Pre-Money Valuation 133

Pre-Money Valuation Valuation Angel Investor Cofounder 133

Both Sides of the Table

APRIL 14, 2010

Liquidation preference is the amount of money that an investor gets paid before the common stock (e.g. management, founders, angel investors) get any money. Talk openly about valuation and what they’ll accept so you know what you’re dealing with. But pass they will. Brain damage. Reputation.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Dividend 289

Scott Edward Walker

APRIL 9, 2012

As a result, the pendulum has swung dramatically in the founders’ favor, and the issuance of convertible notes for seed financing has never been more prolific. 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) What is a Convertible Note?

Preferred Stock 87

Preferred Stock Finance Common Stock Liquidation Preference 87

Both Sides of the Table

FEBRUARY 25, 2010

million at a $15 million pre-money valuation. We had people hearing through the grapevine that we were about to raise money and new investors started calling us to get in on the deal. My co-founder and other management team members wanted us to hold off and see whether we could get the deal done at a higher price.

Technical Review 301

Technical Review Term Sheet Due Diligence Venture Capital 301

venturehacks.com

OCTOBER 21, 2010

If you don’t keep your eyes on the option pool while you’re negotiating valuation, your investors will have you playing (and losing) a game that we like to call: Option Pool Shuffle You have successfully negotiated a $2M investment on a $8M pre-money valuation by pitting the famous Blue Shirt Capital against Herd Mentality Management.

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68