Startup Professionals Musings

MARCH 9, 2018

In the interim, there is no market for the shares, and no dividends or interest. Many use a convertible loan note that may be converted into equity upon the closing of the first formal angel or VC round of financing, with a more realistic valuation. Make sure the money is discretionary.

Cram Down 148

Cram Down Angel Investor Equity Dividend 148

Startup Professionals Musings

OCTOBER 10, 2014

In the interim, there is no market for the shares, and no dividends or interest. Many use a convertible loan note that may be converted into equity upon the closing of the first formal Angel or VC round of financing, with a more realistic valuation. Make sure the money is discretionary.

Founder 254

Founder Cram Down Angel Investor Equity 254

Berkonomics

JUNE 15, 2017

To protect against such an event, almost every professional investor includes a clause in the investment documents which allow the investor to “put” the stock back to the company after five years, requiring the company to pay back the investment plus dividends accrued during the term of the investment.

Liquidity Event 97

Liquidity Event Initial Public Offering Dividend Valuation 97

Startup Professionals Musings

APRIL 17, 2013

In the interim, there is no market for the shares, and no dividends or interest. Many use a convertible loan note that may be converted into equity upon the closing of the first formal Angel or VC round of financing, with a more realistic valuation. Make sure the money is discretionary.

Cram Down 230

Cram Down Angel Investor Equity Dividend 230

Startup Professionals Musings

NOVEMBER 11, 2015

In the interim, there is no market for the shares, and no dividends or interest. Many use a convertible loan note that may be converted into equity upon the closing of the first formal Angel or VC round of financing, with a more realistic valuation. Make sure the money is discretionary.

Cram Down 120

Cram Down Angel Investor Equity Dividend 120

Startup Company Lawyer

MARCH 12, 2009

Any company that raises venture financing will need to be a C corp in order to issue preferred stock. If founders want the benefit of flow through tax treatment with respect to losses prior to an outside financing, an S corp election may make sense as long as there are no entity or non-U.S. citizen/resident stockholders.

LLC 61

LLC Stock Options Preferred Stock Stock 61

Both Sides of the Table

APRIL 14, 2010

It will usually be higher because the liquidation preference has a dividend so if the deal is long in the tooth assume that the liquidation preference might be $20-22 million. Existing investors won’t want to have these conversations. Let’s say the company had raised $15 million. But pass they will. Brain damage.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Pre-Money Valuation 289

Berkonomics

JANUARY 27, 2010

To protect against such an event, almost every professional investor includes a clause in the investment documents which allow the investor to “put” the stock back to the company after five years, requiring the company to pay back the investment plus dividends accrued during the term of the investment.

Liquidity Event 67

Liquidity Event Initial Public Offering Dividend Valuation 67

Startup Lessons Learned

MAY 25, 2020

The stories he told me during our conversation, somber as they are, show the truth of that belief. You can listen to our conversation on Apple podcasts , Google podcasts , or wherever you like to download. Here's my conversation with Carl Liebert. He shared his reflections on why these approaches work. It's member-owned.

Technical Review 148

Technical Review Balance Sheet Texas Austin 148

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

www.virtuosimedia.com

MARCH 8, 2012

Good financial situation - Personal finances also affect relationships and they can do a lot of damage absent a relationship as well. Briefly, here are some contract points you may want to consider for incorporation: The division of share equity and dividend payout. Titles and responsibilities. Salaries/Bonuses. Exit strategies.

Technical Cofounder 41

Technical Cofounder Cofounder Technical Review NDA 41

Seeing Both Sides

JULY 15, 2009

VCs have an unfair advantage when it comes to financings. A typical start-up company will do 2-4 venture capital financings before a successful exit (or, conversely, an ignomious ending). In contrast, the typical venture capitalist, either individually or across their partnership, will do 5-10 financings in any given year.

Pre-Money Valuation 49

Pre-Money Valuation Option Pool Stock Options Post-Money Valuation 49

Mike Michalowicz

FEBRUARY 18, 2015

There is a conversation going on about your business. You have the ability to get involved in that conversation. Wielding your quick response time and ability to act on a moment’s notice will pay dividends that big business can’t hope to match. It’s a necessity.

Small Business 60

Small Business Technical Review Agile Dividend 60

Scott Edward Walker

JUNE 9, 2011

Conversion Rights What Are Conversion Rights? Indeed, preferred stock, as the name suggests, is preferable to (and more valuable than) common stock because it grants certain key rights to the holders, one of which is a conversion right. There are two types of conversion rights: optional and mandatory.

Term Sheet 60

Term Sheet Conversion Rights Venture Capital Liquidation Preference 60

Occam's Razor

JULY 26, 2010

Don't focus just on the quote (the part the site does), include the final conversion to a paying customer (even if that data is offline). Here's what you are focusing on (and it is good): All my experience in these things suggests that it is dangerous to think that the Conversions column is representative of the final outcome.

Web 96

Web Metrics Analytics eCommerce 96

Up and Running

APRIL 29, 2014

But basically, your personal finances and business finances are little more intermixed when it’s pass-through entity. A lot of the times I hear small businesses say, “Oh, those are awkward conversations, and we don’t want to talk about the negatives.” This would be dividend. This would be interest.

.Net 85

.Net Capital Gains Distribution Puerto Rico 85

Up and Running

MARCH 11, 2015

This is the part that people hate the most, unless you’re a finance geek. Content marketing, and under content marketing we’re tracking uniques, time on site, bounce rates, open rates, click-through rates, conversion rates, these are the things that if we don’t know what these things are, we could end up in trouble.

Technical Review 60

Technical Review Software Review Due Diligence Exit Strategy 60

Startup Lessons Learned

JANUARY 28, 2009

I thought we were having a successful conversation. Compounding is not a process that most people find intuitive, and thats as true in engineering as it is in finance, so it requires a lot of encouragement in the early days to stay the course. Back to my conversation with the company I met recently. Share what you learn.

San Francisco 79

San Francisco Lean Continuous Deployment DC 79