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One Simple Paragraph Every Entrepreneur Should Add to Their Convertible Notes

Both Sides of the Table

MAY 30, 2015

I’m so tired of seeing young entrepreneurs get screwed by their angel investors on convertible notes and I know I can’t convince you not to do it so I’d like to offer one simple bit of advice to help you avoid getting screwed (at least on one part of your note). If you raise at a lower price they will own more than 9%.

Liquidation Preference 150
Liquidation Preference Ratchet Angel Investor Entrepreneur 150
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The Truth About Convertible Debt at Startups and The Hidden Terms You Didn’t Understand

Both Sides of the Table

SEPTEMBER 5, 2012

My initial reaction to Adeo when we spoke was that while it may have solved some issues (debt versus equity) it didn’t solve the ones that I’ve been warning entrepreneurs about most loudly. A standard entrepreneur retort I heard back then (2008-09) was “I don’t know what my company is worth now.

Ratchet 354
Ratchet Liquidation Preference Equity Stock 354
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