YoungUpstarts

OCTOBER 28, 2015

Investors typically negotiate from a term sheet, which if not handled properly can create problems that can hurt or kill the startup’s chances when they do their Series A round of funding. They also need to decide whether to structure terms as an equity deal or a convertible security deal. Convertible Securities.

Convertible Security 100

Convertible Security IP Technical Review Software Review 100

The Startup Lawyer

AUGUST 24, 2010

Just like the preferred equity financing process, the convertible debt financing process can start with a term sheet, rather than a full set of financing documents. Convertibility : What amount of equity financing is required to trigger automatic conversion of the convertible notes to equity (i.e.,

Term Sheet 62

Term Sheet Pre-Money Valuation Liquidity Event Warrant 62

Both Sides of the Table

MAY 13, 2018

If an investor isn’t engaging then they’re not suddenly going to get a term sheet. If we feel a mutual connection then my goal is to make your life easier by offering you a term sheet before you’re even raising and I’ll spend the time and effort trying to prove that it isn’t worth running a process.

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Term Sheet Due Diligence Campaign Sales 332

Austin Startup

FEBRUARY 11, 2020

We’ve had the pleasure of working with DivInc in the past on Diversity, Equity, and Inclusion Challenges in Austin , Houston , and Dallas. Year-round Diversity, Equity, and Inclusion Summits are just one example of how we’re making Capital Factory more accessible.

Houston 84

Houston Dallas Term Sheet Texas 84

Austin Startup

FEBRUARY 11, 2020

We’ve had the pleasure of working with DivInc in the past on Diversity, Equity, and Inclusion Challenges in Austin , Houston , and Dallas. Year-round Diversity, Equity, and Inclusion Summits are just one example of how we’re making Capital Factory more accessible.

Houston 84

Houston Dallas Term Sheet Texas 84

Austin Startup

JULY 22, 2021

Pitch for a Fast Track into Capital Factory with a $100,000 Investment was originally published in Austin Startups on Medium, where people are continuing the conversation by highlighting and responding to this story. Female Founders!

San Antonio 107

San Antonio Dallas Houston Founder 107

Austin Startup

DECEMBER 15, 2020

Annual Diversity, Equity and Inclusion Summits focused on key under-represented groups are one example of how we try to do that and we’re starting to see some results. We’re dedicated to increasing diversity in the tech community and making our community an inclusive and welcoming environment for people of all backgrounds and identities.

Founder 98

Founder Dallas Houston Term Sheet 98

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

www.seriesseed.com

DECEMBER 9, 2012

.  That’s because there are not that many issues to negotiate in a simple equity financing.   Based on the comments received, both on the blog and in the many deals in which these documents have been used, I am convinced that the terms of a simple set of equity documents are really not an issue. 

Term Sheet 40

Term Sheet Ratchet Dilution Equity 40

Gust

SEPTEMBER 29, 2011

For a traditional VC financing round structured as a sale of preferred stock, the best resources I can recommend are the Term Sheet Series by Brad Feld and Jason Mendelson and Startup Company Lawyer by Yokum Taku. I’ve posted a sample convertible note term sheet on my website.) There are two principal reasons.

Finance 178

Finance Term Sheet Preferred Stock Bridge Financing 178

Scott Edward Walker

JUNE 9, 2019

Over the past few weeks, two of my clients have received financing term sheets in which the investors requested super pro rata rights. For example, an investor that agrees to purchase 20% of the equity in a Series A round requests the right to purchase up to 50% of the subsequent Series B round. Introduction. Pro Rata Rights.

Preferred Stock 56

Preferred Stock Term Sheet Dilution Stock 56

David Teten

SEPTEMBER 2, 2017

It’s hard enough to get a job at a venture capital or private equity firm; it’s even more complex to join as a Partner. Also see Preqin’s Key Due Diligence Considerations for Private Equity Investors. . VC and private equity are very illiquid on both the investing and the personnel side. So assessing fit is critical.

Private Equity 60

Private Equity Venture Capital Equity Partner 60

This is going to be BIG.

SEPTEMBER 1, 2010

We negotiated fair deals—all equity—in a timely manner. Sure, there will always be another investor who hears that you’ve got a term sheet that is willing to one-up it on price, but it’s really hard to get that first one in the pool. In all four deals that I’ve worked on, we were the first ones to the table. Not at all.

Equity 104

Equity Term Sheet Seed Stage Angel Investor 104

www.seriesseed.com

DECEMBER 9, 2012

Series Seed Term Sheet (v 2.0). Series Seed Term Sheet. You can follow this conversation by subscribing to the comment feed for this post. We went with equity because ivestors would prefer to get equity for the following reasons: 1. Long term capital gains possible for early exit.

Finance 40

Finance Term Sheet Vesting LLC 40

Feld Thoughts

OCTOBER 15, 2013

Take a small amount of equity (usually ~6%) and overall have terms that are favorable to entrepreneurs. To become a member, each accelerator must meet the following strict criteria: Operate a 3-6 month long program. Provide some sort of seed capital to their founders. Take no less than 5 and no more than 12 companies at a time.

Global 179

Global Networking United States Seed Money 179

Both Sides of the Table

JANUARY 21, 2010

You never got around to agreeing exact equity splits but you had many conversations about it. They’ll invite you out to events in which you’ll meet their other clients, you can get to know them socially and hopefully develop a real mentorship relationship where every conversation is not on the clock.

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Southern California Silicon Valley IP Stock Options 318

Both Sides of the Table

JUNE 5, 2015

.” Today I want to talk about how a VC thinks about equity pricing on your round and particularly if you’re coming off of a convertible note. Then all of sudden when you get a strong lead term sheet everybody wants to chuck in “just $250k” and before you know it the round is $3.5 For me it’s clear.

Pre-Money Valuation 150

Pre-Money Valuation Option Pool Post-Money Valuation Dilution 150

Gust

OCTOBER 12, 2011

Last week , we took the plunge and began dissecting an example term sheet for a convertible debt financing round piece by piece. I’ll continue with more specific terms and wrap up next week with some thoughts about recent changes and trends for the future. First, a word about the maturity date.

Finance 107

Finance Term Sheet Pre-Money Valuation Early Stage 107

Gust

OCTOBER 21, 2011

For convertible notes, the only liquidity event we need be concerned with is an acquisition of the startup in the near future, before the maturity date; otherwise, the notes will convert to equity of one kind or another, and the eventual sale of that equity (in a public offering, acquisition, or private sale) is a different subject for another day.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

Both Sides of the Table

SEPTEMBER 5, 2012

This time by the efforts of Adeo Ressi to introduce a new kind of structure called “ convertible equity.” 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.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

Gust

OCTOBER 5, 2011

In this installment, I’ll dig into the “how” by dissecting an example term sheet based on a real deal. For those playing at home, you may find it helpful to download the sample term sheet from my firm’s website and follow along with the commentary. This paragraph is the heart of the whole deal.

Finance 79

Finance Preferred Stock Term Sheet Early Stage 79

Gust

SEPTEMBER 5, 2012

Convertible equity? I won’t rehash all of the customary convertible note financing deal terms and points of negotiation here. (For For a comprehensive tutorial with sample term sheet, see my prior series here at Gust.) How to finance a new seed-stage startup? Convertible debt?

Finance 134

Finance Convertible Security Equity Seed Stage 134

Business Plan Blog

NOVEMBER 13, 2013

Convertible Debt” is a loan, which is automatically converted to equity at maturity or upon the closing of a round of financing. Various terms such as price cap, discount, conversion to equity, etc., The terms of the note are 10% discount and an automatic conversion after a financing of $1,000,000.

Finance 93

Finance Accredited Investor Angel Investor Seed Capital 93

This is going to be BIG.

OCTOBER 16, 2017

For example, I've been putting in a spending clause in my term sheets lately, where above a certain one-time spend triggers a conversation. Some might see that as a pain because other investors won't ask for that--but it's already facilitated a lot of great conversations.

Term Sheet 71

Term Sheet Salary Founder Equity 71

Startup Lessons Learned

JULY 26, 2011

And reading a term sheet has all the entertainment value of watching dried paint get even drier. For example, the right way to think about a term sheet is as a negotiation over just two things: economics and control. Everything in a term sheet is negotiable - if and only if you already have sufficient leverage. (Do

Antidilution 148

Antidilution Term Sheet Silicon Valley Widget 148

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. These are all real conversations. Objectively.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

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

David Teten

JULY 20, 2011

Discuss alternative arrangements such as caps, deferral until financing and equity as a form of payment. You will save a lot of time and money by engaging an experienced venture attorney who can educate you on what you can push back on in a term sheet and what is a non-starter with the VC. by Ed Reitler.

Intellectual Property 128

Intellectual Property Entrepreneur Term Sheet Venture Capital 128

finance.fortune.cnn.com

AUGUST 21, 2012

Term Sheet. Term Sheet The latest on private equity, M&A, deals and movements — from Wall Street to Silicon Valley. Now, as for those private equity funds: Blackstone Communications Partners I (2000): 129% (97%). Providence Equity Partners IV (2000): 198% (186%). Join the Conversation.

Naming 49

Naming Term Sheet Private Equity Equity 49

VC Cafe

OCTOBER 27, 2011

They will be there long term, have significant equity and help making strategic decisions. Having multiple term sheets makes a difference. Don’t confuse a pitch with a friendly conversation. If you get multiple term sheets, don’t engage in a bidding war.

Venture Capital 109

Venture Capital Term Sheet Angel Investor Due Diligence 109

K9 Ventures

OCTOBER 27, 2016

Without founder vesting, if an investor were to invest in a company, a founder could pretty much walk away the very next day with all of their equity intact thereby decimating the company and its prospects. Hat tip to Howard Hartenbaum at August Capital , as the inspiration for this post came from a conversation over breakfast with Howard.

Founder Vesting 48

Founder Vesting Vesting Founder Term Sheet 48

David Teten

DECEMBER 3, 2019

Private equity and venture capital investors are copying our sisters in the hedge fund world: we’re trying to automate more of our job. . In the private equity universe, most Partners have primary training as deal-makers, not as managers. (To see the video above, please click the image, and then click on the Play button.).

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Gust

DECEMBER 27, 2012

You should know every metric regarding customer acquisition, conversion and retention. Keep in mind that any cash you put in will remain in the company as Founders’ Equity, and will only come back to you on a successful exit in which your investors make money. [3a. Your goal in all this is to try to find a lead investor.

Software Review 164

Software Review Term Sheet Technical Review Angel Investor 164

Steve Blank

APRIL 1, 2020

Some VC’s are walking away from signed term sheets. ” Board members gave her a wakeup call: there was either going to be a much more realistic assessment tomorrow based on her first-hand customer conversations, or a new CEO. Award equity to employees equal to the value of their reduced salaries.

South Korea 333

South Korea Salary Business Model China 333

Growthink Blog

SEPTEMBER 9, 2011

A venture capital firm is a financial institution that focuses on providing capital, in the form of equity, to companies who offer them the prospects of significant growth. The term "VC" or "VCs" applies to both venture capital firms and venture capitalists.

Venture Capital 114

Venture Capital Liquidity Event Initial Public Offering Term Sheet 114

Agile VC

FEBRUARY 28, 2012

If you and all the people around your startup (co-founders, advisors, existing investors) feel strongly that the company A) could benefit from additional equity capital at this time and B) you’ve accomplished value accretive milestones since your last round of funding, then it might make sense to talk with potential new investors.

Early Stage 100

Early Stage Syndicate Syndication Silicon Valley 100

ReadWriteStart

MAY 8, 2012

Now, we’re focusing early conversations intently on our strategy for winning and our progress thus far, which gives investors a clearer picture of who we are and where we’re headed.” The more we examined the terms of the investment, the more we found things that seemed ‘off’ about their offer.

Cofounder 140

Cofounder Startup San Francisco Silicon Valley 140