K9 Ventures

MARCH 23, 2011

The convertible note was really intended as an instrument for a “bridge financing” – when an equity round was imminent, and likely to occur, but the company needed some money in between. In that case, it made good sense to have a debt instrument, where the note holder then converted into equity when the financing occurred.

Pre-Money Valuation 132

Pre-Money Valuation Valuation Equity Liquidation Preference 132

David Teten

AUGUST 21, 2019

Most founders who are raising capital look first to traditional equity VCs. Or should they look to one of the new wave of Revenue-Based Investors? Revenue-Based Investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. RBI investors usually don’t take equity.

Revenue 60

Revenue Liquidation Preference Equity Cofounder 60

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

Reid Hoffman

OCTOBER 5, 2020

One of the hottest topics in the technology and finance world right now is an old idea that has suddenly found new life, the special purpose acquisition company or “SPAC.” Most IPOs are managed by a handful of investment banks who run a roadshow to sell stock to risk-averse institutional investors.

Venture Capital 28

Venture Capital IPO Cofounder Institutional Investors 28

ithacaVC

APRIL 5, 2011

One rule of simple cap tables is to issue “normal” stock to founders (common stock only) and investors (typically preferred stock, but sometimes common stock to early friends and family). A real institutional investor wants to invest $XX,000 in his company. I hope the investor agrees.

Common Stock 45

Common Stock Stock Cap Table Preferred Stock 45

David Teten

DECEMBER 3, 2019

Tim Friedman, Founder, PE Stack , said, “If I could offer one piece of advice to today’s managers, it would be to take the time to understand the demands of the modern institutional LP. Excel and Google simply aren’t going to cut it if you expect to build a high quality institutional investor base.”. 3) Raise capital.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Hunter Walker

SEPTEMBER 29, 2022

As more growth and crossover investors came into the startup ecosystem they were often eager to put capital to work and happy to consolidate their positions with common or preferred shares from early employees, founders and previous investors. We’re aligned with the founders and the rest of the cap table until we aren’t.

Venture Capital 122

Venture Capital Cap Table LP Equity 122

abovethecrowd.com

AUGUST 23, 2020

The traditional way of going public is systematically broken and is robbing Silicon Valley founders, employees, and investors of billions of dollars each year. Talk to any management team from any IPO in the past three years, and you will find they had this exact conversation. Door #1: The Structurally Broken IPO Process.

IPO 118

IPO Silicon Valley Warrant Matching 118

Gust

OCTOBER 26, 2011

As we conclude our convertible note financing series, there are assorted terms commonly seen in term sheets and deal documents that are worth touching on briefly. The Note Purchase Agreement and Convertible Promissory Note are essential documents for any convertible note financing. See discussion of amendments below.)

Finance 79

Finance Term Sheet Covenant Accredited Investor 79

VC Adventure

MAY 21, 2014

FG Angels and AngelList will get their carry straight from the syndicate investors upon an exit. What this means for an AngelList company is – be completely ready for investors before giving FG Angels the green light to go live. 506(b) vs 506(c): These refer to two of the SEC rules that regulate “crowdfunding” financing.

Syndicate 93

Syndicate Syndication Technical Review Due Diligence 93

Austin Startup

AUGUST 1, 2017

TL;DR: In a market that has historically idolized huge, splashy financings and exits, an increasing number of entrepreneurs are realizing that everyone else’s definition of success — particularly among certain large VCs — isn’t necessarily aligned with their own. And large checks require very large exits to achieve good returns.

Liquidation Preference 48

Liquidation Preference Common Stock Valuation Silicon Valley 48

VC Adventure

MAY 21, 2014

FG Angels and AngelList will get their carry straight from the syndicate investors upon an exit. What this means for an AngelList company is – be completely ready for investors before giving FG Angels the green light to go live. 506(b) vs 506(c): These refer to two of the SEC rules that regulate “crowdfunding” financing.

Syndicate 48

Syndicate Syndication Technical Review Due Diligence 48

Rob Go

FEBRUARY 24, 2014

Apart from the founders and employees of the company, Sequoia Capital was the big winner, and that was recognized by everyone. The most impressive fact is that Sequoia is the only institutional investor in the company. 4) create an auction for the financing and drive up the price even higher, etc.

Cap Table 78

Cap Table Valuation Finance Institutional Investors 78

Austin Startup

MAY 17, 2017

They’ll often ask for different variants of ‘information rights’ — which can include delivery of regular financials, and notification of major transactions (like financings). This means the investor has the right to observe everything that happens at the Board level, which includes hiring people, equity grants, approving major deals, etc.

Seed Stage 48

Seed Stage Startup Cap Table Angel Investor 48

Austin Startup

APRIL 1, 2017

out of state VCs Don’t rush a term sheet In assessing financing terms and interacting with their lead investors, most founders instinctively focus on two core things: economics and control. And some founders are quite good at it too. Do not take that selection lightly. And, broadly speaking, that is correct.

Term Sheet 48

Term Sheet Institutional Investors Technical Review Lead Investor 48

Up and Running

DECEMBER 9, 2014

Bates: Good morning and welcome to our CEO panel, “How to Fine-Tune Your Small Business Finances From Funding to Growth” which I think is the direction that we would all like to be going. I’m here with some really phenomenal CEOs who are going to talk to us today about small business finances from funding to growth.

Small Business 95

Small Business Finance Forecast Metrics 95