Both Sides of the Table

OCTOBER 19, 2014

and had several phone conversations after that. By September 26th we had submitted a term sheet which was signed on October 4th and financing was closed in less than 30 days. We met in August (so much for VCs taking the Summer off!)

Technical Review 373

Technical Review North America Los Angeles Cofounder 373

www.seriesseed.com

DECEMBER 9, 2012

Series Seed Financing Documents Blog. Series Seed Financing Documents. Series Seed Term Sheet (v 2.0). Series Seed Term Sheet. Listed below are links to weblogs that reference Series Seed Financing Documents : 1 Reblog. SeriesSeed.com. Blog Archives.   Series Seed COI (v 2.0).

Finance 40

Finance Term Sheet Vesting LLC 40

View from Seed

FEBRUARY 23, 2021

The classic scenario is when a VC has a signed term sheet to lead a round, but has left room open for another meaningful investor. In other words, by the time the term sheet is signed, everyone else in the syndicate is already known and have been talking to the founder already.

Syndicate 207

Syndicate Syndication Term Sheet Early Stage 207

View from Seed

FEBRUARY 12, 2020

If you have a term sheet in hand or know for a fact that you are about to get one, you can be pretty transparent and say that you are late in the process and are looking to make a decision by X date. If you don’t have a term sheet, my general approach is to communicate that you are early in the process.

Term Sheet 364

Term Sheet Burn Rate Founder Partner 364

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. Closing : Is there a specific date that the convertible debt financing will close, or will there be an open round of seed investment ?

Term Sheet 62

Term Sheet Liquidity Event Pre-Money Valuation Warrant 62

David Teten

JANUARY 19, 2021

Yes, via conversion rights at a valuation cap. Yes, via conversion rights at a valuation cap. As a result, unfounded hockey-stick graphs and unicorn promises give way to financial fluency, realistic expectations, frank conversations about what a business can credibly achieve, and transparency. . Flexible VC: Compensation-based.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

YoungUpstarts

OCTOBER 28, 2015

This article highlights their advice on issues ranging from financing to patent trolls: While startups may believe lawyers are too costly, working with one early on avoids potentially serious problems later. ” The Cost of Financing. In a Series A financing, companies must pay the investors’ lawyers as well as their own.

Convertible Security 100

Convertible Security IP Technical Review Software Review 100

Gust

SEPTEMBER 29, 2011

It should therefore come as no surprise that an asymmetry of information exists, mostly gleaned from experience, between founders and investors in a venture financing deal. A term sheet for a convertible note deal may run two or three pages, versus 8-10 pages for a typical Series A Preferred Stock financing.

Finance 178

Finance Term Sheet Preferred Stock Bridge Financing 178

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

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

Both Sides of the Table

MAY 21, 2018

He was in a later-stage financing round and was talking with many investors. I told him, “I know we don’t yet have a term sheet so you feel you need to listen to everybody’s request. But imagine you were expecting two term sheets imminently. How would you act then?

Term Sheet 217

Term Sheet Later Stage Demand Email 217

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. Plan accordingly.

Term Sheet 332

Term Sheet Due Diligence Campaign Sales 332

Gust

OCTOBER 21, 2011

Readers joining this series in progress may find it helpful to download the sample term sheet from my firm’s website and review the earlier posts covering the basics. In Parts II and III, we looked at commonly used mandatory and voluntary conversion language in convertible notes. Most would agree this is not a fair outcome.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

Business Plan Blog

NOVEMBER 13, 2013

The first milestone in a new startup’s financing is called ‘Seed Capital’ which refers to the initial investment raised by the founders from their friends and family, or commonly referred to as FFF (Friends, Family and Founders), who mostly use their personal assets. *The Convertible Debt Financing. Raising Seed Capital.

Finance 93

Finance Accredited Investor Angel Investor Seed Capital 93

Gust

OCTOBER 5, 2011

Last week , we gave some attention to the “why” behind convertible note financing for early stage startups. In this installment, I’ll dig into the “how” by dissecting an example term sheet based on a real deal. As with so many subjects in law and finance, mastering the jargon is half the battle.

Finance 79

Finance Preferred Stock Term Sheet Early Stage 79

Gust

SEPTEMBER 5, 2012

How to finance a new seed-stage startup? ” Ressi in particular seems to be passionate about removing the “debt” component from convertible debt seed financing transactions. .” I won’t rehash all of the customary convertible note financing deal terms and points of negotiation here. (For

Finance 134

Finance Convertible Security Equity Seed Stage 134

Startup Company Lawyer

AUGUST 31, 2012

One major concern about convertible debt is that it eventually needs to be repaid if another round of financing doesn’t occur. ” If the company didn’t raise a round of financing, the convertible debt would convert into the last round of financing (i.e. Form of Convertible Security Term Sheet.

Convertible Security 73

Convertible Security Equity Security Preferred Stock 73

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. Simply put, pro rata rights permit the investor to maintain its percentage ownership in subsequent financing rounds. Introduction. Pro Rata Rights.

Preferred Stock 56

Preferred Stock Term Sheet Dilution Stock 56

www.seriesseed.com

DECEMBER 9, 2012

Series Seed Financing Documents Blog.   That’s because there are not that many issues to negotiate in a simple equity financing. Redline - Series Seed Term Sheet (1 v. Series Seed Term Sheet (v 2.0). You can follow this conversation by subscribing to the comment feed for this post.

Term Sheet 40

Term Sheet Ratchet Dilution Equity 40

Both Sides of the Table

JUNE 5, 2015

I am reminded of this problem every time my firm does a financing where a note went before us but more specifically I was reminded by this great post by Brad Feld to talk about the pre-money vs. post-money conversion issue. So how DOES a VC think about financings at early stages? It’s very simple. For me it’s clear.

Pre-Money Valuation 150

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

Genuine VC

JANUARY 13, 2014

The idea is that a couple of highly-qualified VC conversations will follow the 80/20 rule of a “good enough” financing in a relatively short amount period without taking the time of an extended process to truly optimize the funding outcome. becomes the “pace-car” for that lap.

Term Sheet 206

Term Sheet Venture Capital Valuation Portfolio 206

View from Seed

JANUARY 30, 2020

If you have a strong relationship with a founder that a VC has backed, that is usually the best intro you can get to kick off conversations with the investor. Once a VC has given you a term sheet or told you that they want to invest, it’s fair game to ask VC’s to introduce you to founders they have worked that you can reference.

Due Diligence 195

Due Diligence Partner Term Sheet Finance 195

Genuine VC

JANUARY 15, 2015

Of key importance, which we emphasize with our NextView portfolio companies when they’re out raising their Series A, is to run the conversations in parallel rather than serially. But reality doesn’t always play out as neatly. The post The “Come-from-Behind” Lead Investor appeared first on GenuineVC.'

Lead Investor 100

Lead Investor Term Sheet Venture Capital Portfolio 100

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

Both Sides of the Table

DECEMBER 14, 2010

They had received a term sheet from a VC and were wondering whether to work with this firm. But what about once you have a term sheet? They made great introductions, they helped you get financed, the put in more money themselves, they helped you strategically and they helped you with your exit.

Term Sheet 298

Term Sheet Venture Capital Stealth Cofounder 298

K9 Ventures

APRIL 14, 2020

Several months ago I was having a conversation with my friend and former co-worker @ HiHello, Leith Abdulla , about how I am frustrated with Slack and want a tool that removes the friction for communication with the remote team. I am pleased that I/K9 Ventures got to lead the Pre-Seed round of financing for Pragli.

Cofounder 127

Cofounder Venture Capital Guerilla India 127

Feld Thoughts

OCTOBER 12, 2011

Convertible Debt – Conversion Mechanics. Convertible Debt – Conversion In A Sale Of The Company. Convertible Debt – Other Terms. If you want to see an actual convertible debt term sheet or the actual legal documents, take a look at the TechStars Open Sourced Model Seed Financing Documents.

Term Sheet 138

Term Sheet Warrant Open Source Valuation 138

Both Sides of the Table

MAY 10, 2018

What you don’t know is that MANY of these financings have been a months’ long series of no’s, compromises, hard terms, heartaches, arguments, self doubt, followed by a “yes” that saves the day. When you finally get a term sheet you get three. Fund raising seems so easy for everybody else and you’re doing something wrong.

Term Sheet 232

Term Sheet France Technical Review Restful 232

Scott Edward Walker

JUNE 13, 2011

Cheers, Scott Top 5 Tweets Very solid RT @cdixon : Notes from a class on raising seed financing [link] cc @skillshare (All these Brilliant People at) Facebook Make Me Sad – “all that talent is building something I just don’t care about” [link] Thiel: Tech Bubble? .” Less is more.”

Term Sheet 45

Term Sheet Seed Capital Conversion Rights RSS 45

Startup Lessons Learned

MAY 31, 2019

Having been through the company-building process myself and after a decade in VC working with thousands of companies and negotiating hundreds of term sheets, I wrote this book to help demystify the process. But, other than a big macro shock that causes all financing to dry up, I think those situations are in the minority.

Lean 108

Lean Venture Capital Conversion IPO 108

Both Sides of the Table

SEPTEMBER 5, 2012

Was Paul Graham right in his “high resolution” financing post? I can’t say it much simpler than this: “What if I took some of the worst, most egregious terms in a standard term sheet and made them the defacto standard in most convertible debt deals? Let me explain it more clearly in equity terms.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

Both Sides of the Table

APRIL 23, 2017

It’s why raising a round of capital often feels like a hollow victory because it almost feels like a temporary reprieve from the Grim Reaper and in a way every new round just sets the bar higher to clear for the next round of financing or the hope of reaching profitability. You’re not done until you’re done. That’s fantasy land.

Burn Rate 238

Burn Rate Term Sheet CTO Hire Fractional CTO 238

David Teten

JULY 20, 2011

Discuss alternative arrangements such as caps, deferral until financing and equity as a form of payment. If your time is limited, ask your attorney to highlight what issues are most important, particularly in transactions such as a venture financing. Ten Tips for Entrepreneurs when Working with Lawyers. by Ed Reitler.

Intellectual Property 128

Intellectual Property Entrepreneur Term Sheet Venture Capital 128

Feld Thoughts

FEBRUARY 15, 2016

While going through my daily reading this morning, I came across a bunch of posts talking about how the sky was falling, Silicon Valley was in turmoil, financing was drying up everywhere, and all the unicorns were doomed. When I was an entrepreneur there was no public information about how term sheets worked or how investors thought.

Silicon Valley 70

Silicon Valley Term Sheet Early Stage New York 70

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

Gust

DECEMBER 27, 2012

You should know every metric regarding customer acquisition, conversion and retention. While yCombinator and TechStars are the two best known, there dozens of others, local, national and international, many specializing in specific areas (including fashion, food, finance, gaming, etc.)

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. If you were expecting angel or venture funding get on the phone to your investor(s).

South Korea 333

South Korea Salary Business Model China 333