Agile VC

APRIL 17, 2011

Kayak was started here in my backyard of Boston… co-founder & CTO Paul English and the product/engineering team is based here in Concord MA. Co-founder & CEO Steve Hafner and the business team are based in Norwalk, CT. Series A Preferred. liquidation preference, 6% accumulated dividend (1). as of 12/31/09).

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

ithacaVC

DECEMBER 22, 2012

I recently engaged in a conversation (over a few days) about the need for a seed stage company to have a board member other than the founder. For clarity, a company with one founder can have a one member board (assuming a corporation). The decision to have an investor on the board is really one for the founder.

Seed Stage 82

Seed Stage Preferred Stock Founder Angel Investor 82

Scott Edward Walker

JUNE 9, 2019

Accordingly, I thought it would be helpful for founders to discuss these rights and to point out the problems they create for startups. This is a huge red flag and founders should push back very hard. In short, super pro rata rights are another example of investors trying to take advantage of inexperienced founders.

Preferred Stock 56

Preferred Stock Term Sheet Dilution Stock 56

Scott Edward Walker

APRIL 9, 2012

As a result, the pendulum has swung dramatically in the founders’ favor, and the issuance of convertible notes for seed financing has never been more prolific. ii) why are convertible notes issued instead of shares of common or preferred stock? In addition, the issuance of shares of common stock creates three potential problems.

Preferred Stock 87

Preferred Stock Finance Common Stock Liquidation Preference 87

Berkonomics

JANUARY 6, 2022

First, the marginal exit event: Sometimes the end game or sale of the company is not a happy event for the early investors, including the entrepreneur or the founders. Most sophisticated investors will take either a promissory note or preferred stock, both of which come before founder or management stock in a sale or liquidation.

Dividend 62

Dividend IRR Preferred Stock Participating Preferred 62

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

View from Seed

OCTOBER 15, 2014

So, rather than try and fill time unnecessarily and create a lengthy deck just because you’re “supposed to,” Rob — and we’d guess many other VCs as well — will often suggest that a founder create a simple one-sheeter that might start small and build over time.

Seed Stage 331

Seed Stage Cap Table Metrics Burn Rate 331

Gust

OCTOBER 5, 2011

In case it isn’t clear by now, angel investors aren’t in the business of making risky early stage investments in order to earn 6% interest on their money, or even 10%— the upside is all in conversion to equity—so the interest rate isn’t a major point of negotiation. per share for 2,000,000 shares of newly issued Series A Preferred Stock.

Finance 79

Finance Preferred Stock Term Sheet Early Stage 79

The Startup Lawyer

JUNE 22, 2010

For this article, let’s assume this equity is the Series A Preferred Stock purchased by a venture capital fund. For example, if a venture capital fund purchases Series A Preferred Stock at $1.00 per share, the discount may allow the angel investor to purchase the same Series A Preferred Stock at $0.75

Pre-Money Valuation 82

Pre-Money Valuation Angel Investor Preferred Stock Valuation 82

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

Berkonomics

OCTOBER 1, 2015

Sometimes the end game or sale of the company is not a happy event for the early investors, including the entrepreneur or the founders. Most sophisticated investors will take either a promissory note or preferred stock, both of which come before founder or management stock in a sale or liquidation.

Dividend 48

Dividend Preferred Stock IRR Participating Preferred 48

Up and Running

DECEMBER 1, 2015

Typically, employers that offer employees equity compensation will do so in the form of common stock, preferred stock, or stock options. As opposed to stock options where the employee can decide to purchase the stock or not, restricted stock is often “granted” or given to the employee.

Equity 60

Equity Employee Stock Options Vesting 60

Scott Edward Walker

JULY 7, 2011

A redemption right is another feature of preferred stock and permits the investors to require the company to repurchase their shares after a specified period of time; it is, in effect, a “put” right – that is, the investors may elect to put their shares back to the company. What Are the Key Issues for Founders?

Term Sheet 49

Term Sheet Redemption Venture Capital Preferred Stock 49

Business Plan Blog

APRIL 10, 2012

In the context of a seed financing, the debt typically automatically converts into shares of preferred stock upon the closing of a Series A round of financing.” In layman’s terms, investors will give money to a startup but instead of getting money back, they get preferred stock in return. Interested?

Finance 40

Finance Preferred Stock Equity Stock 40

Business Plan Blog

NOVEMBER 13, 2013

Most startup founders do not have enough capital to launch their companies and need to raise money at some point. 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. 3) Giving non-voting stock.

Finance 93

Finance Accredited Investor Angel Investor Seed Capital 93

ithacaVC

DECEMBER 13, 2013

They are typically pretty simple: (i) shares owned by founders and (ii) shares authorized for issuance in a stock option pool, some of which may be issued to employees already and some of which will be available for future issuance. If no additional equity is ever granted to Founder X and Founder Y, then Founder Y will ALWAYS own 1.63

Cap Table 67

Cap Table Pre-Money Valuation Option Pool Liquidation Preference 67

thestartuplawyer.com

FEBRUARY 24, 2010

He obviously never launched a startup and got shafted by a co-founder. He obviously never launched a startup and got shafted by a co-founder. He obviously never launched a startup and got shafted by a co-founder. He obviously never launched a startup and got shafted by a co-founder. And that’s a big mistake.

Cofounder 40

Cofounder Founder Preferred Stock Startup 40

Gust

OCTOBER 21, 2011

In Parts II and III, we looked at commonly used mandatory and voluntary conversion language in convertible notes. In descending order of preference from the founders’ point of view: 1. Investors would be repaid their principal, plus accrued interest, divided by the conversion price (let’s say 30% discount, so 1 – 0.3 = 0.7).

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

Both Sides of the Table

SEPTEMBER 5, 2012

Can you imagine investing in the stock market where your price was determined at a future date and the better that company performed the HIGHER the price you paid for that investment. In fact, most early investor work hard to help their startups get to the next level so it makes no sense for the angel investor and founders to be at odds.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

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). So, we needed a solution. I hope the investor agrees. I am curious to see how it works out.

Common Stock 45

Common Stock Stock Cap Table Preferred Stock 45

Scott Edward Walker

SEPTEMBER 14, 2011

It is important for founders to understand that VC term sheets are usually deemed to be “non-binding” (other than perhaps a few provisions, such as the “no-shop” provision and legal fees and expenses). What Are the Key Issues for Founders? Fourth, founders should button-down all of the key issues in the term sheet.

Term Sheet 76

Term Sheet Due Diligence Liquidation Preference Redemption 76

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. Liquidation preference is the amount of money that an investor gets paid before the common stock (e.g. Take liquidation preferences head on.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Dividend 289

Both Sides of the Table

APRIL 6, 2020

So my only goal is to give you insights into the conversations we’ve been having in case you don’t have the same access or advice. It’s slightly harder if you’ve only done an A-round and therefore have just one VC around the table who owns more than a majority of the preferred stock.

Programming 279

Programming Affiliate SBA Government 279

Tim Keane

JANUARY 12, 2010

Term-sheets for preferred stock offerings are designed to protect the investor in case things don’t go as well as planned. These include: ·       Vesting of Founder Stock. These include: ·       Vesting of Founder Stock.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

The Startup Lawyer

FEBRUARY 4, 2011

But before your startup signs up and cashes that $[XX,000] check, your startup’s co-founders should sit down and evaluate the incubator’s offer. Most incubators take common stock and sit “side-by-side&# with the founders, but some may want some (weak) preferred stock and/or dilution protection.

Incubator 105

Incubator Pre-Money Valuation Option Pool Advisory Board 105

Scott Edward Walker

JULY 27, 2011

Indeed, whether a minority common stockholder is a founder, an advisor or even a friends/family investor, such stockholder will usually not be contractually granted any of the rights that are typically granted to preferred stockholders.

Delaware 49

Delaware Liquidation Preference Redemption Los Angeles 49

Up and Running

SEPTEMBER 20, 2021

Furthermore, there are various forms of equity, such as preferred stock, common stock, and convertible notes, which influence the present and potential future investors. Founders can apply the information to instantly ascertain what percentage of the startup they have to propose a new investor. Preference shares.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

Professor VC

DECEMBER 26, 2012

I did finally chime in on the twitter discussion yesterday: I first blogged about this topic almost two years ago when I called out the large number of convertible debt seed financings that weren't going to have any conversion event. If not, move on and join another team or come up with another idea with the same or different co-founders.

Finance 48

Finance Angel Investor Private Equity Preferred Stock 48

Up and Running

MAY 23, 2016

“If you can fix a problem for someone and do it better, quicker, and/or cheaper than your competitor, you’re off to a good start.” – Gabriel Kuperman, founder and CEO of CuePin. We created UpKeep to fill this void—a cloud-based solution that was affordable for any size business.” – Ryan Chan, founder of UpKeep.

Software Review 74

Software Review Software Delaware Forecast 74

Scott Edward Walker

JUNE 9, 2011

Conversion Rights What Are Conversion Rights? As many of you know, VC investors are typically issued shares of preferred stock, not common stock. As many of you know, VC investors are typically issued shares of preferred stock, not common stock. What Are Optional Conversion Rights?

Term Sheet 60

Term Sheet Conversion Rights Venture Capital Liquidation Preference 60

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

FEBRUARY 24, 2015

Lost in this conversation are the dramatic differences between a high priced private round and an IPO. Conversely, these late stage private rounds have no such pageantry or process. Most private company financings involve the use of preferred stock with liquidation preferences.

IPO 40

IPO Liquidation Preference Valuation Technical Review 40

Gust

OCTOBER 26, 2011

The purchase agreement sets forth the terms of the investment, often including the mandatory and voluntary conversion provisions we’ve covered in this series, as well as customary representations and warranties of the Company and the investors. See discussion of amendments below.) merger or acquisition).

Finance 79

Finance Term Sheet Covenant Accredited Investor 79

techcrunch.com

SEPTEMBER 2, 2012

Today, TheFunded.com and the Founder Institute is announcing in conjunction with law firm Wilson Sonsini, Convertible Equity, a startup-friendly seed-financing vehicle intended to replace Convertible Debt notes. FOUNDER INSTITUTE. Company: Founder Institute. Since 2009 the Founder Institute has helped. Crunchbase.

Equity 87

Equity San Francisco Technical Review Angel Investor 87

www.vccafe.com

MARCH 11, 2013

.” Hackernews list of “Tools of the Trade” for startups - includes over 150 SaaS tools used by startups, and over 150 comments with interesting insights from founders. GetSatisfaction - conversations between companies / customers. Founders Institute Plain Preferred Term Sheet â?? Founder Equity Issues.

Software Review 53

Software Review Technical Review Startup 53