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. Individual investors who provide financial funding to startups are called ‘Angel Investors.’ Convertible Debt Financing. Bridge notes/loans are an example of convertible debt. Raising Seed Capital.

Finance 93

Finance Accredited Investor Angel Investor Seed Capital 93

Gust

SEPTEMBER 5, 2012

How to finance a new seed-stage startup? Convertible debt? Convertible equity? As of August 2010, Paul Graham famously proclaimed , “Convertible notes have won. Every investment so far in this YC batch (and there have been a lot) has been done on a convertible note.”

Finance 134

Finance Convertible Security Equity Seed Stage 134

Hippoland

MAY 16, 2018

I put “equity” in quotes because I include convertible notes and convertible securities in this category.) But, the vast majority of startups these days will not be able to raise money from large seed funds who lead. (And This leads me to point #3. And that’s ok!) E.g. $200k on $3m.

Seed Stage 48

Seed Stage Valuation Equity Convertible Security 48

Hippoland

MAY 16, 2018

I put “equity” in quotes because I include convertible notes and convertible securities in this category.) But, the vast majority of startups these days will not be able to raise money from large seed funds who lead. (And This leads me to point #3. And that’s ok!) E.g. $200k on $3m.

Seed Stage 48

Seed Stage Valuation Equity Convertible Security 48

Hippoland

MARCH 30, 2018

Part 2 will be for pre-seed/seed companies raising traditional equity / debt / convertible security rounds. Basically, early customers buy into a new startup’s token at a special price, and those customers benefit from that price if the company does well. Startups are doing much smaller token sales (and I’m glad)!

Seed Stage 48

Seed Stage Syndicate Syndication Convertible Security 48

Hippoland

MARCH 30, 2018

Part 2 will be for pre-seed/seed companies raising traditional equity / debt / convertible security rounds. Basically, early customers buy into a new startup’s token at a special price, and those customers benefit from that price if the company does well. Startups are doing much smaller token sales (and I’m glad)!

Seed Stage 48

Seed Stage Syndicate Syndication Convertible Security 48

Hippoland

AUGUST 31, 2018

He has done incredibly well financially on his past two startups, and he’s now building his 3rd company. And if you do the math of VCs buying roughly 20% of a startup, valuations can be upwards in the $50m+ range for today’s series A rounds! But when we were talking, he expressed frustration in raising his series A round.

Pre-Money Valuation 90

Pre-Money Valuation Valuation Silicon Valley Early Stage 90

Hippoland

AUGUST 9, 2016

Get a standard convertible note (or convertible security such as 500 Startups’ KISS A), and fill it out. Remember, with a convertible note, you can quickly get e-signatures, and investors can start sending you money that you can put to work right away even if you have not yet reached your target raise.

Lead Investor 48

Lead Investor Term Sheet Due Diligence Convertible Security 48

Gust

OCTOBER 5, 2011

Last week , we gave some attention to the “why” behind convertible note financing for early stage startups. At least one well-known Silicon Valley venture accelerator is using a document referred to as a “ convertible security ” rather than “convertible promissory note.”

Finance 79

Finance Preferred Stock Term Sheet Early Stage 79

Hippoland

AUGUST 31, 2018

He has done incredibly well financially on his past two startups, and he’s now building his 3rd company. And if you do the math of VCs buying roughly 20% of a startup, valuations can be upwards in the $50m+ range for today’s series A rounds! But when we were talking, he expressed frustration in raising his series A round.

Pre-Money Valuation 48

Pre-Money Valuation Valuation Silicon Valley Early Stage 48

Board Effect

MAY 10, 2019

In the early days, tracking the percentage of ownership in a startup is easy. Things can escalate quickly, however, when a startup decides to seek investors. A well-kept cap table is a necessary ingredient of proper recordkeeping long after a startup has “started up”. Why do cap tables matter? the number of shares owned.

Cap Table 40

Cap Table Liquidation Preference Dilution Liquidity Event 40