Startup Professionals Musings
SEPTEMBER 27, 2023
Retain the right to reclaim stock from anyone leaving the startup. To retain control, the original founder must reserve the right of first refusal to buy shares back at cost from a partner who decides to leave early or stop working. Facilitate an upgrade of founder’s common to founder’s preferred.
Startup Professionals Musings
JANUARY 15, 2021
Retain the right to reclaim stock from anyone leaving the startup. To retain control, the original founder must reserve the right of first refusal to buy shares back at cost from a partner who decides to leave early or stop working. Facilitate an upgrade of founder’s common to founder’s preferred.
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Startup Company Lawyer
AUGUST 31, 2012
” As a result, Ted introduced the Series Seed preferred stock documents as an alternative to convertible debt for early stage investments. At the maturity date, there is a risk that investors may demand repayment. The problem. Why convertible equity is better than convertible debt. Convertible debt may need to be repaid.
ReadWriteStart
JUNE 1, 2020
In very few specific cases, depending on the nature of the business, the business model might demand a considerable gestation period or extensive research and development. It is going to cost a lot of money just to get the initial batch of products to test the market and would definitely require external funding.
Both Sides of the Table
JULY 29, 2010
The downside is that people need to buy their stock. I talked also about 409a valuations and why common stock purchases cost less than preferred stock purchases. But if you do this early (pre VC) then the price points are pretty low. Do it early. Bad behavior but prevalent. Minutes 11-16 in the video. <<
Startup Professionals Musings
JANUARY 29, 2018
To retain control of your business, you need to reclaim stock shares from anyone leaving the startup for any reason. Otherwise, later stock value growth may be lost or used against you before you can capitalize on it. Buying back stock on the open market may cost a huge premium.
David Teten
AUGUST 19, 2019
The idea is for us to take advantage of a cost/expense that our borrowers are already incurring (credit card fees) and structure an investment that truly aligns our interests. Sample Series B Preferred Stock sample term sheets from: Kauffman Foundation and Carlton Fields Jorden Burt. Also of interest.
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