Gust

OCTOBER 21, 2011

To account for scenarios in which the startup is acquired before it has a chance to complete a priced equity financing round, most term sheets and deal documents contain a “ change in control ” provision. Suppose the notes converted as if the acquisition were an eligible financing round.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

Feld Thoughts

SEPTEMBER 27, 2011

In the case of an early-stage startup that hasn’t issued preferred stock yet, the debt converts into stock of the acquiring company (if it’s a stock deal) at a valuation subject to a cap. If it’s not a stock deal, then one normally sees one of the above scenarios. Typical language follows.

Conversion 96

Conversion Sales Later Stage Preferred Stock 96

Tim Keane

JANUARY 12, 2010

For angel groups, the distinction between groups and VCs on this issue is dwindling, especially as angel groups do bigger rounds of financing.   Note that this applies only to earl stage Series A-type equity financings and assumes no cash dividends are paid to investors.   First , dividends.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

K9 Ventures

NOVEMBER 21, 2011

And that too usually when there is sufficient investor demand for the next round, i.e. the leverage needs to be in the company’s hand (rather than investors) for any type of founder liquidity to even be an option. The concept of the Series FF stock is a good example of this.

Founder 87

Founder Common Stock Preferred Stock Stock 87

K9 Ventures

NOVEMBER 21, 2011

And that too usually when there is sufficient investor demand for the next round, i.e. the leverage needs to be in the company’s hand (rather than investors) for any type of founder liquidity to even be an option. The concept of the Series FF stock is a good example of this.

Founder 84

Founder Common Stock Preferred Stock Stock 84

www.vccafe.com

MARCH 11, 2013

on demand billing and fraud management. easy business finance software. YCombinator Series AA Equity Financing Documents. Y Combinator : They provide a series of AA equity financing documents that are written with simpler words so start-up companies will have an easier starting point. Startup Threads. SlideShare.

Software Review 53

Software Review Technical Review Startup 53

Scott Edward Walker

JULY 27, 2011

There are, however, certain formal procedural requirements that the stockholder must comply with, including making a written demand upon the corporation, “under oath” and stating a “proper purpose.” The board can either accept or reject the demand. Moreover, there are certain tricky evidentiary issues.

Delaware 49

Delaware Liquidation Preference Redemption Los Angeles 49

The Startup Lawyer

MARCH 11, 2010

I welcome these and future standardized seed funding docs because they provide entrepreneurs with the chance to take a look at financing terms. No set of seed funding documents will replace counsel, either pre-financing or post-financing. There will always be demand for good counsel.

Delaware 49

Delaware Hockey Stick Preferred Stock Open Source 49

The Startup Lawyer

MARCH 11, 2010

I welcome these and future standardized seed funding docs because they provide entrepreneurs with the chance to take a look financing terms. No set of seed funding documents will replace counsel, either pre-financing or post-financing. There will always be demand for good counsel.

Delaware 45

Delaware Hockey Stick Preferred Stock Open Source 45

Startup Company Lawyer

JANUARY 11, 2010

I seem to be doing a lot of pre-Series A convertible bridge note financings these days. 50%) or warrant coverage are typically more company-favorable than a Series A financing where a valuation is set. If the investor had invested $500K in a Series A Preferred Stock at a $4.5M Assume the angel investor invests $500K.

Angel Investor 39

Angel Investor Valuation Bridge Financing Preferred Stock 39

abovethecrowd.com

MAY 20, 2013

There are common stock, common options, and as many as three to five different layers of preferred stock, each with a specific liquidation preference. Basically, everyone uses loose finance arguments to over-inflate their own company’s valuation so that they can demand a bigger slice of the pie of the new company.

Merger 53

Merger Institutional Investors Liquidation Preference Preferred Stock 53