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Timing: When to raise seed funding.

Scalable Startup

Raising seed capital is a tricky business. They come in lots of different flavors and stages of fundability. Most are making major mistakes in their approach when seeking capital. At this stage you’re essentially selling yourself and your cofounders. To me, this is the best time to raise your seed.

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Angel Investors vs. Angel Groups

Business Plan Blog

Angels need to meet the Securities Exchange Commission’s definition of an accredited investor, which in their case is they need to have a net worth of at least $1 million and make $200,000 a year—or $300,000 a year jointly with a spouse. Download our free Raising Capital from Angel Investors eBook. What is an angel group?

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Knowledge Is Power: Convertible Note Financing Terms, Part I

Gust

Given that convertible debt financing has become the de facto standard for small (<$1MM), early stage deals in recent years, I thought I would write a primer on the elements of a term sheet and definitive documents for entrepreneurs looking at the earliest stage financing rounds.

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When Should Startup Founders Discuss Valuation with Seed VCs?

View from Seed

As the seed-stage startup fundraise process has received more transparency in recent years, ranging from published advice on how to raise seed capital to increased availability through AngelList, Funders Club, and various accelerator programs, I’ve noticed another trend emerging.

Valuation 336
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JOBS Act to Change Startup Funding Landscape

ReadWriteStart

The most important belt that the Jumpstart Our Business Startups Act loosens concerns the amount of capital a new company may raise through the sale of securities in a 12-month period. Previously $5 million, the securities sales cap will be raised to $50 million. But it is also a good way for hucksters to fleece suckers.".

IPO 121
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Knowledge Is Power: Convertible Note Financing Terms, Part II

Gust

Last week , we gave some attention to the “why” behind convertible note financing for early stage startups. Let’s dive in, taking it from the top: Type of Security : Convertible Promissory Notes, bearing interest at a simple interest rate of 8%. In fact, there is a recent variation on this theme.

Finance 79
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Convertible Debt: Worst Form Of Seed Financing — Except For All The Others

Gust

The new form of convertible security or “convertible equity” is essentially a convertible note containing most of the usual terms — except it’s been stripped of the features that would make it a loan. (For a comprehensive tutorial with sample term sheet, see my prior series here at Gust.)

Finance 134