Startup Professionals Musings

SEPTEMBER 14, 2010

Remember a term sheet agreement is not a deal until the check clears. However, there is no set pattern of terms an entrepreneur might be able to anticipate from an angel, either. Your best strategy is to bring your own term sheet to the negotiation as a starting point. Define equity type. Marty Zwilling.

Term Sheet 227

Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 227

David Teten

JANUARY 19, 2021

From traditional equity VC, Flexible VC borrows the option to pursue and reap the rewards of an outsized exit. Flexible VC 101: Equity Meets Revenue Share. Equity Ownership. Yes, typically preferred equity. On average, founders own just 43% of equity by Series B , declining thereafter. Flexible VC 102: Variations.

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Cofounder Technical Review Equity Dividend 78

ReadWriteStart

MARCH 31, 2020

According to Ben Narasin , “in 2020, investors will require firmer governance and oversight structures to safeguard against negative impact and ensure these protections are mandated in their term sheets.”. This may probably drive entrepreneurs to alternative funding options, such as equity crowdfunding.

Technical Review 175

Technical Review Artificial Inteligence Startup Term Sheet 175

ReadWriteStart

JUNE 1, 2020

Forms of funding. ? Equity investment. Equity investment is the most popular and most talked-about avenue for startup funding. These investments are made instead of shares or equity in your startup. Equity investors. The third source of funding is from equity investors. Stages of Equity-based funding. ?

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Startup Entrepreneur Elevator Pitch Seed Stage 150

Gust

OCTOBER 17, 2011

Remember a term sheet agreement is not a deal until the check clears. However, there is no set pattern of terms an entrepreneur might be able to anticipate from either. Your best strategy is to bring your own term sheet to the negotiation as a starting point. Define equity type. Anti-dilution protection.

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Term Sheet Pre-Money Valuation Due Diligence Post-Money Valuation 158

YoungUpstarts

OCTOBER 12, 2017

However, as a condition of financing they may require annual audited financial statements. For many startups this results in a need to raise additional financing through debt or equity arrangements. Many of these companies are pre-revenue and in the cash burn stage as they try to establish their technology and market.

San Francisco 133

San Francisco Forecast Early Stage Term Sheet 133

YoungUpstarts

OCTOBER 28, 2015

This article highlights their advice on issues ranging from financing to patent trolls: While startups may believe lawyers are too costly, working with one early on avoids potentially serious problems later. They also need to decide whether to structure terms as an equity deal or a convertible security deal. Incorporation.

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Convertible Security IP Technical Review Software Review 100

Startup Company Lawyer

AUGUST 31, 2012

Quick answer: convertible equity (or a convertible security) is convertible debt without the repayment feature at maturity or interest. ” In response, Seth Levine wrote a very thoughtful post on convertible debt versus equity. Fred Wilson has been openly critical of convertible debt , and prefers priced equity rounds.

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Convertible Security Equity Security Preferred Stock 73

www.seriesseed.com

MARCH 2, 2010

SeriesSeed.com Series Seed Financing Documents Blog Home Documents Blog Archives Subscribe 09/02/2010 Version 2.0   That’s because there are not that many issues to negotiate in a simple equity financing. In sum, Series Seed creates a level playing field between capped debt and equity documents in terms of speed and cost. 

Finance 58

Finance Term Sheet Equity Aggregator 58

Startup Company Lawyer

MARCH 14, 2010

After the recent announcement of the Series Seed Financing documents by Marc Andreesen, Brad Feld points out that there are now four sets of “open source&# equity seed financing documents: TechStars Model Seed Funding Documents (by Cooley). Y Combinator Series AA Equity Financing Documents (by WSGR).

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Finance Software Review Term Sheet Liquidation Preference 70

David Teten

AUGUST 19, 2019

This structure offers some of the benefits of traditional equity VC, without some of the negatives of equity VC. I’ve been a traditional equity VC for 8 years, and I’m now researching new business models in venture capital. We don’t have any equity or control over the business….”. “As Bigfoot Capital. Decathlon Capital.

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Revenue Technical Review Software Review Equity 60

www.seriesseed.com

DECEMBER 9, 2012

Series Seed Financing Documents Blog. Series Seed Financing Documents. Series Seed Term Sheet (v 2.0). Series Seed Term Sheet. Listed below are links to weblogs that reference Series Seed Financing Documents : 1 Reblog. Long term capital gains possible for early exit.

Finance 40

Finance Term Sheet Vesting LLC 40

The Startup Lawyer

AUGUST 24, 2010

Just like the preferred equity financing process, the convertible debt financing process can start with a term sheet, rather than a full set of financing documents. Closing : Is there a specific date that the convertible debt financing will close, or will there be an open round of seed investment ?

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Term Sheet Pre-Money Valuation Liquidity Event Warrant 62

Steve Blank

APRIL 1, 2020

Some VC’s are walking away from signed term sheets. As part of these operating changes, make sure your heads of HR and finance recognize that they have entirely new jobs. Award equity to employees equal to the value of their reduced salaries. Others are cutting their valuations. Draw down all debt commitments.

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South Korea Salary Business Model China 333

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.

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Finance Term Sheet Preferred Stock Bridge Financing 178

www.mattbartus.com

SEPTEMBER 24, 2011

Equity for Consultants – Keep it Simple! posted Feb 3 in Equity , People issues. for every hour works, consultant accrues [hourly wage]in debt that will convert to equity in the next round). Cooley Report Reviews Second Quarter Venture Capital Financing Trends. Term Sheets. Blog blog archive.

Equity 40

Equity Vesting Silicon Valley Intellectual Property 40

Gust

NOVEMBER 11, 2011

Angel investment events where the group investment is supposed to go to the winner, but the winner ends up hating the term sheet. Usually these term sheets involve convertible notes, which are supposed to convert to equity at the next round of financing, like when the serious venture capitalists do a Series A.

Software Review 79

Software Review Term Sheet Due Diligence Angel Investor 79

David Teten

DECEMBER 3, 2019

Private equity and venture capital investors are copying our sisters in the hedge fund world: we’re trying to automate more of our job. . In the private equity universe, most Partners have primary training as deal-makers, not as managers. (To see the video above, please click the image, and then click on the Play button.).

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Feld Thoughts

MARCH 2, 2010

Y Combinator Series AA Equity Financing Documents (by WSGR). Founders Institute Plain Preferred Term Sheet (by WSGR). Series Seed Financing Documents (by Fenwick & West). I wrote about this in my post The Challenge of The Ideal First Round Term Sheet.

Finance 133

Finance Term Sheet Angel Investor Early Stage 133

techcrunch.com

SEPTEMBER 6, 2012

It consists of a standard term sheet, automatically generated closing documents, and tools to manage the process including electronic signatures, managing wire information, generating PDFs, and more. AngelList will then automatically generate a term sheet and closing documents.

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Term Sheet San Francisco Technical Review Seed Stage 70

Berkonomics

DECEMBER 17, 2020

Let’s take a few minutes to examine the kind of equity financing available to small or early stage businesses. In most cases, these applicants for equity funding must be rooted in technology to apply to this limited discussion. The post When should you go for equity financing? Friends and family investors.

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Equity Finance Liquidity Event Angel Groups 62

Both Sides of the Table

SEPTEMBER 18, 2014

At an accelerator … Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Gust

OCTOBER 12, 2011

Last week , we took the plunge and began dissecting an example term sheet for a convertible debt financing round piece by piece. I’ll continue with more specific terms and wrap up next week with some thoughts about recent changes and trends for the future.

Finance 107

Finance Term Sheet Pre-Money Valuation Early Stage 107

Business Plan Blog

NOVEMBER 13, 2013

The first milestone in a new startup’s financing is called ‘Seed Capital’ which refers to the initial investment raised by the founders from their friends and family, or commonly referred to as FFF (Friends, Family and Founders), who mostly use their personal assets. *The Convertible Debt Financing. Raising Seed Capital.

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Finance Accredited Investor Angel Investor Seed Capital 93

Gust

SEPTEMBER 5, 2012

How to finance a new seed-stage startup? Convertible equity? ” Ressi in particular seems to be passionate about removing the “debt” component from convertible debt seed financing transactions. .” For a comprehensive tutorial with sample term sheet, see my prior series here at Gust.)

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Finance Convertible Security Equity Seed Stage 134

www.seriesseed.com

DECEMBER 9, 2012

Series Seed Financing Documents Blog.   That’s because there are not that many issues to negotiate in a simple equity financing. In sum, Series Seed creates a level playing field between capped debt and equity documents in terms of speed and cost.  SeriesSeed.com. Blog Archives. 09/02/2010.

Term Sheet 40

Term Sheet Ratchet Dilution Equity 40

Gust

OCTOBER 25, 2014

A Venture Capital Insider Reveals How to Get from Start-up to IPO on Your Terms. Term Sheets & Valuations. A Line by Line Look at the Intricacies of Term Sheets & Valuations. Venture Capital, Private Equity, and the Financing of Entrepreneurship. Venture Deals.

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Term Sheet Private Equity Exit Strategy Venture Capital 132

Gust

OCTOBER 21, 2011

For convertible notes, the only liquidity event we need be concerned with is an acquisition of the startup in the near future, before the maturity date; otherwise, the notes will convert to equity of one kind or another, and the eventual sale of that equity (in a public offering, acquisition, or private sale) is a different subject for another day.

Finance 79

Finance Pre-Money Valuation Term Sheet Liquidity Event 79

Both Sides of the Table

MAY 13, 2018

If an investor isn’t engaging then they’re not suddenly going to get a term sheet. If we feel a mutual connection then my goal is to make your life easier by offering you a term sheet before you’re even raising and I’ll spend the time and effort trying to prove that it isn’t worth running a process.

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Term Sheet Due Diligence Campaign Sales 332

Gust

OCTOBER 5, 2011

Last week , we gave some attention to the “why” behind convertible note financing for early stage startups. In this installment, I’ll dig into the “how” by dissecting an example term sheet based on a real deal. As with so many subjects in law and finance, mastering the jargon is half the battle.

Finance 79

Finance Preferred Stock Term Sheet Early Stage 79

Scott Edward Walker

JUNE 9, 2019

Over the past few weeks, two of my clients have received financing term sheets in which the investors requested super pro rata rights. Simply put, pro rata rights permit the investor to maintain its percentage ownership in subsequent financing rounds. Introduction. Pro Rata Rights.

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Preferred Stock Term Sheet Dilution Stock 56

Steve Blank

FEBRUARY 26, 2020

Btw, the definition of each startup financing stage has changed in the last decade. Pre-Seed Round Paperwork: Smart investors will typically give you minimal paperwork – either a convertible note or a SAFE (Simple Agreement for Future Equity) or a KISS (Keep It Simple Securities). Step 3: The Series A – you raise $5-$10M.

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Cofounder Seed Stage Valuation Metrics 429

Altgate

APRIL 22, 2009

 Today,  Wilson Sonsini  announced the launch of a " term sheet generator." "  It's basically a web tool that creates draft preferred financing term sheets for startups.  I got a preview of it a couple of weeks ago and my review is that it is really impressive!

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Term Sheet Intellectual Property Venture Capital Hawaii 52

Reid Hoffman

JULY 27, 2021

As opposed to taking a potentially smart risk on equity). In particular, Bill Sahlman’s Entrepreneurial Finance course was excellent. It’s not like after completing the class I was prepared to negotiate a term sheet. For example, MBA students take classes on accounting and finance.

Silicon Valley 69

Silicon Valley Venture Capital Balance Sheet Cofounder 69

Reid Hoffman

JULY 27, 2021

As opposed to taking a potentially smart risk on equity). In particular, Bill Sahlman’s Entrepreneurial Finance course was excellent. It’s not like after completing the class I was prepared to negotiate a term sheet. For example, MBA students take classes on accounting and finance.

Silicon Valley 69

Silicon Valley Venture Capital Balance Sheet Cofounder 69

Both Sides of the Table

JUNE 5, 2015

” Today I want to talk about how a VC thinks about equity pricing on your round and particularly if you’re coming off of a convertible note. So how DOES a VC think about financings at early stages? So you can see why this leads to a lot of tension and misunderstanding. It’s very simple. For me it’s clear.

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Pre-Money Valuation Option Pool Post-Money Valuation Dilution 150

www.vccafe.com

MARCH 11, 2013

easy business finance software. YCombinator Series AA Equity Financing Documents. WSGR Term Sheet Generator. Orrick, Herrington Term Sheet Generator. Founders Institute Plain Preferred Term Sheet â?? Founders Institute Plain Preferred Term Sheet â?? Founder Equity Issues.

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Software Review Technical Review Startup 53