Gust

APRIL 11, 2014

Let’s get right down to business: Dilution of founders’ and other early shareholders’ equity in startups is frequently a subject of intense interest and debate. Yet what matters fundamentally is economic dilution : Will adding newly issued shares make existing shares less valuable, and if so, by how much? .”

Dilution 162

Dilution Equity Pre-Money Valuation Prospectus 162

Scott Edward Walker

APRIL 9, 2012

Part 3 will cover certain special issues, such as (i) what happens if the startup is acquired prior to the note’s conversion to equity? (ii) ii) what happens if the maturity date is reached prior to the note’s conversion to equity? A convertible note is short-term debt that converts into equity. price the round).

Preferred Stock 87

Preferred Stock Finance Common Stock Liquidation Preference 87

Startup Professionals Musings

APRIL 19, 2010

Later, when your venture is trying to close on financing, or even going public, that forgotten partner surfaces, demanding equity. This problem can be avoided by incorporating immediately after early discussions, and issuing shares to the founders, with normal vesting and other participation rules.

Non-Compete 125

Non-Compete Accredited Investor Startup Cofounder 125

Up and Running

JULY 20, 2015

Additionally, many businesses choose to add supplemental information about large transactions that don’t involve cash, like converting debt to equity or issuing shares in return for assets. It’s worth noting that cash flow statements can be affected by non-cash transactions, like depreciation or bad-debt expenses.

Dividend 60

Dividend Balance Sheet .Net Merger 60

The Startup Lawyer

JANUARY 26, 2010

Each founder is issued shares in the startup in exchange for the founder’s intellectual property (and usually a small amount cash). In other words, the startup issues shares to the founder as consideration for the founder’s intellectual property and small check. Consideration can also be cash.

IP 57

IP Intellectual Property Founder Stock Options 57

Scott Edward Walker

MAY 15, 2012

The second approach is the most investor-friendly, and it is a provision that permits the noteholders to convert the notes into equity (or otherwise grants them a certain percentage of the sale proceeds), based on an agreed-upon valuation of the startup. 2) Conversion Right (Investor-Friendly). a new maturity date) with the noteholders.

Finance 64

Finance Founder Accredited Investor Preferred Stock 64

www.mattbartus.com

DECEMBER 9, 2012

Prior to the VC’s exercise of the warrants, the founders will actually own 67% of the issued shares because the warrant shares are not outstanding until the warrants are exercised. ” Share this: Facebook Twitter Email Reddit StumbleUpon. Equity for Consultants - Keep. Equity (5). Warrants. -.

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40