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Finance Friday’s gets off the ground with today’s post by introducing you to an imaginary startup, the entrepreneurs that we’ll being following throughout the series, and their first challenges: splitting up the founders’ equity and addressing the case where one of the founders provides the initial seedcapital for the business.
The term sheet converts all the convertible debt into a post-moneyvaluation of $100, essentially making the convertible debt worthless. The new money comes in at a pre-moneyvaluation of $100, but includes a complete refresh of founder equity to 40% of the company. Sure – it happens.
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