Both Sides of the Table

SEPTEMBER 5, 2012

Was Paul Graham right in his “high resolution” financing post? valuation and another person funds you with convertible debt at $5m valuation (high resolution financing) and your equity round finally closes at a $10 million valuation. I recommend that startups agree the “conversion price” at maturity.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

Both Sides of the Table

SEPTEMBER 18, 2014

It’s like we need a finance 101 course for entrepreneurs. In finance they call it “terminal value” but the truth is the price is as arbitrary at your A round as it is at your seed round. These are all real conversations. What if when you have that conversation you don’t agree? ” Simple.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

ConversionXL

NOVEMBER 17, 2022

From search terms being used to visit your website, pages visited, and conversations happening on social media, you can create lead magnets that appeal directly to your audience’s needs to sway customers in the consideration phase. Conversion rate. Learn how to measure your conversion rate to accurately calculate growth.

Analytics 106

Analytics Metrics Channel Campaign 106

Gust

SEPTEMBER 5, 2012

How to finance a new seed-stage startup? ” Ressi in particular seems to be passionate about removing the “debt” component from convertible debt seed financing transactions. .” I won’t rehash all of the customary convertible note financing deal terms and points of negotiation here. (For

Finance 134

Finance Convertible Security Equity Seed Stage 134

Both Sides of the Table

JANUARY 5, 2010

Through comment conversations with many of you I tried to emphasize that it isn’t enough to just have one attribute. If your idea is so amazing that it warrants my hard-earned angel money or the money of my LP investors from our fund then why should I take a risk on you if you won’t take a risk on yourself? You need the whole package.

Entrepreneur 293

Entrepreneur CTO Hire South America Salary 293

ithacaVC

NOVEMBER 12, 2011

Typically, with convertible debt, the note holder expects the debt to convert into the next equity financing (often a Series A round). And, typically, the note holder is given a discount on the conversion price. Conversion Discount vs Warrant Coverage. 85 a share (just divide the debt amount plus interest by $.85).

Warrant 49

Warrant Liquidation Preference Equity Stock 49

Feld Thoughts

JULY 29, 2011

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 seed capital for the business.

Equity 137

Equity Finance Pre-Money Valuation Denver 137

Scott Edward Walker

APRIL 22, 2012

This post is the second part of a three-part primer on convertible note seed financings. Part 1, entitled “ Everything You Ever Wanted To Know About Convertible Note Seed Financings (But Were Afraid To Ask) ,” addressed certain basic questions, such as (i) what is a convertible note? (ii) What Is a Conversion Discount?

Pre-Money Valuation 72

Pre-Money Valuation Finance Liquidation Preference Founder 72

ConversionXL

NOVEMBER 7, 2022

For example, GasBuddy’s driving insights email matches the color scheme, imagery, and conversational messaging of its website: The style of content is familiar to customers, making it more naturally engaging. The peaks and troughs of trends can warrant further inspection. Consider what your audience cares about. What’s on the rise?

Audience 109

Audience Campaign North America Demand 109

View from Seed

OCTOBER 15, 2014

Include both positives and negatives for a more productive board conversation, which is especially critical in the seed stage since nearly everything is in “figure it out” mode. Finance is mission critical, for instance – it just appears on a recurring basis. However, these are important updates for your board to know.

Seed Stage 331

Seed Stage Cap Table Metrics Burn Rate 331

ReadWriteStart

JANUARY 27, 2011

For a more elaborate explanation of the deal, please read my blog post 1M/1M: Alternative Financing For Startups Using A Sales Channel Partner. And a few words about Persistent Systems, an outsourced software product development (OPD) company that is navigating its next phase of evolution are also warranted. Note, I said, validated.

Dilution 114

Dilution Revenue Finance Entrepreneur 114

The Startup Magazine

JUNE 1, 2023

As a founder, ask yourself – does your business actually warrant VC funding? If the answers are no, have an honest conversation with your VCs today. Ten back and forth emails can often be resolved in a 30-second phone conversation. Can you produce venture returns in this new economic reality?

Early Stage 111

Early Stage Los Angeles Silicon Valley Cofounder 111

Gust

SEPTEMBER 17, 2014

It’s like we need a finance 101 course for entrepreneurs. In finance they call it “terminal value” but the truth is the price is as arbitrary at your A round as it is at your seed round. These are all real conversations. What if when you have that conversation you don’t agree? There were no metrics. Last year ….

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Feld Thoughts

OCTOBER 12, 2011

Convertible Debt – Conversion Mechanics. Convertible Debt – Conversion In A Sale Of The Company. Convertible Debt – Warrants. If you want to see an actual convertible debt term sheet or the actual legal documents, take a look at the TechStars Open Sourced Model Seed Financing Documents. Convertible Debt Series.

Term Sheet 138

Term Sheet Warrant Open Source Valuation 138

Austin Startup

MARCH 23, 2017

Digital ink has been spilled across the interwebs these past two weeks on the issues with different types of venture financings. Priced equity financings make sense as they provide clarity around valuation and ownership dilution, while creating alignment between the investors and founders. Which one is most appropriate though?

Dilution 54

Dilution Equity Warrant Distribution 54

www.inc.com

SEPTEMBER 24, 2011

Finance | Tuesdays. Financing a Small Business. Financing A Small Business. Personal Finance. Equity payments are structured as common stock or as warrants, which give Arizona Bay the right to purchase equity in a clients company at an agreed-upon price at some point in the future. Start-up | Mondays. Franchises.

Arizona 40

Arizona Equity Iowa Venture Capital 40

Lightspeed Venture Partners

DECEMBER 10, 2012

This is a loan with a 15% warrant attached at a zero strike price. They often do get warrants attached to their loans, but for nowhere near 15% of the company; usually an order of magnitude less. Through further conversation it turned out that the 200 units were sold 6 months ago and the company had not sold anything since.

Covenant 162

Covenant Warrant Southern California Los Angeles 162

ConversionXL

JULY 7, 2020

Even industries like finance can gain traction on Pinterest. Since finance is one of the most competitive and expensive niches on Google Ads , it’s a unique—if challenging—opportunity on Pinterest. They did it by: Focusing on personal finance, which allows them to showcase moving stories of individuals. But it can be done.

Marketing 114

Marketing Viral Campaign Search 114

Austin Startup

AUGUST 20, 2017

Startups often hand out shares, options, and warrants for employees and for contractors rendering needed services. Messy cap tables can come back to haunt you when you do a financing or sell the company. Your Cap Table is something that deserves constant care and attention. The rest will take care of itself.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

Austin Startup

AUGUST 30, 2018

So while the number of dollars pouring into Austin may be increasing, that metric is only favorable to businesses that warrant those sized-rounds. Of these rounds, nearly every one was classified as a Series B or later-stage round, with the exception of a few debt and equity financing rounds. What does this information mean?

Austin 48

Austin San Francisco Early Stage Later Stage 48

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 ? 2X/3X, etc.)

Term Sheet 62

Term Sheet Pre-Money Valuation Liquidity Event Warrant 62

David Teten

JANUARY 13, 2015

Next, I would push ‘anti-pattern’ entrepreneurs to remove the convenient (and often true) excuses for not warranting investment. Admit you have biases, like we all do, then recognize you need to put steps in place to overcome that – like start an NBA development league in China.” . Don recommends: Don’t just do startups “for us”.

Venture Capital 60

Venture Capital Greece Advisory Board Cofounder 60

venturehacks.com

OCTOBER 21, 2010

Reading on, the term sheet states, “The $8 million pre-money valuation includes an option pool equal to 20% of the post-financing fully diluted capitalization.&# That does work if the company gets sold before another round of financing. This can be done on any financing or M&A event.

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68

VC Adventure

AUGUST 30, 2010

Typically this conversion is at a discount to the next equity round (to compensate the debt investors for their risk) and sometimes carries warrants (same rational) or a cap on the equity price that the debt converts into. Historically convertible debt has been easier (and therefore cheaper) to put in place.

Angel Investor 103

Angel Investor Early Stage Equity Valuation 103

Startup Company Lawyer

JANUARY 11, 2010

I seem to be doing a lot of pre-Series A convertible bridge note financings these days. As I have written previously , I think that convertible notes with even large conversion price discounts (e.g. 50%) or warrant coverage are typically more company-favorable than a Series A financing where a valuation is set.

Angel Investor 39

Angel Investor Valuation Bridge Financing Preferred Stock 39

ithacaVC

APRIL 5, 2011

It also lists out option holders and warrant holders. The investment is a small one and, to me, the investor is basically buying a ticket to watch the company and participate in future financings if desirable. A cap table is a written record (in Excel, for example) of who owns stock in your company. Seems like a win-win.

Common Stock 45

Common Stock Stock Cap Table Preferred Stock 45

Occam's Razor

AUGUST 28, 2017

3: AI: A conversation with a skeptic. If you still disagree, scroll down and post a comment, I would love to hear your perspective and engage in a conversation. AI: A conversation with a skeptic. I assure you, skepticism is warranted. In this post, I’ve organized my thoughts into these six clusters: 1: What’s the BFD?

Artificial Inteligence 140

Artificial Inteligence Saudi Arabia Algorithm Analytics 140

A Smart Bear: Startups and Marketing for Geeks

AUGUST 30, 2010

The conversation almost always turns to questions about where to find virtual assistants and how a startup can use one. As I've automated pieces of my businesses, I've noticed an interesting trend: nearly anything I try to automate is easier to outsource first, then automate down the line once the volume warrants it.

Software Review 284

Software Review Startup Technical Review Hosting 284

Rob Go

JUNE 1, 2016

We’ve been in a period of unnatural financings, both in terms of valuation and the amount of capital that has gone into companies relatively early in their life. Where I think funds do start having hard conversations around follow-ons is when they need to lead inside rounds or protect themselves in down rounds.

Term Sheet 28

Term Sheet Portfolio Valuation Warrant 28

mashable.com

OCTOBER 11, 2011

In fact, an interesting study, infographic or other data sometimes warrants its own pitch. Meeting up for lunch or drinks isn’t always the best option when it comes to keeping the conversation alive, though — oftentimes, a journalist may only want to meet up when you have a story to pitch. Money and Finance Lists.

PR 103

PR Startup Social Media Technical Review 103

www.chubbybrain.com

SEPTEMBER 28, 2011

If I tell someone I’m the mayor of a spot, I’m in an instant conversation: “What makes you the mayor?” I validated this in my conversations with companies with more market reach than us, that had tried similar products (ppv video platform), but pulled the plug because they didn’t see the demand for it. Company : IonLab.

Software Review 79

Software Review Startup Technical Review Vesting 79

Both Sides of the Table

AUGUST 21, 2010

Mirvat el Nady now has an arrest warrant in the US and is wanted by Interpol ( see here ). To this day my phone conversations with him are still heart-breaking yet I’m struck by his resolve to win back his boys. He hasn’t seen them in more than a year and she is in hiding.

Egypt 302

Egypt Boston Massachusetts Warrant 302