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The Truth About Convertible Debt at Startups and The Hidden Terms You Didn’t Understand

Both Sides of the Table

Because convertible debt deals often have both a ‘full ratchet’ and often have ‘multiple liquidation preferences’ “ Yup. The key for entrepreneurs to understand is whether it’s a “full ratchet” or a “weighted average ratchet.” Convertible notes have full ratchets.

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Praying to the God of Valuation

Both Sides of the Table

If they are private we still have fig leaves that cover us because some rounds might raise debt vs. equity or might fund with terms like multiple liquidation preferences or full-ratchets or convertible notes with caps. But this is still all about valuations and none of it is any fun anymore.

Valuation 466
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In Q4 2022, founders face tough choices

VC Cafe

Two weeks ago in San Francisco, a conversation with tech lawyers from the US and Europe was a confirmation of what I read in the news. Israeli tech review Q3 2022, IVC Online and Bank Leumi. Israeli Tech Review Q3 2022 (Source: IVC Online and Bank Leumi ). It’s an investors market. Investors are calling the shots.

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Down Rounds: Deal With Reality

Feld Thoughts

I like the quote she pulled out of me in our conversation. I don’t respond to many interview requests these days, but I’ll always talk to her. She has a good article today in TechCrunch titled Embrace the down round (it’s going to be okay, maybe). and a bunch of other things.

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One Simple Paragraph Every Entrepreneur Should Add to Their Convertible Notes

Both Sides of the Table

This is called a “full ratchet,” which is also historically a term that VCs would be crucified for trying to get away with but I’ll avoid talking about that in this post.]. If you raise at a lower price they will own more than 9%.

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Bad Notes on Venture Capital

Both Sides of the Table

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.

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Abandoned Cart Email Offers: What We Learned from 1,000 Ecommerce Brands

ConversionXL

And discounts and offers within those emails are proven tactics for increasing conversions. If including an offer reliably increases conversions, you can always tailor your offer to fit your profit margin and maximize ROI. Sending only one offer email likely misses some conversion opportunities—though that’s what most brands do.

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