This is a Youtube video explanation of a cap (capitalization) table example that is available online. It may take a while get your head around the terminology and concepts involving the option pool and note conversion, and their impact on valuation. It is worth taking time to understand this if you want to see how the option pool and valuation can be played off against each other. Entrepreneurs need to understand this if negotiating with investors.
. . . → Read More: Venture Hacks Series A Cap Table, with Note Conversion and Option Pool
|
||||||
|
Similar topics at:  Convertible Notes, Fundraising, Preferred Stock, Stock Options, Valuation  option pool, post-money, pre-money This post is the first part of a three-part primer on convertible note seed financings. Part 1 will address basic questions, such as (i) what is a convertible note? (ii) why are convertible notes issued instead of shares of common or preferred stock? and (iii) what are the advantages of issuing convertible notes? Yesterday I saw a Tweet from Chris Sacca fly by that prompted me to want to write a blog post helping entrepreneurs understand why they should push back against VCs asking for “super pro-rata” rights. I’ll explain what they are and why you should avoid them if you can. A primer on “pro-rata” rights Institutional investors will always insist on pro-rata rights. This is not something to be concerned about. All it says is that the VC has the right (but not obligation) to invest his/her proportion 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:
My general opinion is that anything that makes …. I think this quote accurately captures the life-cycle of creating a simple set of documents for early stage investment. I’ve attached version 2.0 of the Series Seed Documents as well as a red-line showing the changes I’ve made from the original set. If you peruse the red-line, you will see that there are not many changes. That’s because there are not that many issues to negotiate in a simple equity financing. Of course, one could argue, that I’m just not taking comments I disagree with (or that nobody cares enough to comment), Y Combinator and Wilson Sonsini Goodrich & Rosati are happy to announce the Series AA Equity Financing Documents. Their goal is to make angel funding rounds for startups easier for both sides. These documents were originally created for YC-funded startups to use when raising angel rounds. They seem to have worked well in trial runs so far, so we’re open-sourcing them. While they may not be suitable for all situations, the goal was to make the terms fairly neutral. So while we would of course advise both parties using these documents to have their lawyers look at them, they provide a star By David Cohen: Today, just as I promised in the , we’re releasing the various legal documents that we use as a starting point for seed stage financing for our companies. We’ve now done a dozen or so of these, and we thought it would be useful to release the documents to the community. We think that they’re great model documents for an angel or seed financing in the $250k-$2M range. They represent a “light” preferred equity financing and have very simple terms that are generally “balanced” but if anything lean toward the entrepreneurs and represent a great deal of trust in them, which we thin You’ll see stories titled ‘Startup Raises $X Million in Y-round Financing.’ When the ‘Y’ in story is a large number, do not assume that the start (Note: read the comments on this blog page.) Preferred stock generally has rights senior to common stock. Startup companies typically issue common st |
||||||
|
Copyright © 2012 TheStartup411 ™ - All Rights Reserved 51 queries. 0.395 seconds. |
||||||