We’ve been flattered through the years to hear that several highly acclaimed universities have used our term sheet series to teach business, law and engineering students the ins and outs of the venture financing term sheet. With the release of our book, Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist, we’ve begun to […]
Question: How many shares should I use to incorporate my company? Keep it simple. The more shares you authorize, the more you’ll have to pay in taxes (although these are not large numbers). They key is having enough shares to have the ability to grant all sorts of equity to different people who help your […]
In today’s episode of our convertible debt series, we discussion a few other terms that come into play with a transaction. Interest Rate: We believe interest rates on convertible debt should be as low as possible. This isn’t bank debt and the funders are being fairly compensated through the use of whatever type of discount […]
In today’s installment of our convertible debt series, we cover a specific case where the company is acquired before the debt converts into equity. There are a few different scenarios. The lender gets its money back plus interest. If there is no specific language addressing this situation, this is what usually ends up happening. In this […]
Question: A company I used to work for has registered to IPO. Apparently I have to wait 180 days until after the company goes public to sell. Is this typical? When do investors get to sell? What happens when everyone gets to sell at that 180 day point? Does the stock usually tank? Or is […]
We continue our convertible debt series today with a discussion about conversion mechanics. This is a very important term, but usually one that everyone can be happy with at the end if they concentrate on it. In general, debt holders have traditionally enjoyed superior control rights over companies with the ability to force nasty things […]
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