07  ThursCOLAB AIT
WHO WE ARE
TODAY•CONVERTIBLE NOTE•INVESTMENT TERM SHEET•VALUATION & LIQUIDATION PREFERENCE
CONVERTIBLE NOTES
AT A GLANCE:• IT IS A LOAN (SORT OF)• NO CURRENT VALUATION• SPEED, SIMPLICITY & COST
CONVERTIBLE NOTECONVERTIBLE        NOTE              “A document signed by              a borrower promising              ...
INVESTOR’S OPTIONTAKE HIS MONEY   CONVERT INTO SHARES     BACK
BASIC TERMS           FINANCING AMOUNT                        DISCOUNTMATURITY DATE                        INTEREST   CONV...
CONVERSION OPTIONS      AUTOMATIC CONVERSION                     SALE OF THE VOLUNTARY           COMPANYCONVERSION
NEGOTIATIONS           YOU       THE INVESTOR   FINALINTEREST   5%        10%            8%DISCOUNT   10%       30%       ...
CONVERSION OPTIONS              AUTOMATIC         VOLUNTARY    SALE              CONVERSION        CONVERSIONQUALIFIED    ...
CAP –        CASE STUDY   WITHOUT CAP                      WITH CAP• Investor puts 100K                •   Investor puts 1...
WITHOUT CAPFOUNDERS      INVESTOR
END OF CONVERTIBLE NOTE•BANKRUPTCY/CLOSING DOWN THE BUSINESS   • COMPANY PAYS BACK AMOUNT WITH INTEREST   • IF NO ASSETS ...
WHAT DOCUMENTS YOU ARE                SIGNING                   TERM SHEET                                PURCHASE AGREEME...
THANK YOU
Let’s ConnectLinkedin/in/tsakonaFacebook.com/ctsakona   christina@dimitrioulaw.Twitter.com/ctsakonawww.dimitrioulaw.com
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AIT Startup Lecture Series: Set up your Startup - C. Tsakona

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Christina Tsakona presenting at AIT's Startup Lecture Series - Steps to Success: “Set Up Your Start Up - Investment Term Sheets in Greece/ Europe/ US”.

In collaboration with AIT and CoLab@AIT, this event focused on investment term sheets. A team of attorneys analyze the basic legal terms in investment term sheets and convertible notes for startup companies that are about to or wish to raise funds from Greek, European or US investors.

Veröffentlicht in: Business
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AIT Startup Lecture Series: Set up your Startup - C. Tsakona

  1. 1. 07 ThursCOLAB AIT
  2. 2. WHO WE ARE
  3. 3. TODAY•CONVERTIBLE NOTE•INVESTMENT TERM SHEET•VALUATION & LIQUIDATION PREFERENCE
  4. 4. CONVERTIBLE NOTES
  5. 5. AT A GLANCE:• IT IS A LOAN (SORT OF)• NO CURRENT VALUATION• SPEED, SIMPLICITY & COST
  6. 6. CONVERTIBLE NOTECONVERTIBLE NOTE “A document signed by a borrower promising to repay a loan under agreed-upon terms”
  7. 7. INVESTOR’S OPTIONTAKE HIS MONEY CONVERT INTO SHARES BACK
  8. 8. BASIC TERMS FINANCING AMOUNT DISCOUNTMATURITY DATE INTEREST CONVERSION OPTIONS
  9. 9. CONVERSION OPTIONS AUTOMATIC CONVERSION SALE OF THE VOLUNTARY COMPANYCONVERSION
  10. 10. NEGOTIATIONS YOU THE INVESTOR FINALINTEREST 5% 10% 8%DISCOUNT 10% 30% 20%CAP NO YES ?MATURITY 2 YEARS 1 YEAR ?DATESALE 1X 2X 2X
  11. 11. CONVERSION OPTIONS AUTOMATIC VOLUNTARY SALE CONVERSION CONVERSIONQUALIFIED YES NO N/AFINANCINGPREFERRED YES (@discount) NO N/ASTOCKCOMMON NO YES N/ASTOCKLIQUIDATION N/A N/A YES (2X)PREFERENCEMONEY BACK NO YES & NO YES
  12. 12. CAP – CASE STUDY WITHOUT CAP WITH CAP• Investor puts 100K • Investor puts 100K• Investor estimates valuation at • Cap at 4M 4M • Round at 20M• 9 months after  Round at • Investor buys his shares 20M valuation based on the 4M valuation• Investor will have to buy his shares with 20% discount at 20M valuation
  13. 13. WITHOUT CAPFOUNDERS INVESTOR
  14. 14. END OF CONVERTIBLE NOTE•BANKRUPTCY/CLOSING DOWN THE BUSINESS • COMPANY PAYS BACK AMOUNT WITH INTEREST • IF NO ASSETS  INVESTOR GETS NOTHING•FINANCING ROUND: INVESTOR  SHARES•EXIT: INVESTOR  MONEY
  15. 15. WHAT DOCUMENTS YOU ARE SIGNING TERM SHEET PURCHASE AGREEMENTCONVERTIBLE NOTE
  16. 16. THANK YOU
  17. 17. Let’s ConnectLinkedin/in/tsakonaFacebook.com/ctsakona christina@dimitrioulaw.Twitter.com/ctsakonawww.dimitrioulaw.com

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