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500 Kobe Pre-Accelerator Demo Day >> Neil Dugal of 500 Startups

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500 Kobe Pre-Accelerator Demo Day >> Neil Dugal, 500 Startups, Corporate Counsel
Guidance on the various legal structures for venture capital investments

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500 Kobe Pre-Accelerator Demo Day >> Neil Dugal of 500 Startups

  1. 1. J-KISS Neil Dugal - Corporate Counsel Masakazu Masujima In collaboration with:
  2. 2. About Me 1,500+ Co’s Global
  3. 3. I KEEP S S K IT SIMPLE SECURITY
  4. 4. Typical Investment Round Investors Cost for Founder Cost for Investor Difficulty Level Time to Close Ignorance Level Need Lead Investor JPY 500,000+ JPY 500,000+ HIGH 3 Weeks+ High Seed Round Seed Round
  5. 5. J-KISS Investors Cost for Founder Cost for Investor Difficulty Level Time to Close Ignorance Level Anyone JPY 50,000+ JPY 50,000+ Low 2 days+ Low J-KISS Seed Round
  6. 6. How Does J-KISS Work? DEBT EQUITY Investor “Lends” Money to Company Company Sells Shares to Fundraise “Debt” Converts into Shares “Debt” Converts at a Substantial Discount
  7. 7. J-KISS Key Terms Key Terms Maturity Date Interest Rate Discount Valuation Cap Minimum Fundraise Acquisition Premium None 0% 10% - 30% JPY100,000,000 + JPY 100,000,000 + 2x or Ownership % Convertible Note - KISS Debt
  8. 8. How Discount Works - Example Company Raising Series A $20m Pre-Money Valuation $2.00 per share Investor Invested $1m 20% Discount 80% of $2.00 625,000 Series A Preferred Shares Invested $1m on J-KISS $1.60 per share
  9. 9. Valuation Cap Works - Example Company Raising Series A $20m Pre-Money Valuation $2.00 per share Investor Invested $1m $10m Cap $10m is 50% of $20m 1,000,000 Series A Preferred Shares Invested $1m on J-KISS 50% of $2.00 is $1.00 per share
  10. 10. Investor Gets Better of Valuation Cap and Discount
  11. 11. Company Raising Series A $20m Pre-Money Valuation $2.00 per share Investor Invested $1m $10,000,000 Cap Preferred Shares Series A 1,000,000 Invested $1m $1.00 per share 50% Discount $10m of $20m is 50% Company Raising Series A $20m Pre-Money Valuation $2.00 per share Investor Invested $1m 20% Discount 80% of $2.00 625,000 Series A Preferred Shares Invested $1m $1.60 per share Investor Gets Better of Valuation Cap and Discount
  12. 12. Company Raising Series A $20m Pre-Money Valuation $2.00 per share Investor Invested $1m $10,000,000 Cap Preferred Shares Series A 1,000,000 Invested $1m $1.00 per share 50% Discount $10m of $20m is 50% Company Raising Series A $20m Pre-Money Valuation $2.00 per share Investor Invested $1m 20% Discount 80% of $2.00 625,000 Series A Preferred Shares Invested $1m $1.60 per share Investor Gets Better of Valuation Cap and Discount YES
  13. 13. http://500startups.jp/j-kiss/ Masakazu Masujima In collaboration with:

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