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SeedLegals getting investment ready and valuing the company

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Presentation by Antony Rose - CEO an founder of Seedlegals making raising investment easier, cheaper and more flexible. This was part of the CBD and Cannabis Start Up Accelerator

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SeedLegals getting investment ready and valuing the company

  1. 1. Getting investment ready and getting funded
  2. 2. Founder agreements Share vesting Protecting your IP
  3. 3. Giving Equity To Your Team Create new shares, don’t transfer your own, and do it well before the first funding round Sign agreements with appropriate vesting Work out proportions you are happy with, based on commitment, sweat to date, full/part time
  4. 4. Valuating the Company A few methods: - Decide how much you want to raise - How much equity to give away - Compare to similar companies
  5. 5. Vaidation Equity is the most valuable asset you own Lean principles apply to fundraising, the old roadmap isn’t a good one Build - Measure - Learn - Raise Raising too early is a massive mistake
  6. 6. Valuation Do’s Always talk about pre-money valuation Prepare 2 versions of your pitch deck Model equity dilution before talking to investors
  7. 7. Valuation Don’ts Don’t mention raising amount, valuation and % equity before modelling the exact figures
  8. 8. Post Funding After a funding round, shares have a value Giving equity to people then incurs tax liability Enter the options pool, created as part of your funding round For employees, you should set up an EMI scheme
  9. 9. How much equity for my advisor? Default is zero, talk is cheap but execution is expensive Model it as regards to the funding round value, don’t pick a random % Again, if before first round, create new shares, if not it’s an “unapproved option”
  10. 10. The Advisor Stats General advisors mostly just get equity tech advisors most likely to get cash too as well as the most equity Valuation less than £1.5m mean equity is 2.2%, greater than is 1.6%, though skewed higher Those that work more than two days a month get double the equity
  11. 11. EMI Share Option Scheme Options can be granted without any income tax or NI liabilities Employee only pays income tax on exercise (normally on exit) between excise price and market valuation at the time. Founders get Entrepreneurs Relief (10% CGT)
  12. 12. 7000+ Startups & investors use SeedLegals today 3500 Early stage founders 2500 Investors, funds & accelerators
  13. 13. “SeedLegals not only highlights best practices in the industry, but also greatly reduces costs and time to completion while increasing communication for founders” Carlos Eduardo Espinal, Partner at Seedcamp

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