Theresia Gouw, Accel Partners, and Iiya Strebulaev, Stanford, offered a crash course in angel and venture capital funding at SVOD Summer 2013. The pair explained the science behind the practice, and what it takes to succeed in the crowded startup community.
this is our presentation on the starting stages to for planning to prepare to go for startup funding / small business loans / invoice loans / factoring etc etc
Are you ready to make that leap from bootstrapping to investment capital? If you're ready to accelerate the growth of your startup, check out this presentation from Kristine Di Bacco, Associate with Fenwick and West, LLP (www.fenwick.com) and Sirk Roh, COO for Early Growth Financial Services (www.earlygrowthfinancialservices.com), which covers how to take your startup to the next level of financing -- including an in-depth look at convertible promissory notes and term sheets.
Venture Capital 101 presentation on the basics of VC such as what venture capital is, and how it works. I delivered this presentation to a student group called InSITE that I belong to (mix of Columbia and NYU MBA and Law students). Enjoy!
-Brian Rothenberg
www.brianrothenberg.com
this is our presentation on the starting stages to for planning to prepare to go for startup funding / small business loans / invoice loans / factoring etc etc
Are you ready to make that leap from bootstrapping to investment capital? If you're ready to accelerate the growth of your startup, check out this presentation from Kristine Di Bacco, Associate with Fenwick and West, LLP (www.fenwick.com) and Sirk Roh, COO for Early Growth Financial Services (www.earlygrowthfinancialservices.com), which covers how to take your startup to the next level of financing -- including an in-depth look at convertible promissory notes and term sheets.
Venture Capital 101 presentation on the basics of VC such as what venture capital is, and how it works. I delivered this presentation to a student group called InSITE that I belong to (mix of Columbia and NYU MBA and Law students). Enjoy!
-Brian Rothenberg
www.brianrothenberg.com
Venture Capital Funds 101: Understanding How They Are Structured and Operated...UCICove
About UCI Applied Innovation:
UCI Applied Innovation is a dynamic, innovative central platform for the UCI campus, entrepreneurs, inventors, the business community and investors to collaborate and move UCI research from lab to market.
About the Cove @ UCI:
To accelerate collaboration by better connecting innovation partners in Orange County, UCI Applied Innovation created the Cove, a physical, state-of-the-art hub for entrepreneurs to gather and navigate the resources available both on and off campus. The Cove is headquarters for UCI Applied Innovation, as well as houses several ecosystem partners including incubators, accelerators, angel investors, venture capitalists, mentors and legal experts.
Follow us on social media:
Facebook: @UCICove
Twitter: @UCICove
Instagram: @UCICove
LinkedIn: @UCIAppliedInnovation
For more information:
cove@uci.edu
http://innovation.uci.edu/
Corporate Venture Capital best practices from interviews and researchMark S. Brooks
Summary research from interviews with 13 CVCs to identify best practices in creating a corporate venture capital (CVC) unit or a corporate accelerator.
Key takeaways include having clear objectives, clear processes and structure, easy to measure metrics, having patience and board or executive support, and making contributions to select startups that go well beyond capital.
I hope you find it useful. Feel free to distribute further to others who might find value in it.
You can reach me at https://www.linkedin.com/in/markbrooks
Venture Financings 101 (SAFEs, Convertible Notes, Seed and Series A) | Bardia...UCICove
An introductory crash course on the typical legal and business terms involved with, and negotiated in, venture capital fundraising including SAFE, Convertible Note, Series Seed and Series A financings.
Structuring and Financing a Partner BuyoutGreg Tobben
Buying Out a Business Partner or Shareholder: Structuring and Financing the Deal
When an entrepreneur starts a new business, planning for a buyout of a business partner years in the future is rarely a top priority- but maybe it should be.
As businesses grow and evolve, so too do ownership or shareholder groups. The same partners or investors who took a company from startup to $20 million in revenues aren’t necessarily the right people to grow the company from $20 to $50 million, or $50 to $150 million, and so on.
Layer in retirements, partnership disputes and absentee or non-strategic owners receiving generous compensation, and making changes in ownership becomes increasingly more important (and costly) as the business grows.
On the next few pages, we’ll discuss:
1. When a Partner Buyout is a Solution
2. Valuing the Business
3. Structuring a Partner Buyout
4. Financing a Partner Buyout
5. Questions a Business Owner Should Ask When Raising Capital
6. Using an Investment Banker to Raise Capital for the Buyout
About Access Capital Partners:
Access Capital Partners is a middle market investment bank that provides strategic advisory services, raises capital for companies (growth, refinancing, restructuring, acquisitions, partner buyouts, management buyouts, leveraged buyouts), and helps business owners sell or recapitalization their companies.
We are shareholder centric and have deep experience in the middle market. With over 100 transactions representing over $8 billion in volume, business owners leverage our experience as they navigate through inflection points and ultimately achieve personal liquidity.
This presentation gives overview of how to assess the capital requirements, how to source the capital, how manage the capital, when and how to create debt, what are the parameters to be looked into while raise debt finance etc.
Startup Basics: Legal, Business, and Financing StrategiesRoger Royse
Launching a startup - or starting a business - is challenging and is fraught with pitfalls.
Roger Royse, the founder of Royse Law Firm, will discus the basics of building a successful business and how to what mistakes to avoid. Roger will discuss:
1) How should entrepreneurs structure their business?
2) How should founders divide equity?
3) What’s the difference between a contractor and an employee?
4) How does a startup get funded?
5) What is an ICO?
6) How does an entrepreneur successfully negotiate with a VC?
7) How viable is crowdfunding in 2019?
8) How should entrepreneurs protect their intellectual property?
and more!
Incorporation Stage Issues and Seed Financings Overview w/ Kristine Di BaccoStanford Venture Studio
Which legal entity is best for your startup company? How should you deal with founder stock and other incorporation issues? How should you structure a seed investment? Kristine Di Bacco, Partner at Fenwick & West, will help you answer these important questions, and others, as you think about the process of incorporating and raising seed financing.
OurCrowd's Portfolio RESERVE: Making investing easier by putting the investme...OurCrowd
Join Zack Miller and Danna Mann -- executives at OurCrowd, the leading crowdfunding platform for Israeli startups -- for an introduction to OurCrowd's new product, Portfolio RESERVE. Interested investors can use Portfolio RESERVE to make a one-time investment with minimal paperwork to guarantee you never miss an opportunity.
Join us to learn about the Portfolio RESERVE:
You decide how much you'd like to invest in OurCrowd companies
Get automated allocation to future investment opportunities
One time funding, limited paperwork
You retain ability to opt-out of any deal
You'll also have an opportunity to ask questions about our process and startup investing in general.
Cashing in - how to make money investing in startupsOurCrowd
Join Zack Miller, Head of the Investor Community at OurCrowd, and David Stark, Investment Associate at OurCrowd, as they discuss the investment strategies necessary to build and maintain a successful startup portfolio. By nature, startup investments are a high risk/high reward asset class. Knowledge, therefore, is key in maximizing your profit potential when investing in startups.
Join us to learn:
The startup math that investors use to get rich
Understand how companies' valuations change over time and what that means for your investments</li>
Learn how OurCrowd and other startup investors see an eventual return on their investment and how those returns are calculated
This webinar is appropriate for both investors and entrepreneurs alike.
Venture Capital Funds 101: Understanding How They Are Structured and Operated...UCICove
About UCI Applied Innovation:
UCI Applied Innovation is a dynamic, innovative central platform for the UCI campus, entrepreneurs, inventors, the business community and investors to collaborate and move UCI research from lab to market.
About the Cove @ UCI:
To accelerate collaboration by better connecting innovation partners in Orange County, UCI Applied Innovation created the Cove, a physical, state-of-the-art hub for entrepreneurs to gather and navigate the resources available both on and off campus. The Cove is headquarters for UCI Applied Innovation, as well as houses several ecosystem partners including incubators, accelerators, angel investors, venture capitalists, mentors and legal experts.
Follow us on social media:
Facebook: @UCICove
Twitter: @UCICove
Instagram: @UCICove
LinkedIn: @UCIAppliedInnovation
For more information:
cove@uci.edu
http://innovation.uci.edu/
Corporate Venture Capital best practices from interviews and researchMark S. Brooks
Summary research from interviews with 13 CVCs to identify best practices in creating a corporate venture capital (CVC) unit or a corporate accelerator.
Key takeaways include having clear objectives, clear processes and structure, easy to measure metrics, having patience and board or executive support, and making contributions to select startups that go well beyond capital.
I hope you find it useful. Feel free to distribute further to others who might find value in it.
You can reach me at https://www.linkedin.com/in/markbrooks
Venture Financings 101 (SAFEs, Convertible Notes, Seed and Series A) | Bardia...UCICove
An introductory crash course on the typical legal and business terms involved with, and negotiated in, venture capital fundraising including SAFE, Convertible Note, Series Seed and Series A financings.
Structuring and Financing a Partner BuyoutGreg Tobben
Buying Out a Business Partner or Shareholder: Structuring and Financing the Deal
When an entrepreneur starts a new business, planning for a buyout of a business partner years in the future is rarely a top priority- but maybe it should be.
As businesses grow and evolve, so too do ownership or shareholder groups. The same partners or investors who took a company from startup to $20 million in revenues aren’t necessarily the right people to grow the company from $20 to $50 million, or $50 to $150 million, and so on.
Layer in retirements, partnership disputes and absentee or non-strategic owners receiving generous compensation, and making changes in ownership becomes increasingly more important (and costly) as the business grows.
On the next few pages, we’ll discuss:
1. When a Partner Buyout is a Solution
2. Valuing the Business
3. Structuring a Partner Buyout
4. Financing a Partner Buyout
5. Questions a Business Owner Should Ask When Raising Capital
6. Using an Investment Banker to Raise Capital for the Buyout
About Access Capital Partners:
Access Capital Partners is a middle market investment bank that provides strategic advisory services, raises capital for companies (growth, refinancing, restructuring, acquisitions, partner buyouts, management buyouts, leveraged buyouts), and helps business owners sell or recapitalization their companies.
We are shareholder centric and have deep experience in the middle market. With over 100 transactions representing over $8 billion in volume, business owners leverage our experience as they navigate through inflection points and ultimately achieve personal liquidity.
This presentation gives overview of how to assess the capital requirements, how to source the capital, how manage the capital, when and how to create debt, what are the parameters to be looked into while raise debt finance etc.
Startup Basics: Legal, Business, and Financing StrategiesRoger Royse
Launching a startup - or starting a business - is challenging and is fraught with pitfalls.
Roger Royse, the founder of Royse Law Firm, will discus the basics of building a successful business and how to what mistakes to avoid. Roger will discuss:
1) How should entrepreneurs structure their business?
2) How should founders divide equity?
3) What’s the difference between a contractor and an employee?
4) How does a startup get funded?
5) What is an ICO?
6) How does an entrepreneur successfully negotiate with a VC?
7) How viable is crowdfunding in 2019?
8) How should entrepreneurs protect their intellectual property?
and more!
Incorporation Stage Issues and Seed Financings Overview w/ Kristine Di BaccoStanford Venture Studio
Which legal entity is best for your startup company? How should you deal with founder stock and other incorporation issues? How should you structure a seed investment? Kristine Di Bacco, Partner at Fenwick & West, will help you answer these important questions, and others, as you think about the process of incorporating and raising seed financing.
OurCrowd's Portfolio RESERVE: Making investing easier by putting the investme...OurCrowd
Join Zack Miller and Danna Mann -- executives at OurCrowd, the leading crowdfunding platform for Israeli startups -- for an introduction to OurCrowd's new product, Portfolio RESERVE. Interested investors can use Portfolio RESERVE to make a one-time investment with minimal paperwork to guarantee you never miss an opportunity.
Join us to learn about the Portfolio RESERVE:
You decide how much you'd like to invest in OurCrowd companies
Get automated allocation to future investment opportunities
One time funding, limited paperwork
You retain ability to opt-out of any deal
You'll also have an opportunity to ask questions about our process and startup investing in general.
Cashing in - how to make money investing in startupsOurCrowd
Join Zack Miller, Head of the Investor Community at OurCrowd, and David Stark, Investment Associate at OurCrowd, as they discuss the investment strategies necessary to build and maintain a successful startup portfolio. By nature, startup investments are a high risk/high reward asset class. Knowledge, therefore, is key in maximizing your profit potential when investing in startups.
Join us to learn:
The startup math that investors use to get rich
Understand how companies' valuations change over time and what that means for your investments</li>
Learn how OurCrowd and other startup investors see an eventual return on their investment and how those returns are calculated
This webinar is appropriate for both investors and entrepreneurs alike.
How to Become a Thought Leader in Your NicheLeslie Samuel
Are bloggers thought leaders? Here are some tips on how you can become one. Provide great value, put awesome content out there on a regular basis, and help others.
This presentation was given to a group of Founders, CEO's and praticipants in the Financing of their growth companies at the Digital Media Zone at Ryerson University in Toronto today.
Ask the Experts: Establishing your BusinessWelch LLP
Every business owner wants to be successful but where do you start? Review the slides that our experts presented, covering: the steps of building your business from the ground up; advice on laying the foundation for a successful future; financing using traditional and/or non-traditional funding, & the basics of ownership structures & co-ownership.
To view our video coverage of this event, open this link:
http://www.welchllp.com/resource-centre/videos/events/
Startup Seed Funding: From Bootstrapping to Equity FinancingDavid Ehrenberg
Are you ready to make the leap from bootstrapping to investment capital? If so browse through this static deck to find the following topics:
- Preparing your company for investment capital
- Current deal flow
- Convertible notes vs series seed preferred
- Valuation and purchase terms
- Term sheet negotiation
- And more!
Presentation on the investment basics for Startups. Essentials of startup investments, focusing on funding cycles, risk management and investor structures.
Corporate Finance for Early & Growth Stage CompaniesBoast Capital
Running a business requires capital, but how do you determine which funding option is the best fit?
Gain the knowledge and tools you need to make decisions regarding financing sources and avoid common pitfalls. Specifically you will learn:
-Equity vs Debt
-Friends & Family vs Angels vs VCs/Negotiating the Term Sheet
-Bank Debt
-Mezzanine / Bridge Financing
-R&D tax and government funding
In the sixth installment of The Real Deal, “Proxy Season Recap – Trends and Lessons from 2014,” Erik Lundgren and Erin Stone looked back at key trends from the 2014 proxy season and discussed lessons learned.
Early Stage Venture Financings: Terms, Negotiations, and Closingideatoipo
Getting your first round of financing closed is a critical milestone for every start up.
The speakers will review how to find the right investor, how to negotiate the key terms with a view to future rounds, and how to prepare for the due diligence process to get to a quick closing.
Slides and notes from the MaRS Startup Investor Workshop. The event took place on September 30th, 2016 and featured Mark Skapinker and Sophie Forest from Brightspark, David Shore from OurCrowd.
Similar to A crash course in angel and venture capital funding at SVOD Summer 2013 (20)
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
BYD SWOT Analysis and In-Depth Insights 2024.pptxmikemetalprod
Indepth analysis of the BYD 2024
BYD (Build Your Dreams) is a Chinese automaker and battery manufacturer that has snowballed over the past two decades to become a significant player in electric vehicles and global clean energy technology.
This SWOT analysis examines BYD's strengths, weaknesses, opportunities, and threats as it competes in the fast-changing automotive and energy storage industries.
Founded in 1995 and headquartered in Shenzhen, BYD started as a battery company before expanding into automobiles in the early 2000s.
Initially manufacturing gasoline-powered vehicles, BYD focused on plug-in hybrid and fully electric vehicles, leveraging its expertise in battery technology.
Today, BYD is the world’s largest electric vehicle manufacturer, delivering over 1.2 million electric cars globally. The company also produces electric buses, trucks, forklifts, and rail transit.
On the energy side, BYD is a major supplier of rechargeable batteries for cell phones, laptops, electric vehicles, and energy storage systems.
Yes of course, you can easily start mining pi network coin today and sell to legit pi vendors in the United States.
Here the telegram contact of my personal vendor.
@Pi_vendor_247
#pi network #pi coins #legit #passive income
#US
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
Lecture slide titled Fraud Risk Mitigation, Webinar Lecture Delivered at the Society for West African Internal Audit Practitioners (SWAIAP) on Wednesday, November 8, 2023.
Abhay Bhutada Leads Poonawalla Fincorp To Record Low NPA And Unprecedented Gr...Vighnesh Shashtri
Under the leadership of Abhay Bhutada, Poonawalla Fincorp has achieved record-low Non-Performing Assets (NPA) and witnessed unprecedented growth. Bhutada's strategic vision and effective management have significantly enhanced the company's financial health, showcasing a robust performance in the financial sector. This achievement underscores the company's resilience and ability to thrive in a competitive market, setting a new benchmark for operational excellence in the industry.
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
where can I find a legit pi merchant onlineDOT TECH
Yes. This is very easy what you need is a recommendation from someone who has successfully traded pi coins before with a merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi network coins and resell them to Investors looking forward to hold thousands of pi coins before the open mainnet.
I will leave the telegram contact of my personal pi merchant to trade with
@Pi_vendor_247
A crash course in angel and venture capital funding at SVOD Summer 2013
1. SVOD 2013
Funding Your Start-up
1
Funding Your Start-Up:
Successful Contracting
Theresia Gouw
Accel Partners
Ilya Strebulaev
Stanford GSB
2. SVOD 2013
Funding Your Start-up
The Venture Capital Cycle:
IPOM&A
Failure
VC
Investment
Angels
Self-funding by founders
“Family and friends”
round
3. SVOD 2013
Funding Your Start-up
• Division of future payoffs
• Learning
–A/VC about E
–E about A/VC
• Resolving future problems and agency conflicts
The purpose of contracting between E and A/VC
p. 3
4. SVOD 2013
Funding Your Start-up
• Active monitoring
• Formal monthly financial reports
• Staging of investments
• Major reviews of progress/milestones
• Stock grants/stock options
• Vesting of the stock options over a multiyear period
• Dilution of E’s stake in subsequent rounds if the firm does not perform
Resolving future problems
p. 4
5. SVOD 2013
Funding Your Start-up
• Example: E owns 7.5M common shares
• VC offers $10M of Series A convertible preferred for 25% of the
company
• Liquidation preference:
–Series A Preferred is paid first one times the original purchase price
–The balance of any proceeds is distributed to Common Stock
• Optional conversion:
–Series A Preferred converts 1:1 to Common Stock at any time at option of
holder
Most commonly used VC contract:
Convertible preferred stock
p. 5
6. SVOD 2013
Funding Your Start-up
Convert or do not convert? VC payoff
p. 6
No Conversion Conversion
Conversion Point
0
5
10
15
20
25
0 10 20 30 40 50 60 70 80
ConvertiblePreferredStockPayoff
($Million)
Exit Payoff/Liquidation Payoff ($Million)
Common Stock
(Converted)
Preferred Stock
(Unconverted)
8. SVOD 2013
Funding Your Start-up
• Seniority over Common Stocks
–Downside protection
• Incentives
–E get more in better states of the world
• Signaling
–More optimistic E likely to take the offer
• Preventing “Take the money and run” scenario
–E do not have incentives to sell too early
• Tax reasons
Why VCs prefer convertible preferred stocks
p. 8
9. SVOD 2013
Funding Your Start-up
• As minority shareholders, VCs need protection
• Anti-dilution provisions
• Corporate governance
• Vesting of founder and employee stocks
• Dividends restrictions
• Redemption rights
Additional contract features that protect VCs
p. 9
10. SVOD 2013
Funding Your Start-up
• Voting rights
–Voting rights vs. cash flow rights
–Voting with Common Stock shares on an as-converted basis
–Increase or decrease of authorized Common Stock shares shall be
approved by majority of Preferred and Common, voting together
–Majority of Series A Preferred should consent to:
• Liquidation/exit
• Amending By-Laws
• Issuing any new securities
• Paying any dividends
• Changing the size of the Board of Directors
Corporate governance
p. 10
11. SVOD 2013
Funding Your Start-up
• Board composition
–The Board shall consist of five members
–Series A Preferred elect two Board members
–Founders or their representative elect two Board members
–One independent director, who is mutually acceptable to VC and E
–Each board committee will have at least one Series A Preferred nominee
Corporate governance
p. 11
12. SVOD 2013
Funding Your Start-up
• Vesting: Shares or options are earned over time
• Step vesting:
–Typically occurs over three to five years at annual/quarterly/monthly
increments
• Cliff vesting:
–Vesting occurs at one time
• Example:
–30% after one year
–Remaining 70% vesting quarterly over next four years
Vesting and employee restrictions
p. 12
13. SVOD 2013
Funding Your Start-up
• Vesting is needed to align interests between Es and investors
• Ex ante vs. ex post
–Getting a better vesting contract for the founders/first employees (e.g.
single trigger) seems better for Es
–Down the line, other key employees would prefer the same contract
• Can affect acquirer’s valuation / exit outcome
Economics of vesting
p. 13
14. SVOD 2013
Funding Your Start-up
• Restrictions on founders and investors selling their shares
–Transfer restrictions: preventing sales of founders’ stock without
permission of investors
–Tag-along rights: the right of investors to participate in any of such sales
–Right of first refusal: investors can buy first at the price offered to other
parties
–Right of first offer: Investors will be first to be offered shares
• Non-competition, non-solicitation, and non-disclosure for executive
officers
Vesting and employee restrictions
p. 14
15. SVOD 2013
Funding Your Start-up
• Convertible notes without cap
–Angel’s stake in the company is a constant (in good outcomes)
–The higher the pre-Series A valuation, the less the angel investor owns
post-Series A round
–Despite the company doing better
–Misalignment of interests between angels and entrepreneurs
Contracting with Angels
The World of Convertible Notes
p. 15
16. SVOD 2013
Funding Your Start-up
• Cap: Main provision invented to limit the dilution of note holders
–They now can benefit from higher valuation in Series A round
• Holders of capped convertible note convert at the lower of:
–The (discounted) Series-A price or
–The capped price
• The cap effectively makes seed round (partially) a valuation round
Convertible notes: Cap
p. 16
17. SVOD 2013
Funding Your Start-up
Angel’s ownership value after a $10M Series A round
p. 17
0
5
10
15
0 5.00 10.00 15.00 20.00 25.00 30.00 35.00
Angel'sOwnershipValueAfterSeriesA
($Million)
Pre-Money Valuation
Cap of $5 Million
Cap of $10 Million
Cap of $20 Million
No Cap
Editor's Notes
Intro remarks: what this course is about, for whom this course is intended, discussion of the syllabus, and so on. [Separate file] This course is about how to finance high-potential innovative companies, both for financiers and entrepreneurs.What this course is NOT about. We will not cover: (1) How to prepare a business plan; (2) How to improve your presentation style; (3) only what currently is happening in the VC world (we will talk about it, of course, but the emphasis is on generic mechanisms that will help you when the situation changes).Course logistics, exams [Separate file]Talk about difficulties for this course: (1) so many information, but most irrelevant/weird/confusing; at the same time a lot of useful stuff nobody talks about. Our goal is to put things right and straight. My goal is tell you generic stuff, general rules, that will help you understand issues, ask the right questions, seel answers in the right place, and make efficient decisions.(2) Not a lot of data, especially about angels but also about VCs. It is a secretive industry, no regulation, but frankly just nobody cared to collect data. [THIS IS WHAT I AM DOING – anybody wants to help, let me know]ILYA: Note that the mic synced in and out a bit depending on your head angle. If you were facing left, the sound was much weaker.
Cold call: Discuss conceptually why VC staged financing works this way: why not give all the money right away and let the start-up exercise the options?Answer: real option, agency costs, information asymmetry, limited resources! [more on this throughout the course]Some firms skip some stagesWILL: This looks great. I like both your versions (perhaps the second one a tiny bit better, can we experiment with the following: (1) I’d like to show graphically the “funnel” – most companies do not get to the next stage; (2) the Exit – is it possible to create three “curvy” arrows [as typically shown on military history maps] of different size: Failure is the thickest, then M&A, and then IPOs an attempt to create a military-chart style diagram. I’m not happy with the result, Excel doesn’t have enough control to create this type of chart.
Term sheets are not binding, they will become binding in the investment agreementTerm sheets are exploratory, negotiating stageVC/E partnership is often viewed as Marriage – establishing long-term relationship. Term sheet is kind of a marriage agreement. To make future negotiations as predictable as possible. And to learn about each other because when you court before a marriage, you’d better find as much as possible about your prospective partner. [A story about an Indian VC: he always takes prospective entrepreneurs on a ride in his car. In India roads are bad so going from A to B in town will always take at least 2 hours but he takes specific routs to get into traffic and so what would be a ten minute ride in the Bay Area becomes a 5-7 hour journey. He told me there is nothing better to finding about a person than sit with him in one car for 5 hours]Learning: how E reacts to terms. Too tough/too mild (it is used as an indicator of future interactions with VCs and other parties). E.g., if E is naïve/foolish, he will behave in a similarway to suppliers/customers.Important: it is not a contract about current environment, it should take into account future actions and incentives of future players such as future employees and future financiers.Ex ante vs. ex post: renegotiation. Those features of the contract which are easy to renegotiate in the future are less important. [IMPORTANT: this point deserves a separate slide somewhere else]
Important to resolve as many conflicts as possible ex-ante, this is the idea of the contract/term sheet.Important to emphasize is how investors actually do this:Active monitoring: e.g. informal visits; lead VCs typically visit at least once a month, try to get more information, prevent misbehaviorFormal reports: beautiful story of an Indian VC. He invests in rural entrepreneurs in India. He invested in two doctors who wanted to build rural hospitals and provide cheap healthcare. The Vc wants to make money. He gave them funds, a couple of months later he visited them in a new hospital. He saw several doctors/nurses around, equipment they bought and they led him around to show patients, treatments, and so on. He asked them then for a monthly financial report, how they spent money, and for business plan. They responded why he needed all this, for he could see that patients were happy. That was their measurement of success. Their metric. He is a smart guy so he did not say anything and left. In a couple of months there was a time for him giving them more money (staging!) and they reached a required milestone (built and started operating a hospital). He did not send them money. They phoned and faxed and then came to him. He old them: why do you need money, your patients are happy. This story has a happy ending. These doctors understood and became financially savvy. They now operate more than 20 hospitals and this is one of his most successful investments.Staging: E is on a tight leash because it is obvious that it is not enough money raised initially to get this company successful. Staging gives also an option of not to invest if the milestones are not reached. “If you see a fork on the road, take it.”Stock grants: aligns incentivesVesing: founders can’t just leaveTBD LATER:Look at Kaplan and Stromberg (2002): types of risks – can be incorporatedLook at Hsu (2002): the price to be associated with top VCs (15% discount for top VC firms) – not here really, but when we discuss matching processLook at Hochberg (2002): corporate governance after IPO for VC-backed vs. non-VC backed firms. Somewhere else, not in this lecture.ILYA: Appx 20 minutes
Non-convertible preferred stock is virtually the same as debt (junior to debt) and differs mostly in tax treatment and seniority.Liquidation preference and optional conversion are crucial. Liquidation preference offers protection of VCs in the bad state or not very good state. Optional Conversion offers protection of the upside in the good state.RED here and later means that specific numbers are points of negotiations
Payoff for the Series A preferred if it does not convert and if it does.Here is common equity. Now this is preferred stock, which is not convertible. By the way, what does it look like [debt; brief deviation on differences between preferred stock and debt]Finally, here is total payoff. The holders, i.e. VCs, decide on conversion, so they basically choose for each value the maximum between two payoffs. So this is how the payoff structure looks like. Need to emphasize that it is the VCs not E that decide on conversionShow clearly where the liquidation preference bites and where optional conversion bites.ILYA2: QUESTION: (Colin?) Convertible notes?QUESTION: (Jaun?) Clarifying question on when to convert.NOTE: Is this chart clear? I believe Jaun may have been confused about what the common stock value is – IE: it isn’t the E’s common stock value, it is the VC’s common stock value if the VC converts.QUESTION: What is used today?T: E payoff is Exit payoff – E payoffNOTE: We should think about how to present this term sheet section faster.WILL: Slide 21 on Convert/do not convert. I added VC payoff in the title – I think most of them think from the E position and this may cause/have caused confusion. Not really sure what else to add/change – because E do not decide, replicating this chart for E may be even more confusing. May be, we should show E payoff for CPS vs CS and PS using green shaded stuff – i.e. how the payoff changes when VC gets a different security and how conversion affects E’s payoff? Let’s experiment here. Right now, we have slide 23 which is not very telling [I actually quickly went to discussing 24 and 25 exactly because I thought it does not add anything new, but in doing so we omit E payoff’s discussion. What do you think?
Let’s stop here and think why this security is inherently better in the VC setup than common equity. Note that this diagram of course does not saying anything about voting rights, only about cash flow rights. Basically, when the outcome is bad, Vcs get back all the value and E gets nothing. Is a good idea? Not always, but in the innovative high-potential setup it seems a good idea. It provides more incentives to E to make sure the project works out.What would be an example when this security would not be that great. Consider a large company, say IBM, where you give this security to employees. Any employee is unlikely to benefit much from a great idea because he has a very small amount of securities even if the great event will make IBM worth ten times over. But what if IBM goes bust? He will lose everything still. So in large companies this incentive structure does not work well. Why in the VC world it works? Because E still are large holders of their companies and they benefit greatly from the upside. So if their company becomes next IBM, they will benefit greatly. Related, it is not common for VCs to take a majority stake in a company in the first round. Why? For exactly the same reason. You do not want E to feel herself like an IBM employee.What are the trade-offs here. Between incentives and risk-taking.ILYA2: Question: From the E’s point of view, is the amount of stock negotiable?ILYA2: Question: The value of the VC’s share is higher due to liquidation preference. How is that priced?ILYA2: Question: (Cathy?) What would the term sheet actually say? Conversion at some dollar value? T: It is usually stated as dollars per share or simply “option to convert”.
Incentives: what is important here is that E get more in the good state of the world than in the bad state of the world. It is RELATIVE compensation of E that matters.Tax reasons – in short, employees are compensated with stock options, issuing VC CP helps employees understate the value of these options which helps for tax reasons. (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=301225 has a discussion of this)ILYA2: Minor point, but you referred to E as “it” here, that sounds very grating in English. I’m not sure if a he = VC, she = E style gender assignment would help with clarity in some of these explanations or just sound forced, but it might be worth thinking about. [Ilya’s comment: important; “it” was stupid of course; need to think about. Ask others]
Majority can be 50% or supermajority (60%, 70%, etc)
Majority can be 50% or supermajority (60%, 70%, etc)
The idea of vesting: if the employees leave now, they will get less, so it Is more attractive for them to stay onFrom the website of a law firm: “if the founder leaves the employment of the company before this time period has elapsed, the founder forfeits the unvested portion of the stock.”In the example: 30% is cliff vesting; the rest is step vesting.People talk a lot about difference between cliff and step vesting, not that important. What is important is cumulative vesting over certain period of time. TBD: more on pros and contras of various vesting contractsFUTURE CHART: DO A CHART OF THE EXAMPLE OF CLIFF VESTING[Reality checkpoint: in reality, cliff contracts are often accelerated. For example, in the case of a one-year cliff, if an employee laid off/fired in month 6-12, vesting can be or likely will be accelerated; the same with founders: if for example negotiations ensure to relieve the founder of CEO’s role, etc., then vesting schedule may be negotiated and accelerated]Important: this is just a term sheet. In addition, the founders and employees will get an employment agreement that will specify the terms of their employment precisely.[SEPARATE SLIDE] Acquisitions and so on: vesting is immediately accelerated
All of this assumes that the pre-series A valuation is above angel’s investment.Cite again Sunrun’s case: angels did not like because they were thinking next round will be $5M, it was $25M, they were diluted.Here is example from Ron Conway on the same issue: “If I invest in a company I open my Rolodex for them. I help them with business development introductions. I introduce employees. I give them credibility in the fund raising process. Let’s say the company was worth $1 million when I met them and I’ve helped them with both my Rolodex and my cash and they can now raise a round of venture capital at a valuation of $6 million. I would be hurting my own interests. A $500,000 investment at a 30% discount to a $6 million round is still priced and more than $4 million and is certainly worth much less than my investing at a $1 million pre-money where I could own 33% of the company.”http://www.bothsidesofthetable.com/2009/07/19/raising-angel-money/Why do angels agree to invest under these terms is very unclear to me. Is it because of lack of knowledge??? Even if the market conditions are such that there is a lot of hype and there is huge supply of angel money, I don’t see how this could be profitable. I suggest this is the lack of knowledge.ILYA: You said that VC’s may want a higher valuation to better align E’s incentives, but this is not correct.
I’ve seen other examples. For example, I have seen an example where the discount also applies to the capped price. Using the methodology we develop today, you can price any combination and variation, but read the language carefully both as BA and as E. caveats and foundations for future problems lurk everywhere.