Category Archives

Startup Financing Is Not A DIY Project

There are projects that are easy enough for a smart startup founder to take on, and then there are projects that are simply too complex, and which require the help of an experienced lawyer. Financings, such as a seed round or convertible note financing, are definitely not DIY projects. Several Read More

If I Lie To My Lawyer, Will It Save Me Money?

Not a chance. Even so, I occasionally find a client or prospect holding back important information, presumably because they think it will complicate the project and cost them more money. But that’s exactly why it should cost more money – because it makes things more complicated. Let’s see it in Read More

EQUITY CROWDFUNDING 2.0

On October 30, the SEC took another shot at legalizing equity crowdfunding, by passing final regulations that are much more streamlined and simpler than the original regulations. The new regulations will take effect sometime next spring or summer, at the earliest. Under the new regulations, a company can raise a Read More

Choose Your Investors Wisely

A recent episode of Shark Tank demonstrates why startup founders have to be careful with who they choose to invest in their companies. I say “recent,” but I don’t watch the show every week, so for all I know, what I saw was the formula for every episode. On this Read More

The Friends & Family Round

Prior to doing a seed round or a full venture capital financing, startups frequently need to do a “friends and family” round of financing. This money is often essential to carry startups through to the point where an angel investor would be interested, especially in the regions where angels will Read More

SAFE – A New Financing Tool for Startups

If you follow startups, you’ve probably heard of convertible notes and Series A financings, but the newest item is the SAFE – the Simple Agreement for Future Equity. SAFE is a seed-stage financing tool that provides a lower-cost, speedier alternative to convertible debt financings. SAFE was devised by Y-Combinator partner Read More

AN INTRO TO THE “ACCREDITED INVESTOR”

Startups and other companies seeking investment through private securities offerings will quickly have to master the concept of the “accredited investor.” The underlying idea is that accredited investors have either specialized knowledge or a level of wealth that gives them greater protection in making more speculative investments. By selling only Read More

Why You Need Your Own Lawyer

Someone asked me a really good question last week – he asked me if it’s a good idea for a startup founder to use the same lawyer as the angel investor or venture capital firm that is about to invest in his company. It is an excellent question, and I Read More

Anatomy of a Term Sheet 9 — Pay-To-Play

Welcome back to our Anatomy of a Term Sheet series. We are taking the model Series A term sheet from the NVCA, and analyzing the various terms in depth. The goal is to give startup founders a solid understanding of the complex provisions of the term sheet. We have had 8 Read More

Anatomy of a Term Sheet 8 — Anti-Dilution Protection

Welcome back to our Anatomy of a Term Sheet series. We are taking the model Series A term sheet from the NVCA, and analyzing the various terms in depth. The goal is to give startup founders a solid understanding of the complex provisions of the term sheet. We have had 7 Read More