Archive for May, 2008

Dilution is Your Friend

Thursday, May 29th, 2008

One the most common discussions we have with entrepreneurs relates to valuation of their A round. Series A stock is quite difficult to value - the company typically has no revenues, the team is incomplete, the story is compelling. These factors mash against each other on the whiteboard ...

Convertible Notes, When to Use Them, How to Structure Them and Why Investors Hate Them

Monday, May 12th, 2008

Ahhhh, convertible notes. So easy to use, such a comfortable way to avoid the “v” discussion (valuation), so simple to understand. But why aren’t they universally loved? Let’s think about convertible notes in two classes – standard and “true convertibles”. Standard notes are used more often than ...