• PandoHouse Rock: Convertible Notes Explained

    Many startups are forgoing traditional seed funding in favor of convertible notes, loans which convert into stock after a company goes through its next round of funding. But are convertible notes good for startups? Are they good for investors? The Explainer Music team breaks it all down in its latest video.

    published: 15 Oct 2012
  • What is a Convertible Note? Startups 101 -  Robert Neivert, 500 Startups

    Learn how to build your company from experts at 500 Startups and Galvanize. Sign up for upcoming workshops at http://galvanize.com/events. So, the first general rule of thumb is convertible notes are done when you’re doing a small amount, generally under a million, you are not an expert or haven’t had a chance to do the necessary research for an equity round, Fred Wilson is not financing you, because he doesn’t do convertible notes. The other thing about convertible notes is, they don’t define the valuation as clearly. But realistically, they kind of do. About Galvanize -------------------------- Galvanize is a dynamic learning community for technology. Our community is where people and companies with the guts and smarts to create real-world change congregate and inspire each other. Ou...

    published: 10 Sep 2015
  • Jay Adelson Discusses Convertible Notes

    Today Jay explains what a convertible note is in an early funding round along with why to consider offering them to investors or not. Have a question about launching a business that you want answered? Comment or add a video response! Jay Adelson's Twitter: http://www.twitter.com/jayadelson Email Your Questions: askjay@revision3.com Never Miss An Episode! Subscribe Here: http://www.youtube.com/subscription_center?add_user=askjayadelson Check Out The YouTube Channel: http://www.youtube.com/askjayadelson Facebook: http://www.facebook.com/askjayadelson More AskJay Episodes: http://www.revision3.com/askjay About Ask Jay: Entrepreneur, CEO, and business owner Jay Adelson (Equinix, Digg, Revision3, SimpleGeo) demystifies the start-up process by providing advice, tip...

    published: 01 Nov 2011
  • Convertible Note - explained

    Learn what a convertible note is and how it works

    published: 05 Jul 2017
  • Convertible Debt

    What is convertible debt and how is it used in a basic way? How does it avoid the valuation question? If it defers the valuation discussion, how does it convert into equity and under what circumstances? What is the discount rate and what does that mean? How does this effect ownership percentages?

    published: 22 Jan 2011
  • What is a valuation cap?

    A valuation cap is something that applies to convertible notes. A convertible note is a security that is a hybrid of both debt and equity. Notes are issued in the place of priced equity, typically when a company is raising less than a million dollars and does not want to generate the legal expenses associated with a priced round. When the company issues a larger amount of capital, the notes will have the option to “convert” into the newly issued securities at a pre-set “discount” to the price of the follow-on round. These discounts typically range from 15 to 25 percent. However, in order to provide investors with some of the protections of a priced round, they add a”cap” to the valuation. The “cap” sets the highest valuation that can be used to determine the conversion price of the notes. ...

    published: 15 Apr 2016
  • Equity Vs. Convertible Debt

    Music by Nathaniel Schroeder: http://www.soundcloud.com/drschroeder

    published: 04 Aug 2016
  • Convertible Notes Explained: Startups, Caps, Examples How they Work - AngelKings.com

    Convertible notes explained for startups, valuation caps, and examples of how convertible notes and debt work when raising money for startup financing (http://angelkings.com/course); Expert on startups and investing Ross Blankenship (http://rossblankenship.com) describes convertible note examples, how these notes work, when they're payable, and how the convertible note compares to equity rounds. Our startup expert also explains the "valuation cap" behind notes and the discount for future funding. #convertiblenote #startups #financing #equity vs. note #valuation

    published: 08 Mar 2016
  • Introduction to Convertible Notes

    In this video, Sharat Potharaju, Co-Founder & CEO, MobStac, shares how you can use convertible notes to your advantage. Checkout Entrepreneur Academy for more startup tips and how tos: http://www.nenonline.tv

    published: 02 Jun 2014
  • How Convertible Notes Work, Part 1

    In the first of a two-part series of webinars focused on Convertible Notes, Kevin Smith, CEO of SEEDCHANGE and Sirk Roh, Consultant CFO for Early Growth Financial Services review the basics of the convertible note. Hear about how it works, the terms that matter, SAFEs, and see a couple of examples.

    published: 10 Aug 2016
  • Discussing Convertible Notes, Caps, and Debt for Startups | CEO of Notion, Brett Jurgens

    Brett Jurgens is the co-founder and CEO of Notion. He leads fundraising, operations, business development, sales and marketing efforts. For more information, check out: More videos and livestreams: http://www.drapertv.com Residential program: http://www.draperuniversity.com Online Courses: http://www.courses.drapertv.com Subscribe for more videos!

    published: 14 Sep 2015
  • I Don't Do Convertible Notes

    Brief overview of my thoughts on why convertible notes are a poor choice for investors and entrepreneurs. (Entrepreneurship, Angel Investing)

    published: 18 Aug 2014
  • How Convertible Notes Work

    Sharat Potharaju, Co-Founder and CEO at MobStac explains how convertible notes work. Checkout Entrepreneur Academy for more startup tips and how tos: http://www.nenonline.tv

    published: 13 Jul 2014
  • Convertible Note: Everything You Need to Know

    Have more questions? Hire an attorney on UpCounsel today and Post a Job: https://www.upcounsel.com/jobs/new What is a Convertible Note? A convertible note is a security instrument, typically used by an angel investor or a seed investor, that takes the form of a short-term loan, either secured or unsecured, to provide seed capital for a business. The convertible nature of the note allows the debt to be converted into equity in the company (typically in the form of preferred stock) at some specified future event, often in connection with the company’s valuation in a later round of funding.

    published: 11 Apr 2018
  • Startup Financial Model - How a Convertible Seed Note Works

    The Startup Financial Model is an easy-to-use financial projection software app for those who are planning, launching, or running a startup or small business and want an excellent financial model to enhance their business plan and capital raising efforts. The business plan assumptions are entered in an easy-to-use, step-by-step format. The Startup Financial Model app handles both recurring and one-time sales models for offerings and works for all business models: software, services, product manufacturing, etc. All reports are automatically calculated and produced and the summary report is ideal for your pitch deck. To see exactly why clients are raving about our financial projections software, check out our 15-day free trial: https://app.startupfinancialmodel.com/signup?pro=freetrial

    published: 15 Mar 2017
  • Convertible Notes

    What is the advantage of convertible notes vs. equity? When is it appropriate to use a convertible note? Mattan explains what convertible notes are and when it's appropriate to use them.

    published: 12 Jul 2017
  • Convertible Notes Explained

    www.ExplainerMusic.com

    published: 24 Jul 2014
  • How Convertible Notes Work

    Convertible notes are one of the most common ways investors invest in early-stage startups. And yet, even with their popularity, they are still quite confusing to many founders. If you've looking for a greater understanding of convertible notes, check out this presentation from Kevin Smith from SEEDCHANGE (www.seedchange.com) and Gadiel Morantes from Early Growth Financial Services (www.egfs.co) where they explore how convertible notes really work, including: - Why convertible notes vs. shares of common or preferred stock - Convertible note terms - and the terms that REALLY matter - Conversion mechanics - Valuation cap - Safe alternatives to convertible notes - and more....!

    published: 07 May 2015
  • Convertible Notes - MUST-See Review - How they Work - AngelKings.com

    What is a convertible note? How do convertible notes work? Convertible notes explained with review by leading expert on startups Ross Blankenship (http://angelkings.com/course) who discusses the basics of convertible notes which investors use for as loans that "convert" into equity at a later date according to convertible note documents. You need to understand the basics of this important convertible note agreement... Some of the questions answered in this video on startups include: What is a convertible note in business? What is a convertible promissory note? What is a convertible loan note? Is a convertible note a security? We also teach you the important convertible note document terms that you need to know, including maturity date, equity conversion, how to calculate the equity tha...

    published: 02 Feb 2017
  • Angel Investing: My Experience With SAFE Agreements and Convertible Notes

    In 2017, I placed three angel investments in early stage technology startups. It was my biggest year yet as an angel investor. I also gained extensive experience with SAFE Agreements (Simple Agreement For Future Equity) and Convertible Notes. Learn about my experience with angel investing, and learn all about SAFE Agreements and Convertible Notes. At a high level, I'm a cash flow investor at heart. And, I only allocate up to 10% of my portfolio for riskier investments like tech startups. However, I really value this 10% because I have not lost money yet on an angel investment, and it's a way to supercharge my returns. I can take profits from angel investments and reallocate to more traditional cash flow instruments. Today's video includes: * Definitions of SAFE Agreements and Convertible...

    published: 09 Jan 2018
  • Debt/Equity Funding. Convertible Notes

    A hybrid or a bridge between debt and equity is a convertible note. On the surface it works as an incredible loan that beats the odds of debt funding because it does not comply with the requisite of certainty. Who are the crazy lenders of convertible debt? Investors. We love it! It is an excellent way to manage the uncertainty and cost to estimate a company’s valuation. It does not mean that it reduces the risk or eliminates the due diligence process. Yet it makes a lot of sense when both parties – fund seeker and provider- want to shift the discussion on valuation to a later round of investment, when the company is more credible and when new funds are expected. Convertible notes provide an agreement that defines the amount of capital provided to the company, the interest rate, and three ...

    published: 31 Jan 2015
  • Should you be wary of Convertible Note Investments?

    WATCH FULL EPISODE: https://youtu.be/rcjO5Gl9CWg @Jalak, founder @futurepvc explains her hesitancy to make Convertible Note Investments. w/@jason's @launchincubator Follow: thisweekinstartups.com http://twitter.com/twistartups http://twitter.com/jason

    published: 12 Aug 2015
  • Convertible Promissory Notes - 3 Mistakes to Avoid

    In this video, we are going to talk about some nuances of convertible promissory notes. For a detailed write-up of convertible promissory notes, please reference by blog post: http://startupvoice.blogspot.com/2011/12/annotated-convertible-promissory-note.html. Inna Efimchik, a Partner in the Emerging Companies group at White Summers Caffee & James LLP, specializes in assisting emerging technology companies in Silicon Valley and beyond, providing incorporation, financing, and licensing services as well as general corporate counseling. For more information, visit: http://efimchik.com/StartupFAQs.html http://startupvoice.blogspot.com/ http://white-summers.com/

    published: 13 Aug 2015
  • Convertible debt: risks and terms to be aware of

    Free convertible notes calculator: https://equidam.com/convertible-note-calculator Read more on: https://www.equidam.com/convertible-debt-risks-and-terms/ Curious about your company valuation? Sign up for free at https://www.equidam.com/ In this video, Gianluca Valentini, co-founder of www.equidam.com, explains why convertible debt is a complicated security that can have drastic implications at the moment of conversion and highlights some terms founders should be aware of. ---- Today I'm going to talk about an alternative to the insurance of shares when you're raising capital for your seed round. We're going to talk about convertible loans or convertible debt. What is this? Well, first of all you should keep in mind that convertible debt is not equity. It sounds silly, but you shou...

    published: 14 Jun 2016
developed with YouTube
PandoHouse Rock: Convertible Notes Explained
2:19

PandoHouse Rock: Convertible Notes Explained

  • Order:
  • Duration: 2:19
  • Updated: 15 Oct 2012
  • views: 20704
videos
Many startups are forgoing traditional seed funding in favor of convertible notes, loans which convert into stock after a company goes through its next round of funding. But are convertible notes good for startups? Are they good for investors? The Explainer Music team breaks it all down in its latest video.
https://wn.com/Pandohouse_Rock_Convertible_Notes_Explained
What is a Convertible Note? Startups 101 -  Robert Neivert, 500 Startups
52:11

What is a Convertible Note? Startups 101 -  Robert Neivert, 500 Startups

  • Order:
  • Duration: 52:11
  • Updated: 10 Sep 2015
  • views: 15307
videos
Learn how to build your company from experts at 500 Startups and Galvanize. Sign up for upcoming workshops at http://galvanize.com/events. So, the first general rule of thumb is convertible notes are done when you’re doing a small amount, generally under a million, you are not an expert or haven’t had a chance to do the necessary research for an equity round, Fred Wilson is not financing you, because he doesn’t do convertible notes. The other thing about convertible notes is, they don’t define the valuation as clearly. But realistically, they kind of do. About Galvanize -------------------------- Galvanize is a dynamic learning community for technology. Our community is where people and companies with the guts and smarts to create real-world change congregate and inspire each other. Our goal is to make opportunities in technology available to all those with the aptitude, determination and drive. Follow Galvanize --------------------------- http://www.facebook.com/GalvanizeHQ http://www.twitter.com/galvanize
https://wn.com/What_Is_A_Convertible_Note_Startups_101_Robert_Neivert,_500_Startups
Jay Adelson Discusses Convertible Notes
7:05

Jay Adelson Discusses Convertible Notes

  • Order:
  • Duration: 7:05
  • Updated: 01 Nov 2011
  • views: 11133
videos
Today Jay explains what a convertible note is in an early funding round along with why to consider offering them to investors or not. Have a question about launching a business that you want answered? Comment or add a video response! Jay Adelson's Twitter: http://www.twitter.com/jayadelson Email Your Questions: askjay@revision3.com Never Miss An Episode! Subscribe Here: http://www.youtube.com/subscription_center?add_user=askjayadelson Check Out The YouTube Channel: http://www.youtube.com/askjayadelson Facebook: http://www.facebook.com/askjayadelson More AskJay Episodes: http://www.revision3.com/askjay About Ask Jay: Entrepreneur, CEO, and business owner Jay Adelson (Equinix, Digg, Revision3, SimpleGeo) demystifies the start-up process by providing advice, tips and answering questions. Submit questions to learn how to turn any business idea into reality and maybe even change the world.
https://wn.com/Jay_Adelson_Discusses_Convertible_Notes
Convertible Note - explained
1:26

Convertible Note - explained

  • Order:
  • Duration: 1:26
  • Updated: 05 Jul 2017
  • views: 844
videos
Learn what a convertible note is and how it works
https://wn.com/Convertible_Note_Explained
Convertible Debt
10:40

Convertible Debt

  • Order:
  • Duration: 10:40
  • Updated: 22 Jan 2011
  • views: 30774
videos
What is convertible debt and how is it used in a basic way? How does it avoid the valuation question? If it defers the valuation discussion, how does it convert into equity and under what circumstances? What is the discount rate and what does that mean? How does this effect ownership percentages?
https://wn.com/Convertible_Debt
What is a valuation cap?
2:00

What is a valuation cap?

  • Order:
  • Duration: 2:00
  • Updated: 15 Apr 2016
  • views: 7378
videos
A valuation cap is something that applies to convertible notes. A convertible note is a security that is a hybrid of both debt and equity. Notes are issued in the place of priced equity, typically when a company is raising less than a million dollars and does not want to generate the legal expenses associated with a priced round. When the company issues a larger amount of capital, the notes will have the option to “convert” into the newly issued securities at a pre-set “discount” to the price of the follow-on round. These discounts typically range from 15 to 25 percent. However, in order to provide investors with some of the protections of a priced round, they add a”cap” to the valuation. The “cap” sets the highest valuation that can be used to determine the conversion price of the notes. For example: If the notes have a 20 percent discount and a 5 million dollar cap, and the next round is priced at $5 million, the notes will convert as though they were originally priced at $4 million. However, if the next round is priced at $10 million, the notes will convert at a $5 million price instead of $8 million, as $5 million was the “cap” on the price of the original equity. This allows companies to postpone setting a valuation while protecting the upside of investors to a reasonable extent, as the lower the conversion valuation, the more equity the investor receives. Learn more at http://www.1000angels.com
https://wn.com/What_Is_A_Valuation_Cap
Equity Vs.  Convertible Debt
4:25

Equity Vs. Convertible Debt

  • Order:
  • Duration: 4:25
  • Updated: 04 Aug 2016
  • views: 1795
videos
Music by Nathaniel Schroeder: http://www.soundcloud.com/drschroeder
https://wn.com/Equity_Vs._Convertible_Debt
Convertible Notes Explained: Startups, Caps, Examples How they Work   - AngelKings.com
6:37

Convertible Notes Explained: Startups, Caps, Examples How they Work - AngelKings.com

  • Order:
  • Duration: 6:37
  • Updated: 08 Mar 2016
  • views: 3341
videos
Convertible notes explained for startups, valuation caps, and examples of how convertible notes and debt work when raising money for startup financing (http://angelkings.com/course); Expert on startups and investing Ross Blankenship (http://rossblankenship.com) describes convertible note examples, how these notes work, when they're payable, and how the convertible note compares to equity rounds. Our startup expert also explains the "valuation cap" behind notes and the discount for future funding. #convertiblenote #startups #financing #equity vs. note #valuation
https://wn.com/Convertible_Notes_Explained_Startups,_Caps,_Examples_How_They_Work_Angelkings.Com
Introduction to Convertible Notes
3:34

Introduction to Convertible Notes

  • Order:
  • Duration: 3:34
  • Updated: 02 Jun 2014
  • views: 1881
videos
In this video, Sharat Potharaju, Co-Founder & CEO, MobStac, shares how you can use convertible notes to your advantage. Checkout Entrepreneur Academy for more startup tips and how tos: http://www.nenonline.tv
https://wn.com/Introduction_To_Convertible_Notes
How Convertible Notes Work, Part 1
1:04:24

How Convertible Notes Work, Part 1

  • Order:
  • Duration: 1:04:24
  • Updated: 10 Aug 2016
  • views: 134
videos
In the first of a two-part series of webinars focused on Convertible Notes, Kevin Smith, CEO of SEEDCHANGE and Sirk Roh, Consultant CFO for Early Growth Financial Services review the basics of the convertible note. Hear about how it works, the terms that matter, SAFEs, and see a couple of examples.
https://wn.com/How_Convertible_Notes_Work,_Part_1
Discussing Convertible Notes, Caps, and Debt for Startups | CEO of Notion, Brett Jurgens
10:05

Discussing Convertible Notes, Caps, and Debt for Startups | CEO of Notion, Brett Jurgens

  • Order:
  • Duration: 10:05
  • Updated: 14 Sep 2015
  • views: 424
videos
Brett Jurgens is the co-founder and CEO of Notion. He leads fundraising, operations, business development, sales and marketing efforts. For more information, check out: More videos and livestreams: http://www.drapertv.com Residential program: http://www.draperuniversity.com Online Courses: http://www.courses.drapertv.com Subscribe for more videos!
https://wn.com/Discussing_Convertible_Notes,_Caps,_And_Debt_For_Startups_|_Ceo_Of_Notion,_Brett_Jurgens
I Don't Do Convertible Notes
3:12

I Don't Do Convertible Notes

  • Order:
  • Duration: 3:12
  • Updated: 18 Aug 2014
  • views: 597
videos
Brief overview of my thoughts on why convertible notes are a poor choice for investors and entrepreneurs. (Entrepreneurship, Angel Investing)
https://wn.com/I_Don't_Do_Convertible_Notes
How Convertible Notes Work
2:17

How Convertible Notes Work

  • Order:
  • Duration: 2:17
  • Updated: 13 Jul 2014
  • views: 875
videos
Sharat Potharaju, Co-Founder and CEO at MobStac explains how convertible notes work. Checkout Entrepreneur Academy for more startup tips and how tos: http://www.nenonline.tv
https://wn.com/How_Convertible_Notes_Work
Convertible Note: Everything You Need to Know
2:44

Convertible Note: Everything You Need to Know

  • Order:
  • Duration: 2:44
  • Updated: 11 Apr 2018
  • views: 5
videos
Have more questions? Hire an attorney on UpCounsel today and Post a Job: https://www.upcounsel.com/jobs/new What is a Convertible Note? A convertible note is a security instrument, typically used by an angel investor or a seed investor, that takes the form of a short-term loan, either secured or unsecured, to provide seed capital for a business. The convertible nature of the note allows the debt to be converted into equity in the company (typically in the form of preferred stock) at some specified future event, often in connection with the company’s valuation in a later round of funding.
https://wn.com/Convertible_Note_Everything_You_Need_To_Know
Startup Financial Model - How a Convertible Seed Note Works
13:23

Startup Financial Model - How a Convertible Seed Note Works

  • Order:
  • Duration: 13:23
  • Updated: 15 Mar 2017
  • views: 768
videos
The Startup Financial Model is an easy-to-use financial projection software app for those who are planning, launching, or running a startup or small business and want an excellent financial model to enhance their business plan and capital raising efforts. The business plan assumptions are entered in an easy-to-use, step-by-step format. The Startup Financial Model app handles both recurring and one-time sales models for offerings and works for all business models: software, services, product manufacturing, etc. All reports are automatically calculated and produced and the summary report is ideal for your pitch deck. To see exactly why clients are raving about our financial projections software, check out our 15-day free trial: https://app.startupfinancialmodel.com/signup?pro=freetrial
https://wn.com/Startup_Financial_Model_How_A_Convertible_Seed_Note_Works
Convertible Notes
1:02

Convertible Notes

  • Order:
  • Duration: 1:02
  • Updated: 12 Jul 2017
  • views: 167
videos
What is the advantage of convertible notes vs. equity? When is it appropriate to use a convertible note? Mattan explains what convertible notes are and when it's appropriate to use them.
https://wn.com/Convertible_Notes
Convertible Notes Explained
2:19

Convertible Notes Explained

  • Order:
  • Duration: 2:19
  • Updated: 24 Jul 2014
  • views: 255
videos
www.ExplainerMusic.com
https://wn.com/Convertible_Notes_Explained
How Convertible Notes Work
1:09:06

How Convertible Notes Work

  • Order:
  • Duration: 1:09:06
  • Updated: 07 May 2015
  • views: 5199
videos
Convertible notes are one of the most common ways investors invest in early-stage startups. And yet, even with their popularity, they are still quite confusing to many founders. If you've looking for a greater understanding of convertible notes, check out this presentation from Kevin Smith from SEEDCHANGE (www.seedchange.com) and Gadiel Morantes from Early Growth Financial Services (www.egfs.co) where they explore how convertible notes really work, including: - Why convertible notes vs. shares of common or preferred stock - Convertible note terms - and the terms that REALLY matter - Conversion mechanics - Valuation cap - Safe alternatives to convertible notes - and more....!
https://wn.com/How_Convertible_Notes_Work
Convertible Notes - MUST-See Review - How they Work - AngelKings.com
3:54

Convertible Notes - MUST-See Review - How they Work - AngelKings.com

  • Order:
  • Duration: 3:54
  • Updated: 02 Feb 2017
  • views: 168
videos
What is a convertible note? How do convertible notes work? Convertible notes explained with review by leading expert on startups Ross Blankenship (http://angelkings.com/course) who discusses the basics of convertible notes which investors use for as loans that "convert" into equity at a later date according to convertible note documents. You need to understand the basics of this important convertible note agreement... Some of the questions answered in this video on startups include: What is a convertible note in business? What is a convertible promissory note? What is a convertible loan note? Is a convertible note a security? We also teach you the important convertible note document terms that you need to know, including maturity date, equity conversion, how to calculate the equity that is converted based on the valuation; we even compare convertible notes vs. SAFE agreements. #Startups #Investing #ConvertibleNote #Promissory #Equity
https://wn.com/Convertible_Notes_Must_See_Review_How_They_Work_Angelkings.Com
Angel Investing: My Experience With SAFE Agreements and Convertible Notes
24:13

Angel Investing: My Experience With SAFE Agreements and Convertible Notes

  • Order:
  • Duration: 24:13
  • Updated: 09 Jan 2018
  • views: 755
videos
In 2017, I placed three angel investments in early stage technology startups. It was my biggest year yet as an angel investor. I also gained extensive experience with SAFE Agreements (Simple Agreement For Future Equity) and Convertible Notes. Learn about my experience with angel investing, and learn all about SAFE Agreements and Convertible Notes. At a high level, I'm a cash flow investor at heart. And, I only allocate up to 10% of my portfolio for riskier investments like tech startups. However, I really value this 10% because I have not lost money yet on an angel investment, and it's a way to supercharge my returns. I can take profits from angel investments and reallocate to more traditional cash flow instruments. Today's video includes: * Definitions of SAFE Agreements and Convertible Notes. * Pros and Cons of SAFE Agreements and Convertible Notes. * The importance of timing and understanding when one's agreement will convert into real equity. * The importance of the discount factor, and getting rewarded for getting in early (during the friends and family round). * How valuation caps work and why they matter. * Why it's key to avoid SAFE Agreements and Convertible Notes that have a buy out clause. * The importance of performing extensive due diligence and looking at all numbers. (I avoid deals where I don't have access to numbers.) * What it means to be an accredited investor, and how angel investments are typically restricted to accredited investors. That being said, even if one cannot invest, it's never too early to start building one's network. As a closing thought, I love angel investing because it allows me to invest in my friends. It allows me to invest in dreams. That being said, I think some people get into angel investing for the wrong reasons. I keep my investments private (I typically don't list them online), since this is not a bragging competition. Disclaimer: I'm not a licensed investment advisor, and today's video is just for entertainment and fun. This video is NOT investment advice. Please talk to your licensed investment advisor before making any financial decisions. All content on my YouTube channel is (c) Copyright IJL Productions LLC.
https://wn.com/Angel_Investing_My_Experience_With_Safe_Agreements_And_Convertible_Notes
Debt/Equity Funding. Convertible Notes
2:56

Debt/Equity Funding. Convertible Notes

  • Order:
  • Duration: 2:56
  • Updated: 31 Jan 2015
  • views: 1929
videos
A hybrid or a bridge between debt and equity is a convertible note. On the surface it works as an incredible loan that beats the odds of debt funding because it does not comply with the requisite of certainty. Who are the crazy lenders of convertible debt? Investors. We love it! It is an excellent way to manage the uncertainty and cost to estimate a company’s valuation. It does not mean that it reduces the risk or eliminates the due diligence process. Yet it makes a lot of sense when both parties – fund seeker and provider- want to shift the discussion on valuation to a later round of investment, when the company is more credible and when new funds are expected. Convertible notes provide an agreement that defines the amount of capital provided to the company, the interest rate, and three new concepts: cap, discount, and conversion. Interest rates are usually a little higher than traditional loans. Valuation Cap or Cap refers to the maximum valuation that is accepted as appropriate for both the fund seeker and supplier. Discount refers to the benefit an investor/lender receives in terms of a lower value of the company’s equity in future rounds of investments. That means that beyond the interest, there is an upside to the investor/lender that chooses to convert to equity by using the money owed by the company to purchase shares at a discounted price that the price accepted in that funding round. The amount of the discount is negotiable, but a good rule of thumb is 20 to 25 percent per annum. This has to be balanced with the cap rate described before. An alternative to discounts are warrants. A warrant is an option to purchase a certain number of shares at a pre-determined price. It is more complicated and less common than discounts as it focuses on the funds that are loaned or invested and less on the new valuation of the company. Convertible notes are also flexible in the sense that it is an agreement between parties that are less scrutinized than financial institutions. It is fairly common for the parties to make adjustments as the company evolves.
https://wn.com/Debt_Equity_Funding._Convertible_Notes
Should you be wary of Convertible Note Investments?
1:24

Should you be wary of Convertible Note Investments?

  • Order:
  • Duration: 1:24
  • Updated: 12 Aug 2015
  • views: 204
videos
WATCH FULL EPISODE: https://youtu.be/rcjO5Gl9CWg @Jalak, founder @futurepvc explains her hesitancy to make Convertible Note Investments. w/@jason's @launchincubator Follow: thisweekinstartups.com http://twitter.com/twistartups http://twitter.com/jason
https://wn.com/Should_You_Be_Wary_Of_Convertible_Note_Investments
Convertible Promissory Notes - 3 Mistakes to Avoid
17:23

Convertible Promissory Notes - 3 Mistakes to Avoid

  • Order:
  • Duration: 17:23
  • Updated: 13 Aug 2015
  • views: 4375
videos
In this video, we are going to talk about some nuances of convertible promissory notes. For a detailed write-up of convertible promissory notes, please reference by blog post: http://startupvoice.blogspot.com/2011/12/annotated-convertible-promissory-note.html. Inna Efimchik, a Partner in the Emerging Companies group at White Summers Caffee & James LLP, specializes in assisting emerging technology companies in Silicon Valley and beyond, providing incorporation, financing, and licensing services as well as general corporate counseling. For more information, visit: http://efimchik.com/StartupFAQs.html http://startupvoice.blogspot.com/ http://white-summers.com/
https://wn.com/Convertible_Promissory_Notes_3_Mistakes_To_Avoid
Convertible debt: risks and terms to be aware of
4:24

Convertible debt: risks and terms to be aware of

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  • Duration: 4:24
  • Updated: 14 Jun 2016
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Free convertible notes calculator: https://equidam.com/convertible-note-calculator Read more on: https://www.equidam.com/convertible-debt-risks-and-terms/ Curious about your company valuation? Sign up for free at https://www.equidam.com/ In this video, Gianluca Valentini, co-founder of www.equidam.com, explains why convertible debt is a complicated security that can have drastic implications at the moment of conversion and highlights some terms founders should be aware of. ---- Today I'm going to talk about an alternative to the insurance of shares when you're raising capital for your seed round. We're going to talk about convertible loans or convertible debt. What is this? Well, first of all you should keep in mind that convertible debt is not equity. It sounds silly, but you shouldn't confuse the two of them, they are two very different types of securities. With equity or shares you are part of the shareholders. If you are a debt holder, as much as it is convertible, you are senior to the equity holders, meaning that in case of liquidation of the company for acquisition or for any other reason, you they are going to get their money back before the shareholders. That's very important. But this is not it! Because they are not simply debt holders, they are debt holders with a special right to convert into shareholders, meaning that they are protected from the downsides because they have debt, so they are senior to the equity holders, but they can also join the upsides whenever the company goes well, which sounds very favorable. Convertible debt is a very complicated security that can have very important and even drastic implications on your cap table whenever they convert. So it's very important for you, as a founder, to understand exactly what's going to happen and there are some tools online that will help you with that. Convertible debt comes with a few terms that you should absolutely read about. The first is the interest rate: what is, on the amount that the investor invests, what is the interest rate that he's going to gain throughout the tenure of debt. The second aspect is the discount, meaning that whenever they convert, they are going to get the discount on that valuation so if a new investor comes in, let's say a VC firm, and they buy into your valuation at 5 million pre-money, your debt holders are going to convert not a 5 million pre money, they are going to convert at 5 million minus the discount. That's very important. Then there is another very tricky aspect, the cap. The cap is the maximum valuation that they can convert at. If an investor comes in and values the company at 5 million pre-money but you have a cap for 3 million pre money, they're going to convert at 3 million plus the discount. It is very important because you may have your early stage investors or debt holders to convert at a very favorable valuation, meaning that the original founders will actually end up with much less in the company. I also have to say that some VC firms may be skeptical in investing in companies that issued convertible debt in such an early stage. That depends a bit on the geography, but it could be a problem in some cases, depending on the terms. In conclusion, be careful with that, it can be a good way to raise your first capital but if you think that you're going to escape the problem of valuating your business at such an early stage, that is not true. There is not a shortcut because any way, you are going to be required to put a cap, so you're going to have a valuation discussion anyway, because you should at least imagine what's going to happen when the next round comes in, which means when they are going to convert from debt to equity.
https://wn.com/Convertible_Debt_Risks_And_Terms_To_Be_Aware_Of
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