• 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
  • 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
  • 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
  • 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
  • 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
  • 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
  • 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
  • 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
  • Common Stock vs. Convertible Note

    Common Stock vs. Convertible Note Brought to you by: Rick Citron, Citron and Deutsch Often when people are starting a new company, they have trouble coming up with a valuation for that company. When they go to sell stock, they may want a valuation that is much higher than what investors are willing to pay. The solution for that is a convertible note, where somebody invests the money as a promissory note and then when you raise your money, they convert their note into stock usually at a discount of anywhere from 10%-50%. It all depends upon how much risk the original investors took. Convertible notes work in terms of not having to set a valuation. They're tougher later on because when you go to raise your money, you're going to hand out stock at a lower valuation. And if your valuation wh...

    published: 31 May 2012
  • Introduction to Convertible Loan Notes Crowd for Angels

    This video is an introduction to Convertible Loan notes on Crowd for Angels, the crowdfunding platform and how they work. The video explore's what a convertible loan note is, purchasing a loan note, selling that loan note and converting the loan into shares that are tradable in the company. Crowd for Angels is regulated by the Financial Conduct Authority. Investing involves risk, you may lose some or all of your investment. Be an Angel, Fund a UK Company

    published: 09 Oct 2014
  • Convertible notes in capital raising

    Overview of some of the issues associated with use of convertible notes in capital raising

    published: 10 Nov 2014
  • Convertible Debt Financing Term Sheets

    In this AlphaTakes video, Matt Storms discusses convertible debt financings for an emerging technology company. He provides a summary of the common key financial and procedural terms that are typically negotiated in a convertible debt term sheet. Legal Notice: http://alphatechcounsel.com/legal-notice.html

    published: 23 Jan 2015
  • #AskJason w/WSGR - Should I sell a convertible note or series seed stock?

    WATCH FULL EPISODE: http://thisweekinstartups.com/ask-jason-wsgr/ It’s a special #AskJason, featuring Rachel Proffitt and Todd Carpenter from WSGR, answering your startup legal questions. On today’s docket: learn the absolute legal must-haves when bootstrapping a startup (and what can wait…), the convertible note versus series seed stock conundrum, the tricky business of firing your co-founder, determining the valuation of your company, and more! Never miss an episode! Subscribe in iTunes: Audio (http://bit.ly/TwiStA) || Video (http://bit.ly/TwiStV) Find us on Spotify Now. Thank you, WSGR! Click here to tweet your support (can edit before sending): http://ctt.ec/4_W18 ============== Follow on Twitter: @wilsonsonsini @jason @twiStartups Launch Festival: http://launchfestival.com Sp...

    published: 03 Jan 2016
  • Startup Financial Model - How a Convertible Seed Note Works

    The Startup Financial Model is the powerful, yet easy to use worldwide best-selling financial model used by entrepreneurs who are planning, launching, or running a startup or small business and want an excellent financial model to enhance their business plan and venture capital raising efforts

    published: 15 Mar 2017
  • When is Convertible Debt Preferable to Equity Financing a Startup - Dan Street

    In Chapter 10 of 20 of his 2011 Capture Your Flag interview with host Erik Michielsen, software entrepreneur and Borrowed Sugar founder Dan Street shares why he chose to raise convertible debt financing over equity. He shares the pros and cons of each. Convertible debt benefits include structure flexibility and faster time to close. Convertible debt does not provide investor assurance they will own a piece of the company. Street notes the next time he approaches fundraising he would be more open going the equity route. Street is the founder and CEO of Austin, Texas based Borrowed Sugar (www.borrowedsugar.com) which develops Internet software to strengthen local communities. Previously, Street worked in private equity at Kohlberg, Kravis, and Roberts (KKR) and management consulting at Bain ...

    published: 07 Jun 2011
  • 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
What is a Convertible Note? Startups 101 -  Robert Neivert, 500 Startups

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

  • Order:
  • Duration: 52:11
  • Updated: 10 Sep 2015
  • views: 9201
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
PandoHouse Rock: Convertible Notes Explained

PandoHouse Rock: Convertible Notes Explained

  • Order:
  • Duration: 2:19
  • Updated: 15 Oct 2012
  • views: 14698
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
Jay Adelson Discusses Convertible Notes

Jay Adelson Discusses Convertible Notes

  • Order:
  • Duration: 7:05
  • Updated: 01 Nov 2011
  • views: 9329
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
What is a valuation cap?

What is a valuation cap?

  • Order:
  • Duration: 2:00
  • Updated: 15 Apr 2016
  • views: 3327
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
Convertible Notes Explained: Startups, Caps, Examples How they Work   - AngelKings.com

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

  • Order:
  • Duration: 6:37
  • Updated: 08 Mar 2016
  • views: 1770
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
Convertible Debt

Convertible Debt

  • Order:
  • Duration: 10:40
  • Updated: 22 Jan 2011
  • views: 24592
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
Debt/Equity Funding. Convertible Notes

Debt/Equity Funding. Convertible Notes

  • Order:
  • Duration: 2:56
  • Updated: 31 Jan 2015
  • views: 1536
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
How Convertible Notes Work

How Convertible Notes Work

  • Order:
  • Duration: 1:09:06
  • Updated: 07 May 2015
  • views: 4224
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
Common Stock vs. Convertible Note

Common Stock vs. Convertible Note

  • Order:
  • Duration: 0:47
  • Updated: 31 May 2012
  • views: 707
videos
Common Stock vs. Convertible Note Brought to you by: Rick Citron, Citron and Deutsch Often when people are starting a new company, they have trouble coming up with a valuation for that company. When they go to sell stock, they may want a valuation that is much higher than what investors are willing to pay. The solution for that is a convertible note, where somebody invests the money as a promissory note and then when you raise your money, they convert their note into stock usually at a discount of anywhere from 10%-50%. It all depends upon how much risk the original investors took. Convertible notes work in terms of not having to set a valuation. They're tougher later on because when you go to raise your money, you're going to hand out stock at a lower valuation. And if your valuation when you're going to raise your money isn't high enough, you can really get diluted early on in the formation of your company.
https://wn.com/Common_Stock_Vs._Convertible_Note
Introduction to Convertible Loan Notes   Crowd for Angels

Introduction to Convertible Loan Notes Crowd for Angels

  • Order:
  • Duration: 2:41
  • Updated: 09 Oct 2014
  • views: 3792
videos
This video is an introduction to Convertible Loan notes on Crowd for Angels, the crowdfunding platform and how they work. The video explore's what a convertible loan note is, purchasing a loan note, selling that loan note and converting the loan into shares that are tradable in the company. Crowd for Angels is regulated by the Financial Conduct Authority. Investing involves risk, you may lose some or all of your investment. Be an Angel, Fund a UK Company
https://wn.com/Introduction_To_Convertible_Loan_Notes_Crowd_For_Angels
Convertible notes in capital raising

Convertible notes in capital raising

  • Order:
  • Duration: 2:10
  • Updated: 10 Nov 2014
  • views: 327
videos
Overview of some of the issues associated with use of convertible notes in capital raising
https://wn.com/Convertible_Notes_In_Capital_Raising
Convertible Debt Financing Term Sheets

Convertible Debt Financing Term Sheets

  • Order:
  • Duration: 5:28
  • Updated: 23 Jan 2015
  • views: 243
videos
In this AlphaTakes video, Matt Storms discusses convertible debt financings for an emerging technology company. He provides a summary of the common key financial and procedural terms that are typically negotiated in a convertible debt term sheet. Legal Notice: http://alphatechcounsel.com/legal-notice.html
https://wn.com/Convertible_Debt_Financing_Term_Sheets
#AskJason w/WSGR - Should I sell a convertible note or series seed stock?

#AskJason w/WSGR - Should I sell a convertible note or series seed stock?

  • Order:
  • Duration: 6:07
  • Updated: 03 Jan 2016
  • views: 391
videos
WATCH FULL EPISODE: http://thisweekinstartups.com/ask-jason-wsgr/ It’s a special #AskJason, featuring Rachel Proffitt and Todd Carpenter from WSGR, answering your startup legal questions. On today’s docket: learn the absolute legal must-haves when bootstrapping a startup (and what can wait…), the convertible note versus series seed stock conundrum, the tricky business of firing your co-founder, determining the valuation of your company, and more! Never miss an episode! Subscribe in iTunes: Audio (http://bit.ly/TwiStA) || Video (http://bit.ly/TwiStV) Find us on Spotify Now. Thank you, WSGR! Click here to tweet your support (can edit before sending): http://ctt.ec/4_W18 ============== Follow on Twitter: @wilsonsonsini @jason @twiStartups Launch Festival: http://launchfestival.com Special thanks to the members of the TWiST Backchannel! Support TWiST and join the Backchannel: https://recurrency.us/members/twistartups
https://wn.com/Askjason_W_Wsgr_Should_I_Sell_A_Convertible_Note_Or_Series_Seed_Stock
Startup Financial Model - How a Convertible Seed Note Works

Startup Financial Model - How a Convertible Seed Note Works

  • Order:
  • Duration: 13:23
  • Updated: 15 Mar 2017
  • views: 50
videos
The Startup Financial Model is the powerful, yet easy to use worldwide best-selling financial model used by entrepreneurs who are planning, launching, or running a startup or small business and want an excellent financial model to enhance their business plan and venture capital raising efforts
https://wn.com/Startup_Financial_Model_How_A_Convertible_Seed_Note_Works
When is Convertible Debt Preferable to Equity Financing a Startup - Dan Street

When is Convertible Debt Preferable to Equity Financing a Startup - Dan Street

  • Order:
  • Duration: 1:51
  • Updated: 07 Jun 2011
  • views: 1826
videos
In Chapter 10 of 20 of his 2011 Capture Your Flag interview with host Erik Michielsen, software entrepreneur and Borrowed Sugar founder Dan Street shares why he chose to raise convertible debt financing over equity. He shares the pros and cons of each. Convertible debt benefits include structure flexibility and faster time to close. Convertible debt does not provide investor assurance they will own a piece of the company. Street notes the next time he approaches fundraising he would be more open going the equity route. Street is the founder and CEO of Austin, Texas based Borrowed Sugar (www.borrowedsugar.com) which develops Internet software to strengthen local communities. Previously, Street worked in private equity at Kohlberg, Kravis, and Roberts (KKR) and management consulting at Bain & Co. He earned a BA in music and business from Rice University. View more career videos at http://www.captureyourflag.com Follow us on Twitter: http://www.twitter.com/captureyourflag Like us on Facebook: http://www.facebook.com/captureyourflag
https://wn.com/When_Is_Convertible_Debt_Preferable_To_Equity_Financing_A_Startup_Dan_Street
I Don't Do Convertible Notes

I Don't Do Convertible Notes

  • Order:
  • Duration: 3:12
  • Updated: 18 Aug 2014
  • views: 465
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
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