* This is not legal advice. Consult with your lawyer. Antoine Brand asks – What is a private placement memorandum? Should Angel Investors be concerned if the company doesn’t have one? Since many an entrepreneur has asked the same question, why don’t we look at both sides of the table and examine the role it [...]
Taliba M. writes: Made my first angel investment last year and ready to make my second. I’m very interested in this SaaS venture (a startup) but I do not have experience in this particular sector. How should I go about this? Also, would it be possible to request some SaaS topics? Thank you so much. [...]
What’s it like to back a life sciences company? What should investors expect before investing in the bio/health sectors? Who’s entitled to be called an “angel investor”? These are some of the questions Thealzel Lee will answer in this interview. Lee is the senior partner of Rocket Builders, a management consulting firm that sponsors Vancouver [...]
This is Part 3 of our quest to answer a reader’s question on dilution. The reader writes – How do you prevent being washed out as you keep pro-rata and the numbers get increasingly bigger? Suppose you invest $200k for 25%. The venture then raises $5m, so to keep pro rata you do $1.25m of [...]
A reader recently asked about dilution and we decided to answer it in 3 parts. Part 1 looks at dilution in an up round; this part examines dilution in a down round; and Part 3 goes over some of the measures you can take to minimize the impact and likelihood of dilution. Here’s the question: [...]
A reader writes – How do you prevent being washed out as you keep pro-rata and the numbers get increasingly bigger? Suppose you invest $200k for 25%. The venture then raises $5m, so to keep pro rata you do $1.25m of that round. Then it raises $15m. Eventually it gets hard to follow you money [...]
In Part 1, we answered Judd Aston’s question on liquidation preference by illustrating how it protects investors’ downside. What isn’t as obvious is that it also prevents the founders from selling early at investors’ expense. Before you click away thinking that you got a lawyer and you don’t need to understand the terms, check out [...]
Judd Aston writes – I was asking my lawyer about liquidation preference and he bombarded me with legal jargon. Fifteen minutes later I still had not a clue what he had told me. So my question is what is liquidation preference? Some examples would be great. Bravo. You obviously understand the benefits and convenience of [...]
An engaging reader recently shot us an email and suggested the following topic: Flying under the radar. Investing in companies that will never get really big, but have the potential to make a few people financially very happy. Before I offer my take, let’s narrow down the type of angel investors I’ll be referring to [...]
There is something thrilling about early stage investing that attracts angel investors and venture capitalists. Perhaps it’s similar to humankind’s drive to conquer the unknown: Explorers faced travails and even danger to break new ground wherever there were question marks.
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