All Entries in the "Terms" Category
Alliott Cole of Octopus Ventures: Winning Competitive Deals
It’s no secret that investors fight head over heels for sizzling deals and promising entrepreneurs to increase odds of success and potential returns. But when demand for quality deals exceeds supply, you better come up with exclusive, creative, or effective ways to lure the Steve Jobses of tomorrow. How to compete for hot deals? Are [...]
Key Terms in Convertible Debt: The Basics
In Angel Deal Structure: A Look at Convertible Debt, we summarized why experienced investors don’t like convertible debt deals; provided an overview on the concept of convertible notes; and discussed why lawyers often recommend entrepreneurs to go with these notes. Here’s the original question from Nasim: From my understanding, preferred equity and convertible debt are [...]
Convertible Debt: A Look at the Angel Deal Structure
Nasim writes: From my understanding, preferred equity and convertible debt are the two main investment vehicles currently used in angel investments. I’m confused as to how to structure my seed investment. The entrepreneur and his lawyer press for convertible notes…that convert into common…but I recall from one of your articles that experienced investors think notes [...]
Angel Investing: Dilution Preventive Measures (Part 3)
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 [...]
Angel Investing: Dilution in a Down Round (Part 2)
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: [...]
Rob Delman: Remove nepotism from investment opportunity
A month ago just before Christmas, Rob Delman of Golden Seeds (aka the “Golden Dude”) played Santa and dropped a gift packed with pitch preparation tips (for angels) down our chimney. We loved it and so did you. It’s a given – we’re very greedy when it comes to angel investing tips and insights. So [...]
Term Sheet: What Da Heck Is Liquidation Preference (Part 2)
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 [...]
Term Sheet: What Da Heck Is Liquidation Preference (Part 1)
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 [...]
Martin Zwilling of Startup Professionals: Angel Investing ABC
When it comes to startup advice for tech entrepreneurs, twitterati StartupPro (a.k.a. Martin Zwilling) will probably pop up your mind. Over the past 30 years, Zwilling has led technical business transformations, held a wide range of tech management roles, as well as done due diligence and funding analysis for investors. Though he does little investing, [...]
Bruno Bensaid: “Startups need cash, then value. No cash, they die.”
Whether you visit news sites or flip open the newspaper, you’ll see that Chinese entrepreneurs and the state of economy in China are garnering some serious ink. To learn more about China’s angel investing scene and general investing practices, Venture Hype got in touch with Shanghai-based investor Bruno Bensaid. Bensaid is the founder of MobileMonday [...]
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