Category: Seed Funding (SAFEs and Convertible Notes)
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Don’t Go Crazy with Complex Rounds of Seed Funding
I loved Pitch Camp. Flip Flops. Free donuts and pizza. Hours of “unauthorized” advice from the angel investor, venture capital, and journalism communities. It sure beat the heck out of any legal conference I’ve ever attended. At Pitch Camp, a fund’s partner told the crowd that he turned down a startup simply because the startup’s…
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What is a Private Placement?
While no true definition of a private placement exists, it is commonly used to refer to the raising of capital (i.e., “securities”) without making a registration with the United States Securities and Exchange Commission (SEC). Under the Securities Act of 1933, any offer to sell securities must either be registered with the SEC or meet…
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What is Preferred Stock?
A definition of preferred stock and how it benefits startups and investors
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How to Issue Weak Preferred Stock to Friends & Family
How to issue preferred stock to friends and family without limiting future venture capital rounds.
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Life is Too Short to Deal with Non-Accredited Investors
Why your startup company should not raise money from non-accredited investors
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Why Your Startup Company Needs to Keep the Number of its Investors Low
If you can’t self-fund your startup company and must take on investors, keep the number of your investors as low as possible. A low number of investors will reduce your startup company’s transaction costs and headaches associated with raising funds. I’d rather my client raise $90k from one investor than $100k collectively from ten based…