What is a Liquidation Preference?

The liquidation preference is the amount that must be paid to the preferred stock holders before distributions may be made to common stock holders. The liquidation preference is payable on either a liquidation of the company, asset sale, merger, consolidation or any other reorganization resulting in the change of control

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TechStars Releases Model Seed Funding Documents

TechStars released a set of model seed funding documents that they use as a staring point for their seed stage financings. The model seed funding documents include: Term Sheet. This sets out the terms of the proposed seed investment into your startup and alsos include the proposed cap table (reflecting

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Selling Your Startup with Convertible Debt

I previously mentioned that convertible debt is a good way to raise capital for most startups. The main reason why convertible debt is beneficial for startups is that it delays coming up with a valuation figure at the seed stage–the valuation conundrum is essentially punted to the Series A (or

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The Basics of Convertible Debt Financing

Selecting the optimal structure when raising capital for your startup can be a challenging task. When clients ask me for my recommendation, I find myself recommending the convertible debt financing route more often than traditional equity financing (i.e., I’ll give you $100k for 20% of your company’s stock). So what

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Making Dallas the City of Angels

I could use more palm trees here in Dallas and while I’m at it a Togo’s. However, the “City of Angels” reference in this post’s title is about bridging the gap between entrepreneurs and angel investors rather than going “Under the Bridge.” The startup ecosystem in Dallas is discombobulated if

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