Advantages of Convertible Debt in Seed Financing
Friday, November 13th, 2009We’ve already written about the difficulties and risks of trying to put a value on your company too early (here), but how does an early stage company raise money without a reliable valuation? One way is through convertible debt.
Convertible debt is pretty much what it sounds like: debt that can convert to equity. A convertible [...]
Don’t get hung up on the valuation of your startup
Tuesday, September 8th, 2009Many entrepreneurs want to put a value on their company before the ink on their incorporation documents is dry, but valuing an early stage company is as much art as science, and a bad valuation can be worse than no valuation at all.
Valuing a company that doesn’t yet have a product on the market, much [...]
The Private Placement Memorandum in Seed Financing
Wednesday, August 19th, 2009The private placement memorandum (PPM) is a document that companies may, and sometimes must, provide to potential investors that includes detailed financial and non-financial information material to an understanding of the issuer, its business and the securities being offered.
The Securities and Exchange Commission requires that a company provide a PPM to all non-accredited investors in [...]
Financing Your Business: Raising Capital Under Regulation D
Monday, July 6th, 2009Anytime a privately-held company issues securities – to investors in a financing, to employees as compensation, or for any other reason – the issuer must be able to point to an applicable exemption from the general requirement that all issuances of securities be registered with the Securities and Exchange Commission (SEC). When raising capital from [...]
Raising Cash from Friends, Family and Accredited Investors
Tuesday, June 16th, 2009With venture capital and angel financing harder to come by right now, it is tempting to ask friends and family to invest a little seed capital to keep your business running until institutional investors loosen their purse strings. Proceed with caution! Selling shares to friends and family may seem like a simple proposition – after [...]
Legal Basics: Non-Disclosure Agreements
Friday, June 5th, 2009Signing a Non-Disclosure Agreement (NDA) is an important prelude to many business discussions that is too often overlooked or bypassed. NDAs, also called Confidentiality Agreements, serve to protect a company’s confidential information by imposing terms and conditions on the disclosure and use of that information by parties with whom the company shares it. If your [...]
How to Get More Bang for Your Buck: Keep your lawyer better informed
Monday, May 11th, 2009It has been our experience that some clients seem to believe that the best way to get the most out of their lawyers is to only call them when it is absolutely necessary, and then pressure them to get the requested work done as quickly as possible. In fact, in the long run you will [...]