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  1.  
  2. TAKING THE MONEY
  3. Convertible Notes
  4. Investors Weigh In With Convertible Note Caveats for Start-Ups – Venture Capital Dispatch – WSJ
« Discount or cap? A spreadsheet that shows what happens when a note converts.
Crowd Funding Has Not Killed Angel Investing Yet »

Investors Weigh In With Convertible Note Caveats for Start-Ups – Venture Capital Dispatch – WSJ

7 May 2013   | Convertible Notes · Valuation
LINK TO ORIGINAL ARTICLE:
  • http://blogs.wsj.com/venturecapital/2012/09/13/investors-weigh-in-with-convertible-note-caveats-for-start-ups/

Tech entrepreneurs take note: Convertible notes are not free money and, if not structured properly, can prevent you from raising additional financing.

Investors speaking at the TechCrunch in San Francisco this week had this gem and a few other choice observations about early-stage financing for start-ups.

“We’ve had companies come in for their Series A and not realize  that  they’d already given up 25% of their company” in the seed round,” said Partner Alfred Lin, referring to the fact that convertible notes are unpriced, but convert to equity stakes when founders go on to raise a priced Series A round. He added: “That you raise money at a higher valuation

>>> READ MORE at:
  • http://blogs.wsj.com/venturecapital/2012/09/13/investors-weigh-in-with-convertible-note-caveats-for-start-ups/
« Discount or cap? A spreadsheet that shows what happens when a note converts.
Crowd Funding Has Not Killed Angel Investing Yet »

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