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What’s on this site?

April 26, 2007

Below is a comprehensive list of posts.

CONVERTIBLE NOTE BRIDGE FINANCINGS

1. Should a startup company raise its seed round using a convertible note or Series A Preferred Stock?

2. What does a convertible note bridge financing term sheet look like?

3. What should the interest rate for a convertible bridge note be?

4. What should the conversion discount be for a bridge note into preferred stock?

5. What type of financing forces an automatic conversion of the promissory note into Preferred Stock?

6. What happens to the convertible promissory note if the maturity date is reached and there hasn’t been a financing?

7. What happens if the Company is sold after the convertible bridge note is issued and before the maturity date or the next round of financing?

8. What should the maturity date of the convertible note be?

9. What should the terms of bridge loan warrant coverage be?

10. Can you have multiple closings in a convertible note bridge financing?

11. What does subordination mean in a convertible bridge note?

12. What is a security interest in connection with a convertible note?

13. What should the representation and warranties in the note purchase agreement be?

14. Why should a majority of investors be able to amend the convertible notes?

15. Who pays legal fees in a convertible note bridge financing and how much does it cost?

16. What is the economic difference between a conversion discount and warrant coverage for a convertible note?

17. What is the California Finance Lenders Law?

SERIES A FINANCINGS

1. What trends does WSGR see in venture financings?

2. What does a Series A term sheet look like?

3. What do definitive agreements for a Series A financing look like?

4. Are Series A term sheets binding?

5. What is preferred stock and why is it issued to investors?

6. How do you calculate Series A price per share?

7. Can you have multiple closings in a Series A financing?

8. What is a dividend preference?

9. What is a liquidation preference?

10. What is the amount of a typical liquidation preference?

11. What is the difference between non-participating preferred stock and participating preferred stock?

12. What is a cap on a participating preferred liquidation preference?

13. What is the priority of the liquidation preference when the Series B financing occurs?

14. Why do preferred stockholders have odd economic incentives upon a sale of company when they have non-participating preferred stock or particpating preferred stock with a cap?

15. What are redemption rights?

16. Why is preferred stock convertible into common stock?

17. When should preferred stock be automatically converted into common stock?

18. What is anti-dilution protection?

19. What is weighted average anti-dilution protection?

20. What is full ratchet anti-dilution protection?

21. What is a pay to play provision?

22. What are carveouts to anti-dilution protection?

23. What are protective provisions?

24. What stockholder approval is necessary to complete a venture financing?

25. What are information rights?

26. What are registration rights?

27. What are demand registration rights?

28. What are piggyback registration rights?

29. What are S-3 registration rights?

30. What is a market standoff or IPO lockup provision?

31. What is a right of first offer or right to maintain proportionate ownership in future financings?

32. What is a right of first refusal and co-sale agreement?

33. What is a drag-along or bring-along provision?

34. What should the composition of the board be like and how are the board seats allocated?

35. What are board observer rights?

36. What is a management rights letter?

37. What should legal fees for a Series A financing be?

38. What should the terms of the no shop be?

39. Why should a term sheet be confidential?

40. What are the conditions to closing of a Series A financing?

41. What does the legal opinion cover?

SERIES B FINANCINGS

1. What does pari passu mean?

2. Should the Series B liquidation preference be senior to the Series A?

3. Should the Series B have a separate protective provision?

COMPANY FORMATION

The third series of posts will be on incorporation, founders stock, option plans and other company formation issues.

1. What state should I incorporate in?

2. How many shares should be authorized in the certificate of incorporation?

3. What is par value?

4. What is an agent for service of process?

5. How do you calculate Delaware franchise taxes?

6. What trademark and other legal issues are involved in selecting a company name?

7. What inspection and information rights does a stockholder have?

[to come]

FOUNDERS ISSUES

1. Should founders stock be subject to vesting before a venture financing?

2. What should the vesting terms of founder stock be before a venture financing?

3. What is an 83(b) election?

4. What is qualified small business stock?

5. What is Series FF stock?

[to come]

STOCK OPTIONS

1. What is Section 409A?

2. What’s the difference between an ISO and an NSO?

3. How do you set the exercise price of stock options?

GENERAL

1.  What is important in a confidentiality agreement or non-disclosure agreement (NDA)?

M&A

1. What stockholder approval is necessary to sell a company?

2. What are directors’ duties and what can they do to protect themselves in a sale of company?

[to come]

Written by Yokum · Filed Under Uncategorized 

Comments

9 Responses to “What’s on this site?”

  1. Erin on April 30th, 2007 10:12 pm

    This is great stuff - congrats and welcome to blogging! You’re also kind of scary-prolific.

  2. Venture Hacks — Should you raise debt or equity? on May 1st, 2007 2:18 am

    [...] debt instead of equity because debt is simpler and cheaper. Read Yokum Taku’s excellent series on convertible debt for a [...]

  3. Paul M. Harkins on May 2nd, 2007 4:53 pm

    Yokum,
    Amazing insight you are offering here. I am sure you have heard this before, however “when you start to receive calls from vc firms, what are the top 5 questions to ask them to even consider getting serious about them investing?”

  4. Chris Jenkins on May 2nd, 2007 6:46 pm

    Yokum - Truly amazing! You are brilliant.

  5. Venture Hacks — [Hack] The benefits of debt vs. equity in a seed round on May 14th, 2007 1:01 am

    [...] company both expect to convert the convertible debt into equity when you close the Series A. Read Yokum Taku’s series on convertible debt for a primer on this lovely financial [...]

  6. Darran E Foxon on May 14th, 2007 7:35 am

    Yokum,

    Thanks for writing this series of informative and very useful articles - I look forward to your next posts

  7. AP on August 24th, 2007 6:43 am

    Yokum - “Stumbled” across your website. Great stuff. Would you happen to have a cap table template that would calculate ownership changes at various rounds and accomodates various types of investment vehicles, pref, convertible, particicpating etc for regular rounds/down rounds etc….?

  8. AP on August 24th, 2007 7:56 am

    I think series A rounds are relatively easy to understand (given Nivi’s cap table on Venture Hacks), though would love to see a Series B and C as part of the progression if possible - just to see how th numbers move around. Thanks much in advance…AP

  9. Yokum on August 25th, 2007 2:15 am

    AP - go bug Nivi to see if he will create a more sophisticated spreadsheet. Generally, you need a CFO with strong math skills or attorneys that aren’t scared of excel.

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