• Which kind of valuation do you need and when?

    by Melody Peng · Friday, July 17, 2015

    Valuation comes up constantly in reference to startups. But it can be confusing because sometimes the same word is used with very different meanings. Several different types of valuations come into play for startups. For example, there are the staggering and not necessarily realizable private company valuations that everyone hears about. There are public market valuations that reflect what investors believe stocks will be worth in the future. And there are 409A valuations.

  • The hidden trap of convertible debt: multiple liquidation preference

    by BJ Lackland · 6 hours ago

    There are problems with convertible debt as it has become the funding method of choice. So we wanted make entrepreneurs aware of perhaps the most hidden and misunderstood issue – multiple liquidation preferences. In a nutshell, investors in convertible debt that has a valuation cap are often getting a significantly higher liquidation preference than the cash they invested in the company — and this is ultimately coming out of the founders’ pockets and can even mess up later rounds of equity financing.

  • Something to celebrate – we’ve closed 100 deals!

    by BJ Lackland · Thursday, July 2, 2015

    We just closed Q2 and hit 100 deals this week! ONE HUNDRED FINANCINGS! That’s a lot of capital for a lot of tech entrepreneurs all around the country to grow and build their business, to create jobs, to roll out new products, and so much more – all while they keep their equity.

  • Participating or non-participating preferred stock: What’s the difference?

    by Melody Peng · Monday, June 29, 2015

    I often get questions from founders about different types of stock or equity they can offer investors. In preferred stock offerings (e.g., a Series Seed Preferred Stock financing), one of the key things founders should pay attention to when evaluating a term sheet is whether the preferred stock is “participating” or “non-participating.”

  • Five reasons why startups fail

    by Melody Peng · Friday, June 26, 2015

    No one likes to talk about it, but the odds of success for startups are pretty slim. In order to move the needle in your favor, you first need to understand where the potential minefields are. Avoid these five startup killers, or do your best to have controls in place to mitigate them.