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Should I raise debt or equity?

Summary: If you raise convertible debt for a seed round, you should negotiate simple and short documents, close quickly and cheaply, and maintain your options for the Series A. But first, determine if...

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Comments: Convertible debt and vesting

As usual, there were many mind-expanding comments this week—here are some of the very best. The very lucky winner of this week’s mug for great contributions in the field of venture hacking is indicated...

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Keep your Series A options open if you raise debt

“[Our existing investors] had put in a right of first refusal. Since I was a young entrepreneur at the time, I didn’t understand that this basically meant that you couldn’t go to any other VC… We could...

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What are the benefits of debt in a seed round?

Summary: Convertible debt is often the best choice for a seed round. It is convenient, cheap, and quick. It lets you close the financing quickly and turn your focus back to your customers—that’s good...

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Make your debt attractive to investors

Summary: Seed investors often argue that debt doesn’t incent them to (1) help the business and (2) increase the share price of the eventual Series A. Actually, (1) debt does incent investors to help...

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Comments: Convertible debt

Our comments are now threaded! Click the “Reply” link beneath any comment to leave a response. Here’s an example of a threaded comment. As usual, we’ve received many mind-expanding comments—here are...

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Supersize your debt with these microhacks

Summary: Convert your debt into equity if you can’t pay it on time. Determine your lender’s return if you sell the company early. Reserve the right to raise more debt. Finally, reserve the right to...

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How to make a cap table

Summary: A cap table lists who owns what in a startup. It calculates how the option pool shuffle and seed debt lower the Series A share price. This post includes a fill-in-the-blank spreadsheet you can...

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