Category Archives: Founders
SAFEs vs. Convertible Notes: What Founders Actually Need to Know
There are two common ways to raise early-stage money without negotiating a valuation immediately: SAFEs; and Convertible notes. They are similar in some ways. They are very different in others. Most founders should understand both before signing either. The SAFE: The Modern Default A SAFE — short for Simple Agreement for Future Equity —… Read More »
How Much Equity Should Founders Give Away?
The honest answer: as little as you can reasonably give up without killing the round. Founders often underestimate how expensive early equity becomes later. At the beginning, equity feels cheap and cash feels scarce. If the company succeeds, that relationship flips. How Equity Dilution Works Equity financing means investors contribute capital in exchange for… Read More »
What Is an Angel Investor?
Raise enough money and you will meet two species of investor: the angel and the VC. They write checks that look the same on a bank statement. Everything else about them is different. Angels are individuals. VCs are institutions. Angels usually write the first meaningful check; VCs often write the second. Angels make decisions… Read More »
All a Board
Frank Founder: “I just met Sam, a really well respected, seasoned industry expert. She would be a perfect addition to join our new company, Rocket Corp. Can I add her to my board of directors?” Me: “No.” In truth, Frank could add Sam to his board of directors, but it’s probably not what he… Read More »
How Many Shares Do I Have?….Um…
When talking to founders, we regularly uncover confusion about share count: how much has been issued? What was that number they first put in their charter? What’s this “fully diluted” number they read about on a VC blog? As a founder, it is essential to understand your cap table, and that means knowing the… Read More »
10 Legal Mistakes Startups Make
I had an opportunity to speak on a startup panel with some great colleagues about mistakes startups make. Below are the legal missteps I touched on: 1. Overall Approach to Legal – Too Rich Sometimes startups feel most comfortable using a big law firm whose name they recognize or because they have a relative… Read More »