Seed stage investment deals, i.e., those in a range of approximately $100,000 on the low end and around $1.3 million on the high end, are structured either as straight equity or as convertible loans. If straight equity, the company typically issues to the investor shares of preferred stock usually designated as Series Seed which includes
Convertible Valuation Caps: Loved by Angels, Tolerated by VCs and Hated by Entrepreneurs
By Alon Y. Kapen on
Posted in Getting Started
I’ve noticed a recent trend of angel investors demanding valuation caps on their convertible bridge loans, and I’ve received questions lately from startup and VC clients about them. So I thought this would be an opportune time to explain what all the fuss is about.
First, the basics.
A convertible note evidences a…