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What equity is given for this (/how has it changed?) and is this pre defined or 'negotiated' ?
by polshaw 14y ago
What equity is given for this (/how has it changed?) and is this pre defined or 'negotiated' ?
- ibdknox 14y agoThis is a convertible note[1], just like the previous incarnations. Which means that the amount of equity it is worth isn't determined until a priced round happens (where a valuation is set). [1]: http://techcrunch.com/2012/04/21/convertible-note-seed-financings-econ-101/ http://techcrunch.com/2012/04/21/convertible-note-seed-finan...
- polshaw 14y agoThanks, i see.. is there a requirement on when to take more funding then? what would happen if the startup didn't take further funding (put remained profitable)?
- ibdknox 14y agoIf I remember correctly there's a year long grace period after which the investors can choose to force the note to convert. I don't know much about how that works though.