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newyuppie
Pablo Ambram
Quito, Ecuador
blog.newyuppie.net
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What Makes an Entrepreneur? Four Letters: JFDI
I used to sit on the board of a company (for which I DID NOT invest) with a very smart and very likable CEO. This person was educated at the best US schools and had worked for a top-tier strategy consulting firm – one of the big 3. The CEO led every board meeting with vigor and the board members (sans me) were always wowed. The CEO had 60-page Powerpoint presentations analyzing every micro detail of the business. The company had less than $5 million in revenue yet we had a multi-tab spreadsheet doing activity-based costing on our customer service staff, operations and technology.
Even with the best connectivity, however, there can be problems if a system requires services that are locked inside an onshore firewall. You'll need to build good test doubles for these services so the system can be effectively tested in the development environment. Have Each Site Send Ambassadors to the Other Sites (Interestingly people assume that these communication problems are specifically a problem with a remote site like India - but we've found problems often occur with the infrastructure in the west too. Continuous Integration requires good connectivity, often better connectivity than people are used to.)
Five Tips for Entrepreneurs 1. Push for the Issuance of Convertible Notes . As noted above, angels will sometimes request shares of preferred stock for their investment; however, unless the start-up is raising at least approximately $750K, it generally is not in the entrepreneur’s interest to issue such shares. Indeed, preferred stock financings are complicated, time-consuming and expensive. Moreover, the company would need to be valued, which is obviously difficult at such an early stage and could be extremely dilutive to the founders.
Angel Financings: 5 Tips for Entrepreneurs | WALKER CORPORATE LA
The rule of thumb in connection with private placements is to sell securities only to “accredited investors” (as defined in Rule 501 of Regulation D) in reliance on Rule 506 of Regulation D. There are two significant reasons for this: (1) Rule 506 preempts state-law registration requirements pursuant to the National Securities Markets Improvement Act of 1996 – which means, in general, that the issuer merely must file with the applicable state commissioners (i) a Form D, (ii) a consent to service and (iii) a filing fee; and (2) there is no prescribed written disclosure requirement if the investors are “accredited” – though it still may be prudent to furnish to investors a private placement memorandum (or at least a summary and a set of risk factors).
Mistakes in Raising Capital | WALKER CORPORATE LAW GROUP, PLLC
Term Sheet – Anti-Dilution
In our example language, we’ve included a section which is generally referred to as “anti-dilution carve outs” (the section (other than shares (i) … (iv) ). These are the standard exceptions for share granted at lower prices for which anti-dilution does not kick in. Obviously – from a company (and entrepreneur) perspective – more exceptions are better – and most investors will accept these carve-outs without much argument. One particular item to note is the last carve out: (iv) shares with respect to which the holders of a majority of the outstanding Series A Preferred waive their anti-dilution rights.
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