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Startup Funding Deal Terms: SAFEs, Convertible Notes, Equity Financings

Wayne Hu
49.1K subscribers
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15K views 3 years ago SAN FRANCISCO
Many startup founders and entrepreneurs get deep into the startup funding process and find they have to learn about legal terms and financing structures on the fly. What are SAFE notes, convertible notes, and priced rounds, and how to convertible notes vs SAFE notes compare? How does fundraising dilution works across multiple rounds? What are options pools, liquidity preference, board seats, protective provisions and other key financing terms? I'll cover all the key terms you need to know before you head into startup funding 0:00 Introduction 0:37 Ways to raise money from venture capitalists 0:51 Equity priced rounds 1:19 Price and valuation 2:20 Options pool 2:49 Warrants 3:08 Liquidity preference 4:12 Board seats 4:50 Protective provisions 5:03 Founder vesting 6:24 Major investor rights 8:22 SAFE notes 10:09 Dilution with SAFE notes converting into priced round 11:34 Convertible notes See my tips for how to pitch your startup, including creating a compelling pitch deck and running an effective pitch meeting:    • The Ultimate Guide to Pitching your S...   ...more
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Startup Funding Deal Terms: SAFEs, Convertible Notes, Equity Financings
693Likes
15,723Views
2021Jul 15
Many startup founders and entrepreneurs get deep into the startup funding process and find they have to learn about legal terms and financing structures on the fly. What are SAFE notes, convertible notes, and priced rounds, and how to convertible notes vs SAFE notes compare? How does fundraising dilution works across multiple rounds? What are options pools, liquidity preference, board seats, protective provisions and other key financing terms? I'll cover all the key terms you need to know before you head into startup funding 0:00 Introduction 0:37 Ways to raise money from venture capitalists 0:51 Equity priced rounds 1:19 Price and valuation 2:20 Options pool 2:49 Warrants 3:08 Liquidity preference 4:12 Board seats 4:50 Protective provisions 5:03 Founder vesting 6:24 Major investor rights 8:22 SAFE notes 10:09 Dilution with SAFE notes converting into priced round 11:34 Convertible notes See my tips for how to pitch your startup, including creating a compelling pitch deck and running an effective pitch meeting:    • The Ultimate Guide to Pitching your S...  

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Wayne Hu

49.1K subscribers