Transaction

Post Investment

Let’s Walk Through Some Docs

• Walk through NVCA Term Sheet
• Walk through NVCA doc set and Cooley for preferred equity, CN
• Walk through YC SAFE

What should you expect post-investment

• Monthly / quarterly updates from the CEO on commercial milestones, product milestones, and primary KPI’s
• Revenue, cash on hand, runway, team size, “North Star” metrics
• Look at existing ones before investing to see what to expect
• Next fundraise:
• You may get told about it but may not participate
• Work with the founder on expectations
• Admin / Taxes:
• If part of a syndicate, they may vote on your behalf
• Taxes: If a C Corp, don’t expect anything; If an LLC, expect an annual K1

Other Resources

• Seraf Due Diligence
• https://seraf-investor.com/compass/article/seraf-toolbox-due-diligence-checklist

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• 33 Questions to Ask
• https://www.forbes.com/sites/mirunagirtu/2021/09/01/evaluating-early-stage-startup-potential-33-key-questions-investors-ask/?sh=3fe789bd2c72

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• Books
• Venture Deals
• Angel

Other Resources

• Term Sheet Terms: https://digify.com/blog/the-startup-founders-ultimate-guide-to-term-sheets/#:~:text=A%20term%20sheet%20is%20a,paperwork%20later%20drafted%20by%20lawyers.
• Valuation Ranges: https://medium.com/journal-of-empirical-entrepreneurship/making-sense-of-startup-valuations-with-data-science-1dededaf18bb
• Liquidation Preference: https://tools.ltse.com/funding-your-startup-a-founders-guide-to-liquidation-preferences-e7db39469463
• Anti Dilution: https://www.mondaq.com/unitedstates/corporate-and-company-law/972820/what-you-need-to-know-about-down-round-financings
• Convertible Notes: https://www.seedinvest.com/blog/angel-investing/how-convertible-notes-work
• Valuation Cap: https://www.greenprintgrowth.com/single-post/Valuation-vs-Valuation-Cap-Whats-the-difference
• SAFE: https://www.ycombinator.com/documents/

See You Next Time