safe: a better replacement for convertible notes - brendan ciecko - innovation nest mentors
Post on 16-Jul-2015
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Innovation Nest – Poland most active seed fund invites hand selected companies to a series of closed events. This one is about money.
WHAT IS THIS?
WHO IS BRENDAN?Brendan Ciecko is the Founder & CEO of Spotzer, a start-up with the vision to transform the way people engage with art and culture at museums and beyond.
getspotzer.com
@brendanciecko
SAFE
Simple Agreement for Future Equity A better replacement for convertible notes.
What’s SAFE anyway?
introduced by Y Combinator in 2013 fast to execute keeps down legal costs intended to replace convertible notes
SAFE in a nutshell:
short & easy to understand not debt, not a loan conversion to equity at priced round no risk of insolvency
and a little bit more:
It requires only 5 pages therefore is short and easy to understand
It keeps things simple
zzzz
zzzzzz
zzz
zzzz
SAFE
CONVERTIBLE NOTE
FAST & SIMPLE CONVERSION TO EQUITY
CORPS ONLY
INTEREST RATE MATURITY DATE
CORPS & LLC
DISCOUNT CAP MFN
EARLY EXIT
Let’s compare:
SAFE
I’ve never seen this before
I’m trying to figure out if your investment structure allows me to get a certain tax treatment. The SAFE structure is a bit atypical, although more the norm now. ””
Reactions to SAFE are mixed…
FIND MENTORS & ADVISORS
They provide advice, introductions, investment, and social proof. They care about your business as much as you do and will be able to provide you with valuable connections and advice.
#1
Fundraising is extremely time consuming for CEO. It’s crucial to plan the whole process as you’ll find yourself fundraising for next couple of months.
#2
START THE PROCESS EARLY
Prepare different set of pitches that you can use in certain situations, eg:
ITERATE YOUR PITCH
20 second pitchJust enough information to grab attention
1 minute pitch Give something to attract and explain briefly the idea
5 minutes pitch Provide more details but do not bore the audience
#3
FIND A LAWYER THAT SPECIALIZE IN START-UP LAW
You don’t have to know all legal nuances. It’s always better to be safe than sorry.
#4
RELATE
When contacting an investor try to find things that you two have in common. It shortens the distance and builds a nice foundation for longer relationship.
#5
WARM VS COLD INTRODUCTIONS
Being referred to an investor by CEO of one of their portfolio companies will work much better than sending cold emails.
#6
BE PERSISTENT
Fundraising requires persistence. Do not give up. Keep following up until you receive the final answer.
#7
This presentation is brought to you by Innovation NestLearn more about us at innovationnest.co
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