financing workshop for entrepreneurs presented to the stanford gsb entrepreneur club
TRANSCRIPT
Financing Workshop for Entrepreneurs
Presented to the Stanford GSB Entrepreneur Club
Types of Financing
• Bootstrap
• Bridge Loan
• Angel Financing
• VC Financing
• Corporate Investor
Bridge Financing
• Promissory Note
• Interest
• Conversion
• Term
• Warrants
• Defaults
Handouts:
• Form of Bridge Financing Term Sheet
Angel Financing
• Usually less than $1 million
• Terms
• Number of investors
• Finding Angels
VC Financing
• Usually > $1 million
• Often more than one investor
• Terms
Anatomy of a Term Sheet
• Valuation– How to determine pre-money valuation and
per share price– Option pools
• Milestones
• Dividends
• Liquidation preferences
• Conversion
• Protective provisions
• Anti-dilution
Anatomy of a Term Sheet (con’t)
• Right to participate in future rounds
• Pay-to-play
• Redemption
• Drag along
• Registration rights
• Co-Sale agreement
• No shop
• Handouts– Form of Term Sheet
Board Members
CEO
Founder
Series A Director
Series B Director
Outside Director
Sample Dilution
Sample Dilution
Sample Dilution
Sample Dilution
Sample Dilution
Corporate Investor
• Higher Valuation
• Less day-to-day involvement
• Conflicts with customers
• Conflicts on exit
Three Things to Remember
• Determine the type of financing that
is right for your company
• Understand the terms of the financing
• Balance dilution with time to market
Allison Leopold TilleyTel: 650-233-4518
Email: [email protected]
• Allison Leopold Tilley focuses on the representation of technology companies in securities and venture capital transactions, including mergers and acquisitions, private placements, public offerings, venture funds and joint ventures. She has significant experience representing acquirers and target companies. Ms. Leopold Tilley is co-head of the Firm’s Corporate Securities and Technology Section and co-head of the Southeast Asia Specialty Team.
• Ms. Leopold Tilley has represented a wide variety of companies ranging from start-ups and emerging growth companies to Fortune 500 companies, private equity firms, venture capital firms and other clients.
Office Locations
Pillsbury Winthrop - 2005
New York
San Francisco
Sacramento
Silicon Valley
Los Angeles
Century City
Orange County
San DiegoCarmel Valley
Houston
Northern Virginia
Washington, D.C.
Stamford, CT
Sydney
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• Doc #60392513v1