Fund Raising
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Rounds
- 4Fs (Friends, families, fools, …)
- Angel
- Seed
- Series A (Venture Capital)
- Series B
- …
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Raising fund affects the Cap Table
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“Simple Agreement for Future Equity” (= SAFE) by Y Combinator
- Discounts
- Valuation Caps
- Most-Favored Nation Provisions
- Pro-Rata Rights
- Best things about SAFE - everyone agrees on “how much the company worth”
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Priced Round (Seed Round)
- Priced = SAFE converts
- Discount of SAFE happens here
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When VC gives $M for X% of company…
- $M deposited into company account
- VC gets new shares equal to X% of new total.
- i.e. post-money valuation