Correction: In the spreadsheet graphics, the Notes have a 20% discount (not 10% as written). Join Feel the Boot for access to one-on-one coaching with me: ftb.bz/Join Follow us on LinkedIn ftb.bz/LinkedIn or Twitter ftb.bz/Twitter
Great stuff, like it a lot! Two questions: 1) You say 20% discount on the notes but the visualizations say 10%. Seems 20% makes sense but just checking. 2) How do you reach the 200,000 shares in the Capped Down Round-example? P
That is an error. The numbers reflect 20% but the row title says 10%. I probably was switching back and forth as I developed the content and failed to fix that. I have updated the version in the blog.
Great question. Investor dilution alongside the founders is how it usually works. Once they have shares, they are impacted by the company issuing new shares in exactly the same way as the founders and everyone else. Some investors will ask for "anti-dilution" provisions. Founders should push back hard on that. In a down round, it could cost them most of the company.
@@FeeltheBoot thank you for answering. The number of shares remain the same through each round. So the value of the shares is increasing but the equity % is decreasing. When do investors actually get paid because the business is too small to pay dividends.
@@chichi0000 the investors make money when the company is acquired by a larger company, or goes public with an IPO. At that point they can sell their shares which should be worth far more than they paid. Typically, investors have to wait 7-10 years before they see anything.
Tremendous! super useful. thank you.
Fantastic, thanks!!!
Thanks Lance, so valuable information
Glad it was helpful!
So good content!!! Thanks!
Glad you liked it!
Where were you all these years !!!! What an eye opener for founders. Fantastic Explanation. Pls enlighten us more....
Thanks so much for your kind words!
Are there any specific topics you would like me to cover?
Thank you for this incredible content on dilution
Glad you enjoy it!
Really interesting video. I never thought about dilution quite that way.
Thanks for the feedback! Let me know if there are topics I have missed.
Amazing content, i salute you
Thanks!!
Valuable content needed this.
You are absolutely Amazing! Thank you for sharing so clearly!
Thanks!
Great video - incredibly helpful
Glad it was helpful!
Very helpful video! thank you so much!
Thanks! Are you fundraising right now? What are you seeing out there?
Very very helpful video! Thank you so much. Liked and subbed.
Great video! Thank you
Glad you liked it!
Thanks, also on FB.
Correction: In the spreadsheet graphics, the Notes have a 20% discount (not 10% as written).
Join Feel the Boot for access to one-on-one coaching with me: ftb.bz/Join
Follow us on LinkedIn ftb.bz/LinkedIn or Twitter ftb.bz/Twitter
Great stuff, like it a lot! Two questions:
1) You say 20% discount on the notes but the visualizations say 10%. Seems 20% makes sense but just checking.
2) How do you reach the 200,000 shares in the Capped Down Round-example?
P
That is an error. The numbers reflect 20% but the row title says 10%. I probably was switching back and forth as I developed the content and failed to fix that. I have updated the version in the blog.
Good content...liked👍
Thanks!
Informative as ever!
Glad to hear it!
Hi, What if the investors equity dilutes each year as well as the founders, after each round. Is that a good deal for an investor or no?
Great question. Investor dilution alongside the founders is how it usually works. Once they have shares, they are impacted by the company issuing new shares in exactly the same way as the founders and everyone else.
Some investors will ask for "anti-dilution" provisions. Founders should push back hard on that. In a down round, it could cost them most of the company.
@@FeeltheBoot thank you for answering. The number of shares remain the same through each round. So the value of the shares is increasing but the equity % is decreasing. When do investors actually get paid because the business is too small to pay dividends.
@@chichi0000 the investors make money when the company is acquired by a larger company, or goes public with an IPO. At that point they can sell their shares which should be worth far more than they paid. Typically, investors have to wait 7-10 years before they see anything.
@@FeeltheBoot Thank you, you've taught me a lot :)
Last question please: do I need a lawyer when signing a safe note contract?
Nothing clear with a share price...
I am not sure I understand you.