Archive for the ‘Fundraising’ Category

Pre-post money price caps

One piece of received wisdom that, with experience, I’ve come to question is that convertible notes and their stepsiblings, Simple Agreements for Future Equity (“SAFEs”), are “simple.” Yes, the documents for these types of investments are generally quite short and deal with fewer issues, so they are (as we’ve noted in the past) easier and […]

Updates to Crowdfunding

Fundraising is essential for many startups, but the types of fundraising methods are limited. The traditional methods are bootstrapping, convertible notes, simple agreements for future-equity (SAFEs), and priced equity rounds. We have guided many founders through fundraising. Equity crowdfunding is a newer option. Crowdfunding is meant to allow founders to accept small investments from a […]

VC-style financing is not the only way

In my last post, I enthusiastically recommended Tim O’Reilly’s piece in Quartz, critiquing the prevailing winner-take-all ethos of Silicon Valley investing. In this post, I want to recommend a piece animated by a similar spirit: an interview with Bryce Roberts, founder of (and one of O’Reilly’s partners in the O’Reilly AlphaTech Ventures fund) on […]

Changes to Illinois Angel Tax Credit Rules [Updated]

UPDATE 1/9/19: The program is reauthorized for 2019, with a total of $10 million in credits set aside by the state. We’ve written in a past edition of our goodnews newsletter about an Illinois program to encourage investment in innovative early-stage companies, the Illinois Angel Tax Credit Program. Illinois has recently made an important change, which could […]

Pro Forma Cap Tables for Financing Rounds

For early-stage startups looking to raise a pre-seed financing round (usually from either friends and family, angel investors or Micro VCs), the Simple Agreement for Future Equity, or SAFE, has become a mainstream, company-friendly mechanism to complete the financing. (See goodcounsel’s original post about SAFEs, here.)

Will Illinois be next to adopt “intrastate crowdfunding”?

Would you like to accept small investments in your company from your Aunt Rose, your brother-in-law Bobby and your best friend from high school? Many people are surprised to learn that, unless these friends and family members are high-net worth investors, this is not the kind of thing that is safe to do – not, at least, if you […]

Convertible debt — hold the debt

We do a lot of convertible notes at goodcounsel, so we try to keep with the state of the art. A year or so ago, some West Coast incubators teamed up with the Wilson Sonsini law firm to create a type of convertible equity for seed, financings intended to replace convertible debt. Convertible debt minus […]

Proposed “Regulation Crowdfunding” = disappointment

In an earlier post, I described the major points of the proposed crowdfunding rules issued by the SEC (known as “Regulation Crowdfunding”) pursuant to the JOBS Act. Now, I’d like to offer my reactions. My basic reaction is this: you have got to be kidding me.

What’s in the SEC’s proposed crowdfunding regulations?

At last, the Securities and Exchange Commission (SEC) has proposed “Regulation Crowdfunding” (the rules implementing Title III of the JOBS Act). I apologize for my delay in posting about this, but in my defense, the release containing the proposed rules is 585 pages long. (The length alone gives one pause about how workable this regulatory […]

Getting by with a little help from your friends

“If I just want to raise some seed capital from friends, I don’t have to worry about any legal issues, right?” Ah, if only life (and the law) were that simple. In the recent edition of goodnews, goodcounsel’s newsletter, we discussed what you need to think about when you think about taking investment capital from […]