“Shadow preferred stock” refers to a series of preferred stock that is created when a SAFE or convertible note converts into stock at a price per share that is less than the price per share for the stock issued in a new equity financing. Shadow preferred stock […]
Here are some important things to keep in mind if you are considering raising capital in a SAFE round. What’s the Difference Between a SAFE Financing and a “Priced Round?” When raising capital, one of the main considerations is whether to (a) use a convertible security, like […]
Businesses face several considerations when onboarding founders or employees who reside in foreign countries. These issues also apply to U.S.-based founders and employees who move to a foreign jurisdiction and work remotely.
Transfer restrictions are one of the principal tools that startups use to prevent secondary transfers of their capital stock and maintain tight control over their cap tables. Why include? As secondary sales of restricted securities become more common, perhaps as a result of blockchain-based digital securities being […]
The difference is in the potential dilutive impact of the SAFE on founders. Post-money SAFEs can dilute founders significantly more than pre-money SAFEs. When SAFEs with a valuation cap convert to equity in a future financing, the price at which they convert is determined as follows: SAFE […]
