Venture Financing

Business Context

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Startup Funding Stages

A company goes through several funding stages as it moves from formation to exit. This course takes a look at each of them and their impact on a company and its founders.

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Raising Venture Capital

A look at how emerging companies raise venture capital, from finding and pitching investors to closing a deal.

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Venture Capital Firms

This course describes how VC firms are structured, who works at them and how they make investment decisions.

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Convertible Debt Financings

Convertible debt financings are a common alternative to priced equity rounds. This course explains convertible debt financings and their most common form, convertible notes. It also describes alternatives to notes, such as SAFEs and KISSes.

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Advice on Raising Venture Capital

Brad Feld and Jason Mendelson of Foundry Group on the issues founders should consider when raising venture capital for the first time, including when to raise money, picking the right venture partner and how to think about the economic and control rights at stake.

Deal Documents

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Venture Capital Term Sheets

A discussion of the perspective of companies and investors on the main economic and control rights negotiated in a venture financing term sheet. Includes liquidation preference, anti-dilution provisions, board rights and employment matters.

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Amended and Restated Certificates of Incorporation

A walkthrough of an Amended and Restated Certificate of Incorporation (also called the Amended and Restated Charter) used in a venture capital transaction, with a focus on the sections governing preferred stock.

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Investor Rights Agreements

A walkthrough of a typical Investor Rights Agreement, including explanations of its main provisions.

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Voting Agreements

A walkthrough of a typical Voting Agreement, including explanations of its main provisions.

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Ancillary Documents

Venture financing deals include several ancillary documents, in addition to the principal deal documents, that cover important legal and business issues. This course describes the ones most commonly used.

Common Associate Assignments

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Due Diligence for Venture Deals

A summary of the business and legal due diligence that parties conduct in a venture financing deal. Includes what to look for when reviewing key areas such as corporate governance and intellectual property, as well as an explanation of a cap table tie-out.

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Cap Tables and Pro Forma Cap Tables

Cap tables and pro forma cap tables are used before, during and after a deal. This course uses Excel examples to explain their structure, content and uses.

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Venture Capital Closings

An explanation of the closing process for venture capital deals, including preparing for and managing a closing, typical closing documents and post-closing requirements.

Venture Math

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Price Per Share Calculations

After the main financial terms of a venture deal are agreed, it’s usually up to the lawyers to work out the actual price per share. This course explains how these calculations work, and suggests a couple of useful Excel tips.

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Note Conversion Calculations

How to calculate the conversion of a convertible note into preferred stock when the note has a discount, a valuation cap or both.

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Pro Rata Rights Calculations

How to calculate the investment amount and number of shares to be issued in accordance with an investor’s pro rata right.

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Actual Investment and Share Amount Calculations

Once the financial terms of a venture deal are set, the lawyers need to work out exactly how much each investor is investing and how many shares they’ll be issued. This course explains the calculations involved.