Spencer TBV terms
by Parker · 18 things on Twos
- Confirming the SAFE effectively acts as $200k of preferred stock at first, meaning you owe them $200k before you get anything back.
- I'm actually not sure what this means? We re pay them? SAFEs are a Simple Agreement for Future Equity. My understanding is when we raise 2.5M from outside parties the SAFE converts into preferred shares. And you're saying when we get acquired/IPO they get whatever their shares are worth before we get money in our pockets?
- Do you know the difference between Dissolution and Liquidity events?
- I believe dissolutions has more to do with shutting down the company. Liquidation could be selling or IPOing?
- Explain the difference between the $5.5mm PM Cap and the $16mm PM Valuation in the Investment Option exhibit.
- 5.5 PM Cap is the cap on what their shares can be worth when we sell real equity. This is purely a SAFE
- The 16M valuation will be the next round (seed) when we establish a valuation
- Do you have a sense for what the pro forma capital stack will look like after this? How much equity will you retain yourself?
- At the end of the pre-seed, yes. We are giving up ~9% of the company as long as we out perform the 5.5M cap in the next financing. I will own 66%
- The seed round will be around 10-20% based on the valuation and amount we raise which will leave me with around 53-57%
- How are the Board seats divied up? I am assuming you maintain voting control but want to make sure.
- Currently, I am the board. When we add a new board member it will be me, joe, and the new board member
- Discuss what the lawyers have said.
- We can discuss on the call
- Generally speaking, how do you feel about the TBV guys as true partners? Will they be there to help you or are they just placing capital?
- I think they will help. All the other founders who have raised from them have really good things to say about them as partners. They have a network of other investors, designers, and accelerators that they will be introducing us to. They’ve also all had success as entrepreneurs so they have some personal experience as well
- Have you talked with the CEOs of any of their other five portfolio companies? Who are the other references you have talked to? It's so important to have the right partners and once you feel good about.
- Yes, it’s more than 5 now, but they all have good things to say about TBV and Andreas