Emerging Enterprise Center Blog - How much to discount a convertible angel note - Comments http://www.emergingenterprisecenterblog.com/ Boston Startup Lawyers & Attorneys for Venture Capital & Financing Entrepreneurs en Copyright 2012 Mon, 16 Apr 2012 03:57:55 -0500 Mon, 16 Apr 2012 03:57:55 -0500 http://www.sixapart.com/movabletype/?v=4.32-en http://blogs.law.harvard.edu/tech/rss Michael Feinstein Generally angel investments are relatively small dollars. To the VC showing up next, the actual discount rate doesn't matter that much as the gross level of discount doesn't represent a big financial interest.

But, I have found that $1M of angel investment is about the limit where that is the case. Beyond that, it gets tough to justify the discount when it goes into the next round. If the angel investment is getting to that size or beyond, I'd recommend negotiating a price for the equity and just converting it into a round. I'd also suggest being very 'vanilla' on the terms of that round as they'll form a precedent of the terms of following rounds.

]]> http://www.emergingenterprisecenterblog.com/deal-terms/how-much-to-discount-a-convertible-angel-note/#18781 http://www.emergingenterprisecenterblog.com/deal-terms/how-much-to-discount-a-convertible-angel-note/#18781 Angel InvestorsDeal Terms Wed, 12 Aug 2009 07:00:00 -0500 Dave Broadwin hot deal Thanks for sharing information

]]> http://www.emergingenterprisecenterblog.com/deal-terms/how-much-to-discount-a-convertible-angel-note/#175881 http://www.emergingenterprisecenterblog.com/deal-terms/how-much-to-discount-a-convertible-angel-note/#175881 Angel InvestorsDeal Terms Wed, 12 Aug 2009 07:00:00 -0500 Dave Broadwin