Financing Workshop for
Entrepreneurs
Presented to the Stanford GSB
Entrepreneur Club
Types of Financing
• Bootstrap
• Bridge Loan
• Angel Financing
• VC Financing
• Corporate Investor
Bridge Financing
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Promissory Note
Interest
Conversion
Term
Warrants
Defaults
Handouts:
• Form of Bridge Financing
Term Sheet
Angel Financing
• Usually less than $1 million
• Terms
• Number of investors
• Finding Angels
VC Financing
• Usually > $1 million
• Often more than one investor
• Terms
Anatomy of a Term Sheet
• Valuation
– How to determine pre-money valuation and
per share price
– Option pools
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Milestones
Dividends
Liquidation preferences
Conversion
Protective provisions
Anti-dilution
Anatomy of a Term Sheet (con’t)
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Right to participate in future rounds
Pay-to-play
Redemption
Drag along
Registration rights
Co-Sale agreement
No shop
Handouts
– Form of Term Sheet
Board Members
Founder
Outside
Director
Series A
Director
Series B
Director
Sample Dilution
Sample Dilution
Sample Dilution
Sample Dilution
Sample Dilution
Corporate Investor
• Higher Valuation
• Less day-to-day involvement
• Conflicts with customers
• Conflicts on exit
Three Things to Remember
• Determine the type of financing that
is right for your company
• Understand the terms of the financing
• Balance dilution with time to market
Allison Leopold Tilley
Tel: 650-233-4518
Email: allison@pillsburywinthrop.com
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Allison Leopold Tilley focuses on the representation of technology
companies in securities and venture capital transactions, including
mergers and acquisitions, private placements, public offerings, venture
funds and joint ventures. She has significant experience representing
acquirers and target companies. Ms. Leopold Tilley is co-head of the Firm’s
Corporate Securities and Technology Section and co-head of the Southeast
Asia Specialty Team.
Ms. Leopold Tilley has represented a wide variety of companies ranging
from start-ups and emerging growth companies to Fortune 500 companies,
private equity firms, venture capital firms and other clients.
Office Locations
Pillsbury Winthrop - 2005
New York
London
Sacramento
Tokyo
San Francisco
Silicon Valley
Los Angeles
Sydney
Century City
Orange County
Houston
Stamford, CT
Carmel Valley
San Diego
Washington, D.C.
Northern Virginia
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