Tag Archives: Debt.

Let’s say you have started a new company and now you need to raise money from investors in order to bring some outside capital or investment into your company. Do you set up an equity financing and sell shares to equity investors? Or do you take in new investment as debt that must be repaid? When getting ready to raise money, many entrepreneurs and small business owners are not sure how to structure the proposed financing that they need.

Entrepreneur’s Question: “How should I expect liquidation preferences for holders of convertible notes to work?”

Raising Money is critical for entrepreneurs and small business owners who are starting and growing their companies. There are three key issues that you should understand regarding the upcoming changes to Rule 506 and how they will affect your ability to raise startup, working and growth capital for your company.

JOBS Act Overview Prior to April 2012, (the JOBS Act) a Privately-Held Company could not raise money over the Internet, because the Federal Securities Laws did not allow Financing transactions that used General Solicitation or general advertising to potential Investors. Equity Crowdfunding Is Coming! The reason was that this type of general outreach to potential…

You are meeting with a potential investor in a few days and they are interested in structuring a possible investment as convertible debt. You need to get up to speed quickly on the key terms and negotiation points for this type of investment.