Setting Equity Fundraise Terms

 

 

Raise Amount

The fundraising goal you select is a very important decision. You should be optimizing toward an amount that is sufficient to achieve your stated goals, but low enough so that you can surpass your stated goal. Equity raises start at a minimum of $10,000 and can go up to $10 million.

Duration

Your fundraise can last as long as you wish but an investor’s commitment will need to be renewed every 90 days until closing. If you don't successfully close your raise within that time frame, the investor will be given the opportunity to renew or withdraw their commitment (in case their funds are no longer available). This gives you the flexibility to take more time for your raise if needed. A typical equity fundraise is at least 60 days.

Valuation

The valuation is the the proposed value of the company at the time of the investment. Be sure to include the amount that you are proposing to raise in your total valuation (also known as a "Post Money Valuation"). For Example, if you are valuing the company at $750,000 and are raising $250,000, the valuation is $1 million. Investors are getting 25% of the total value including their investment.

Equity or Convertible Debt

Most startups will be raising their first equity round using straight equity, which means investors get a share of the business at a predetermined valuation when they invest. Another option, Convertible Debt, is a slightly different instrument that implies that a valuation is not set right now, but will be set at a later date, like when another round of capital is raised.

Deal Terms

You can provide additional deal terms to potential investors on your fundraise profile, like your set Valuation Cap (on a Convertible Debt raise). We recommend you consult your attorney to make sure any and all terms that are critical to your fundraise are properly represented in your profile.

 

the startups.co platform

Copyright © 2017 Startups.co. All rights reserved.

Fundable is a software as a service crowdfunding platform. Fundable is not a registered broker-dealer and does not offer investment advice or advise on the raising of capital through securities offerings. Fundable does not recommend or otherwise suggest that any investor make an investment in a particular company, or that any company offer securities to a particular investor. Fundable takes no part in the negotiation or execution of transactions for the purchase or sale of securities, and at no time has possession of funds or securities. No securities transactions are executed or negotiated on or through the Fundable platform. Fundable receives no compensation in connection with the purchase or sale of securities.