What is a Convertible Note? A convertible note is essentially short-term debt that converts into equity at the closing of a Series A round of financing.1 Essentially, an investor will loan a certain amount of money to a startup in return for a note with terms defining how the equity distribution will work.2 Generally, the…
Tag: Venture Capital
There Is Still Hope for Bitcoin
Mt. Gox has recently shut down and filed for bankruptcy, claiming that it has an outstanding debt of $63.6 million.1 The company, which was the largest Bitcoin exchange, disclosed that it had lost 850,000 units of Bitcoin, including 750,000 that belonged to customers.2 That amount is worth about $477 million, based on current exchange rates,…
Venture Capitalists Target Untapped Markets in the “MidBest”
Venture capitalists and entrepreneurs have recently started to make an unexpected move east from Silicon Valley to put down roots in an unlikely location: the Midwest.1 Historically, the majority of serious entrepreneurs from around the country have flocked to Silicon Valley and New York in search of easily accessible and trendy tech industry jobs.2 The…
The Popping Bubble of Starting Startups
So you have a great idea, an idea that will change the world. But you have a few problems: no money, no experience in managing any project, and absolutely no connections whatsoever. What do you do? Believe it or not, there are some companies (or startups) that actually deal with these types of startup problems….
WhatsApp Shows What’s Possible for Venture Capital Investors
WhatsApp is a cross-platform messaging service that is available on Internet-enabled devices. The app allows users to send messages via the Internet to other users of the app. The big selling point is that it costs 99 cents per year, with no added charges no matter where in the world a user sends a message….
South Korea’s Grand Plan: Startup and Venture Capital Steering the Future Economy
Start-ups have been a new force for the economies of many technologically advanced countries in recent years, more notably after the beginning of smartphone/ applications era with the many application start-ups that have an expansive platform to connect with customers. The number of Korean start-ups has almost doubled to over 28,000 from just over a…
New Faces in Venture Capital
Often, when we think of the people involved in financial markets, images of old, stodgy men come to mind. But this is not usually the case, especially in today’s modern venture capital markets. Especially in the technology industry, venture capitalists hope to get in on the ground floor of startups that will become “the next…
Royalty Financing: An Emerging Alternative to Equity Financing
Definition of Royalty Financing Royalty financing is an investment vehicle where the investor lends money to investees against its future revenue streams.1 The investor is repaid via royalties, a regular stream of payments that are typically calculated based on a percentage of the company’s gross revenue.2 Since repayments are based on a percentage of revenues,…
How Private Equity Can Hedge Their Bet with ObamaCare
The Affordable Care Act, also known as ObamaCare, came into effect earlier this year. Not surprisingly, ObamaCare has proven to be an extremely controversial and divisive issue. Many opponents of ObamaCare argue that the law will prove to be extremely detrimental to the economy by burdening companies with increased costs and regulations.1 The relevant topic…
The Caribbean Detroit: Puerto Rico’s Debt Crisis
Despite the severity of the debt circumstances in Puerto Rico, the financial crisis has gone largely unnoticed. The lack of attention on Puerto Rico is particularly shocking when comparing the crisis to the current state of Detroit. The island has a population of 3.7 million and debts of about $87 billion; this compares with a…