Friday, November 17, 2006

Financing Terms 101

I was recently discussing our company's financing plans with someone on the team and it hit me that the topic of financing and the terminology associated with it is one of the areas of great intrigue and questions for the folks inside not associated with the process. At one point, I came across a good cheat sheet from our counsel Ted Wang at Fenwick & West that I thought I would share.

Btw, for those of you who are in the early stages of forming a company, I'd recommend you put together a cap table with a written down understanding of the founding team's equity split as soon as possible. This can save you a lot of frustration and misunderstandings later on in the company's evolution.

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