Bridget Greenwood

Hidden Trap Of Convertible Note and Liquidation Preference Multiples. Young entrepreneurs often get screwed by their angel investors on convertible notes and I know I can’t convince you not to do it so I’d like to offer one simple bit of advice to help you avoid getting screwed. 🤐 When you do a convertible note with a cap that converts into the next round of funding, one of the unintended consequences is that if you’re successful and raise at a larger price than your cap the early angels often get “multiple liquidation preferences” on their dollars in. Here’s how it works: 💡 - Let's say an angel invests $500,000 with a $5 million cap. That means they'll own at least 9% of your company if the conversion price exceeds the cap. If you raise funds at a lower price, their ownership goes up. - Now, with a regular 1x liquidation preference, they'd be entitled to $500,000 if you sell the company for less than $5 million. If you sell for more, they'd rather take their ownership percentage instead of that liquidation preference, which acts like a safety net. - Fast forward, You work your tail off for 18 months, securing a series of notes, and guess what? You're lucky enough to land $5M at $25M pre-money valuation. At this point, that early angel investor owns around 16.67% and probably still holds a 1x liquidation preference. - Now here's where the trickery starts: When the initial note converts, instead of snagging a $500,000 liquidation preference, they'd cash in a mind-boggling $2.5 million liquidation preference—a whopping 5x increase! If a VC pulled this move in an early-stage deal, their reputation would suffer, making it hard for them to work with other VCs or entrepreneurs. In VC financings, this term is clear, but on convertible notes, it happens subtly, catching entrepreneurs off guard – a silent and painful setback. So here’s what every entrepreneur should add immediately to any convertible note 😎 "If this note converts at a price higher than the cap that you have been given you agree that in the conversion of the note into equity you agree to allow your stock to be converted such that you will receive no more than a 1x non-participating liquidation preference plus any agreed interest." Papering this when it converts is super easy if the angel has already consented to it and they are not being cheated at all. They get their full investment as a 1x liquidation preference. And please don’t let any angel try to convince you they deserve more for the early risk. The early risk is why they get a cheaper price. 😁 You can also checked “liquidation preference overhang” by José Ancer article to read more about it. (Link in comments) 👉 Check out my free newsletter for more insights: https://lnkd.in/dKZQKHg2 . #startups #funding #VC #investors #founder #entrepreneurs #founders #entrepreneurship #startup #fundraising #termsheet #fund #venturecapital #angelinvestors #angelinvesting

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I always seem to "shout" through my 1-minute pitches! 😅 LAUNCHLEMONADE! MONETISE YOUR COPILOTS! BUILD AGENTS ON ANY LLM! AI! Huge thanks to David Goldstone and the VOCASO Team for inviting me to pitch LaunchLemonade in a room packed with potential collaborators, partners, and customers! It’s not my first public pitch—though I’m no pro and every time I get so excited, I end up "shouting" through the whole thing. 🙈 The good news? It works! People always leave curious about the product, and I walk away with some solid leads. So, what are we pitching? We're on a mission to ensure NO ONE gets left behind in the age of AI. Let’s make sure everyone can benefit! Want to learn more about the 🍋? Visit our website! Link in the comments.

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After working with lots of founders at Toola Finance, I’ve noticed a common trap we all fall into—and one I’ve been guilty of myself: "Busy, being Busy". Here’s how to avoid it before it derails your startup. Too often, as founders we spend a significant amount of time on “Busy work” which is unavoidable administrative work which keeps you busy but dosen't actually move your business forward - founders have a continuous dilemma of splitting their time between “Busy Work” and “Real Work”. “Real Work” is what drives your business forward which is the real “Main thing” founders should focus on - which is usually improving your product, improving service quality, talking to customers & sales productivity guru, Stephen Covey perfectly explains “The main thing is to keep the main thing the main thing” Here how to identify “Busy Work”: Audit your time by categorizing tasks as either strategic, operational or adminstrative. Admin work:  If it’s not helping your business grow or solve a core problem, it’s likely busy work! spending time reading through an endless clutter of emails, tweaking minor details in a deck like colour/ fonts etc. wasting time on scheduling or organizing tasks Essential expert-led work: work that is essential but requires expertise to execute, as a founder you shouldn't be wasting time acquiring this knowledge, this includes: regulations/compliance filings - across TDS, accounting, tax filings, tracking finances and costs The only effective way to deal with this is to set up a system/ process to automate it or find and delegate this to experts freeing up time and mental space to focus on the “Main Thing”. P.S. Want to learn how other founders are leveraging tech and AI to master their finances? Follow Manoj Gokaraju for insights and join my mission to deliver better financial outcomes for founders

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Are VCs and Founders Getting Along? The relationship between founders and investors is becoming increasingly strained, particularly during economic downturns. Sifted surveyed with the #founders back in 2023, and here were the key outputs. 51% of surveyed founders responded that they’d been getting on worse with their investors since the downturn hit. Valuations started getting slashed, funding began drying up and investors abruptly switched their interest from growth (at all costs) to profitability. 86% of surveyed founders said that they were under more pressure to prioritize profitability/revenue compared to 2022. Investors are scrutinizing founders more closely (micromanaging more than ever), at times leading to conflicts over business strategy and decision-making. Founders are finding it difficult to maintain open lines of communication with investors, leading to misunderstandings and frustration on both sides. Founders are keen to find alternatives to VC cash, with many complaining about investors dragging their feet on pumping fresh funds into the business. 78% of surveyed founders had been advised by their investors to make cutbacks in 2023, with over half being told they should reduce their headcount. However, the silver lining is that 61% of surveyed founders did confirm that their investors had been more empathetic in the downturn.

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What the Founder Found in 2024... 1. First, the worst A. There's a whole ecosystem set up, funded and incentivised around founders, and a whole lot more offering their services to founders. So often, their rewards are not linked to your success, but to your presence. There's a whole lot of frogs 🐸 in this ecosystem and few princes 🤴. Don't show up to enable someone else to get paid just because you're on the list. What value do they bring? What's their contribution? If I was paying for the existence of this eco system, I'd include some incentives, just some, for entrepreneurs' success. B. Closely linked - When I first started to create Myfolks back in 2019, I joked that I could only get on if I was wearing chinos and a white shirt, with floppy hair and a fintech solution. I was wrong, in two ways - I can get on because the problem Myfolks addresses may not be very glamorous - but it is huge; and secondly, my joke wasn't funny. I failed to identify what I'd spotted - conscious and unconscious bias - I didn't know then that only around 2% of women founders get funded. I've found that spending a whole lot of time on grant seeking isn't the best use of time. I am concentrating on pulling Myfolks up by my bootstraps. 👢 Second, the best... C. I found my people in 2024. The NHS Clinical Entrepreneur Programme admitted around 12 of us as Patient Entrepreneurs. I've spoken at length about the benefits of the Programme - it brings the opportunity to learn but also brings access along with some healthy challenge, it is awesome but the people, oh my, the people are amazing. Although we could have been very much on the periphery, as Patient Entrepreneurs (mine being as a carer for my elderly parents), it hasn't been that way at all. It's a huge group of people who are willing to go above and beyond their day jobs to try to improve to people's health. I am pretty sure we were described on the Programme as those who've been weird and troublesome in all other forums. Here, knowledge, support and encouragement are shared more freely between the founders than I've ever seen, anywhere. Margaret Mead said that a small group of committed individuals can change the world, indeed it is all that ever has. This group, with fabulous leadership and management in NHS England and Anglia Ruskin University, will surely succeed. D I found more of my people - the strong individuals that have been with me in the first wave where our parents have lived longer, but not always well. The challenges faced in being ill-prepared for what was to come; the impractical housing, challenges in finding & affording care at home, the struggle to balance caring/working. We are emerging - like those from the apocalypse films - damaged but survivors. We can see ways to make it better. We are finding each other, through platforms like LinkedIn, building a community to make it better - Desi Daughters, Care Forward, Kelley Irwin. Find growth & success in 2025!

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This is not the responsibility of venture capitalists. More indiscriminate 1 million dollar grants need to be handed out so we can get that from 0.5% to maybe 5%. The government isn't the best at capital allocation. This is a sore spot of capitalism at the moment, wherein truly innovative ideas(or just different/non-validated founders but might work) don't get funding from anyone(too risky for VCs, not grant worthy from Gov, too high interest loans). This is a problem which is my responsibility to solve as well and I don't have a solution. How would you solve?

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Eventually, all of venture will be available to anyone who has alignment and desire to invest or support in what they hope to be a future they dream of - Community VC will be where all of their journeys begin. ✅ We’re going to build the place where discovery, nurturing and engagement starts for all private deals. But first! We need to start eating our own dogfood and bringing people on the journey courtesy of the smarts I commonly hear from Jason Ming and support we receive from our amazing early believers Sara Gray Roseanne Healy Pippa Smith Claude MICHEL Jordan Duffy Gordon Tan Jonathan Lui Tim Noakesmith AJ Milne Michael Cotton Nathan Molenaar 💫Here's a start to our/my why💫 For 18 years I’ve been an entrepreneur. I’ve started and sold, started and destroyed, started and merged my own companies. I’ve also angel invested in more than 40 early stage start-ups. Whether I’ve been rich or poor or in between my love for start-ups, founders and extraordinarily smart people with visions has never wained. Throughout my own journey, I’ve learnt how important having people around you with skills in your gaps, connections you may need and the belief in you is as important as anything else for a founders journey. Since actively Angel investing In 2014, I’ve been particularly interested in how you can build and leverage communities to surface the best insights whether it was for decision-making as a founder or truly getting an in-depth insight to validate an investment idea. Over the last three years I’ve been working in-and-around the problem space of early stage venture capital raising and advisory – and how finding your early believers is such an incredibly important role that is often missed on that journey. Too often founders jump from vision + friends and family straight to angels/syndicates/VC’s which means they are almost always too immature, haven’t created enough signal for interest, and don’t have a layer of support or connection needed to thrive rather than survive. If you look back at any successful founder's journeys they’ll tell you about early believers who acted as core catalysts for help, introductions and capital. The most interesting thing about those early believes is that they never identify as investors or advisors. They are always operators that have parallel interests. So if over 20% of early stage startup failures come from not having the right strategic capital – why does it keep happening? The answer is, that to uncover those people in the current system takes luck. But it won't for long.... If you'd like to read it all, please feel free through the link below 👇👇👇

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Talking less = a better chance of securing funding. It's really easy to lose an investor's attention- and you could be chatting your way to a no. Aim for a 50-50 balance (talking-wise) in your investor call, and please don't read your deck out to them on the call- stick to the highlights. You can check out the full vid on first investor calls here: https://lnkd.in/eJH27UVr Check the comments for the playbook for nailing your first call with an investor

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Let’s face it, Dragons’ Den is an entertainment show, it’s nothing like pitching for funding from real venture capitalists. We don’t sit in a room surrounded by stacks of cash, making investment decisions in five or ten minutes after asking a few questions. In reality, the VC process is far more thorough and rigorous. We evaluate a complex range of performance indicators before making a decision: • What’s unique about the product? • How will the company acquire customers? • Does the team have the right experience and drive? • Is the valuation fair and justified? • How strong is the company’s financial performance? • What’s the exit strategy? These are the serious questions we ask to ensure we’re backing businesses with real potential. If you’re curious about what it’s really like to pitch to a VC, check out Boxseat, our YouTube channel dedicated to discovering the next generation of entrepreneurs. Link in comments At Boxfund VC, we’re committed to investing up to £1 million in purpose-driven brands. Businesses that don’t just want to build successful consumer products, but also aim to create a better world.

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First Priority: Founder First duty: Protect The Founder at Foundership

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"I overpaid £2M. Outdated valuation cost me dearly. Never again." Sadly this happened to one of our clients, who overpaid by £2M for a company that couldn’t deliver on its promises. Imagine investing in a promising tech startup, convinced by their impressive pitch and glowing projections. You go ahead with the deal based on an outdated valuation. Six months later, the market shifts, and the startup's growth stalls. The outdated valuation didn’t reflect current market realities or potential risks. By the time the issues became apparent, the money was spent, and the return on investment wasn’t forthcoming.   This painful lesson underscores the importance of accurate, current valuations. They provide a realistic picture of a business’s worth and help investors make informed decisions. At bizval, we interrogate every aspect of a business’s financials, market conditions, and potential risks to safeguard you from overpaying and ensure your investment is sound. The takeaway? Always base your investments on thorough, up-to-date, and trusted valuations. It’s not just about avoiding losses—it’s about making smart, strategic choices.   Stay informed. Know your value. Make wise investments. P.S. Update: Our coaching at Outcomes Business Group UK has empowered the new owner to revitalise the business and set it on a path to success. Together, we have developed efficient new routes to market, built strong trust within the marketplace, and fine-tuned the services offered. With a dedicated and powerful team executing flawlessly, customers are now delighted and wholeheartedly supportive of the business. #BusinessValuation #SmartInvesting #Entrepreneurship #StrategicPlanning #BusinessGrowth

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I absolutely love what I do. This is why. Check out https://lnkd.in/dTP2tpc - for people asking me "what keeps you busy" - this. "Hi Alpesh, Last time we spoke was at the GIP [Great Investments Programme] dinner event at The Strand. We discussed my investment journey and how you would best approach entering the industry. Following your advice, I now Chair the UK's largest student managed fund of $300,000 AUM, have interned in buy-side Equity Research, and run my own investment portfolio - up 44.5% since inception 12 months ago (S&P up just 19.5%). My investment approach was founded on your principles you use to invest at Praefinium Partners, and has slowly developed to a more granular criteria over the years. I believe the way we see investing is extremely similar. I write to ask you for just 20 minutes of your time, over zoom, or perhaps in your office. I am constantly looking to learn and develop more experience. My schedule is flexible and I would be able to cater to any time that would suit you best. Thank you again, Alpesh. My investing journey would look far less favourable had I not found your content when I began my journey a number of years ago. All the best,"

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Some great resources for small businesses that I've found this week: 1. Pre-registration is open for the 2025 cohort of Rising Stars, Tech Nation’s pitch competition for early-stage tech startups. Finalists will get the opportunity to showcase their business at London Tech Week plus a bunch of other exciting prizes. https://buff.ly/4bVEDrE 2. PwC are taking expressions of interest for their PropTech networking accelerator. Scale | PropTech is aimed at helping to speed up business growth and make a difference in the real estate industry by connecting scaleups to their comprehensive network of industry leaders and decision-makers. The course is 10 weeks and will support 10 scaleups. n.b. I'm a little unclear on actual start dates. https://buff.ly/3yat0PI 3. The Universities of Bath, Bristol, Cardiff, Exeter, Southampton, and Surrey are accepting expressions of interest for SETsquared. A joint partnership based at their Incubation & Acceleration Centres, it offers ongoing Business Acceleration Programmes to help students, academics, entrepreneurs, or start-up founders validate their thinking, build a team, find start-up funding and launch an investor-ready business. https://buff.ly/4fhRkzL (Fun fact: I did my undergrad at Southampton) I collate interesting resources (a lot of them are free ones) for early-stage companies and share them in my bi-weekly newsletter, The Operating Table. Subscribe here to get helpful resources like this in your inbox for free: https://buff.ly/3KwPr47 ---------------- #startups #strategy #operations Hi, I'm Milly and I help founders win. I believe everyone deserves a chance to make their entrepreneurial dreams a reality and Pay As You Go COO was created to help that happen. I’m an expert company builder, and I want to help you beat the odds and build a business that’s destined for success without breaking the bank.

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Alright, who else has seen this new startup buzzword floating around? Paul Graham's got everyone talking about 'manager mode' vs 'founder mode'. It got me thinking about my own experience... The best founders I know? One minute they're dreaming big, the next they're deep in the day-to-day grind. And they make it look easy. But let's be real - it's a tough balance. Push too hard on the management side, and suddenly you're the overbearing boss nobody wants. Your team's creativity takes a nosedive, and your rockstar employees start polishing their resumes. The key is finding that sweet spot. You want to be involved enough to keep things on track towards achieving the big vision, but not so much that you're stepping on everyone's toes. It's not about picking a side in this 'mode' debate - It's about knowing when to wear which hat.

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Are you looking for investors? At foundercentre we have a FREE interactive directory of over 240 UK INVESTORS! https://lnkd.in/ekYQBPZF Filter through which investor best suits your startup needs, and simply start sending applications out. Create a startup profile, and showcase it now! We use specific, targeted questions during the signup stage to ensure that all profiles contain the relevant information in a standardised format for Investors. No more sending back-and-forth emails. Simply copy and paste your unique URL- and Investors can see everything they need about your startup. At foundercentre we are the only FREE startup site to contain centralised directories for everything a UK startup needs. From Investors to Co-Working spaces, founders can now find everything they need, with the click of a button. Grow your startup now for free... #foundercentre #investors #startups #founder #startupspace #ideas

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A few weeks ago, I spoke to a founder who sounded depressed because he wasn’t able to raise capital. He’s a smart lad who is building a tech business. Unfortunately, things weren’t going well for him. Most of us have these existential doubts from time to time, especially founders and entrepreneurs. We feel we are no good and we wonder what are we doing with our lives. I’ve failed in 90% of my endeavours – side hustles, job interviews, internal projects, college exams (not exactly failures but poor grades) and business initiatives at Tremis. Yet, I’m alive, kicking and enjoying my life. Don’t let failures destroy your happiness. As a founder, you’re bound to fail 10x more than you’ll succeed. Even the most successful founders fail more often than they succeed. The way forward is to try different things and double down on anything that works. All successful #founders follow this rule. If you try enough things, something will click. You just need one big win to get started.

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13books Capital have closed a £121 MILLION fund to fuel the next wave of fintech disruptors 🚀 👏 📲 Continuing their commitment to backing VISIONARY founders reshaping the future of financial services, the new fund will enable 13books Capital to continue supporting the best AND boldest founders who are building tomorrow’s financial technology. 💰 🌐 Investments will primarily be made at Seed to Series A stages, with ticket sizes ranging from £1-7 million and founders benefit from the firm’s NETWORK of 34 world-class founders and industry leaders, such as Limited Partners (LPs), who provide unparalleled entrepreneurial experience, connectivity, and expertise! 👨‍💻 Michael McFadgen Partner at 13books Capital, stated, “It is clear that European fintech entrepreneurs desire a sector-focused, founder-focused venture platform that has meaningfully impactful networks across the industry. We believe European fintech is entering a golden period, and we thank our LPs and founders for their trust and look forward to supporting the next generation of pioneering fintech entrepreneurs.” Find out more on the link below! 👇 #13books #fintechfund #fintechnews #fintech #financialservices #entrepreneurs #fintechecoystem #finanacetechnology #seriesa #seedfunding

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Want to angel invest but have NO idea where to start? Join us on the 24th September for our first event in our Mind the Gap series: designed to break gender investment barriers. Our first event will be looking at how we can encourage more women into angel investing, and why it's pivotal for the start-up ecosystem. Nick Telson-Sillett, Jenny Tooth OBE, Kirsten Connell and Oksana Stowe will be talking about all things angel investing: 😇 Why it's so important for women to angel invest 😇 Common barriers to entry - and how to beat them 😇 Practical ways you can get started Want to attend? Link in comments, but hurry, there's only 10 tickets remaining - get them whilst they're hot 🔥

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