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…
Author: Justin Montis
Hedge Funds: A Solution to the Collective Action Problem
There is a collective action problem in any system where an informed vote is costly to a shareholder.1 Such a collective action problem is present among shareholders of publicly traded companies in the United States.2 Small shareholders are rationally apathetic in their voting decisions because they assume (usually correctly) that their vote will not change…
VC Firms and Non-Disclosure Agreements: A Changing Landscape
Traditionally venture capital (“VC”) firms looking to add potential portfolio companies have been unwilling to sign non-disclosure agreements (“NDAs”) during initial discussions with entrepreneurs about their technologies and execution strategies. This unwillingness from VC firms to sign NDAs stems from a number of reasons, “including a desire to avoid restricting their ability to seek out…