Here’s a collection of tools I’ve created over the years to help startup clients. There’s a little magic here – but the real magic is in making these work for you and your facts. That’s the heart of the practice of law, and it’s where I provide real value.
Some of my colleagues wonder why I publish so much of this kind of resource. My answer is always that other good lawyers already know these things, and bad lawyers won’t get it right no matter what I put in front of them. As for clients and prospective clients, I think they like me because I’m the kind of lawyer who can and does build these materials from scratch and deeply understands the deep financial concepts, and the math used to express them, inherent in startup financing, valuation, and financial modeling. I think they also respect my knowledge, ever growing, of the inherent differences between programming and other common businesses. You can also see my post on “Why I write.”
Preferred Financing Calculations
This spreadsheet to calculate the price of a venture financing or seed financing round will help you look at different financing scenarios as well as begin to understand how venture math works. You can plug in a few founders, sketch out an option pool, and see how different valuations and round sizes affect the post-money situation.
Convertible Notes and Your Series A
This spreadsheet extends the traditional Series A calculations to show you how different caps and discounts on your convertible notes affect the post-money cap table. You can plug in different caps and discount rates and see how different valuations and round sizes affect the outcome.
Calculating Note Interest
This spreadsheet to calculate the amount of interest on a simple promissory note will help those of you needing to close the loop on interest, whether you want to pay it out or convert the note and interest into equity. It’s straightforward, but if you’re not comfortable with Excel’s interest functions, it’s much faster. Keep in mind that if your note has different terms, these formulas won’t apply precisely. And, unfortunately, most lawyers are bad at translating formulas into words and then translating words into formulas. So, please, check your work.