Startup Funding Explained – Seed Round and Stock Option Pool (Part II)

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– Startup Funding Explained –
After incorporating and dedicating time to the business, the fictitious company we’re analyzing in this series is doing great: The two founders managed to build the product, launch it, and are generating revenue.

Let's assume that our company is a SaaS business (software as a service).

It has $30,000 in monthly recurring revenue: that's customer subscriptions. It's also consistently growing at 10% per month, which translates to around 300% in annual growth.

What’s coming up for them? We’ll cover it in this episode!

0:28 – Seed Round
2:35 – Convertible Notes
4:40 – Stock Option Pool

#slidebean #startups #fundraising

📹Recommended videos:

Startup Funding Part 1 –
How to raise money? –
Startups Fundraising 101 –

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Startup Funding Explained - Seed Round and Stock Option Pool (Part II)

► Start with the right foot! Let us design your pitch deck:
https://slidebean.com/pitch-deck?utm_source=youtube.com&utm_medium=video&utm_campaign=video-content&utm_term=startupfunding
► Sign Up for Slidebean - 1 month FREE: https://slidebean.com/youtube
👾 Join our Discord server for weekly live interactions: https://slidebean.com/live


- Startup Funding Explained -
After incorporating and dedicating time to the business, the fictitious company we’re analyzing in this series is doing great: The two founders managed to build the product, launch it, and are generating revenue.

Let's assume that our company is a SaaS business (software as a service).

It has $30,000 in monthly recurring revenue: that's customer subscriptions. It's also consistently growing at 10% per month, which translates to around 300% in annual growth.

What’s coming up for them? We’ll cover it in this episode!

0:28 - Seed Round
2:35 - Convertible Notes
4:40 - Stock Option Pool

#slidebean #startups #fundraising

📹Recommended videos:

Startup Funding Part 1 - https://www.youtube.com/watch?v=Rho9S_Nn7YI
How to raise money? - https://www.youtube.com/watch?v=2BPfcnbmjIM
Startups Fundraising 101 - https://www.youtube.com/watch?v=njx09wXb9o0

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---- Caya:
Linkedin: https://www.linkedin.com/in/caya/
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YouTube: https://www.youtube.com/cayaphoto
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Comments

  1. I do not agreed that is debt and if convert later the founder loses too much. The investor must be there for good and bad time. Not only for good time.

  2. Hey! I will like to know how would it work for a Biotech company, as a big part of the first part is R&D, so FFF money might be not enough.
    Thanks
    Great channel by the way

    1. Thanks, Federico. Caya replies to these questions on Discord every week. Join him at slidebean.com/live 🙂

    2. Frederico, if you’re at the R&D stage working on a “hardtech” solution, I recommend becoming a student at a good University and using that to tap into their grants and sponsorships. I used to attend Michigan State University and we have an innovation center. If you’re working on cool stuff, they’d basically throw money at you to make it happen, and try to connect you with other early sponsors.

      A second option would be to join a good accelerator, like Techstars or YC. If you’re accepted to YC, they invest $150k @ ~7% and plug you into their Network of founders, doers, and investors. I will be applying to YC in a month (or less) for my aerospace technology. Take the time to apply strong, you have nothing to lose and everything to gain!

      I’m curious, at a high level, what are you working on? Good luck buddy.

    3. @Ozzy Explains thank you for your answer. I think we are inclined to option 2. It’s not in our plans to do a PhD and comeback to Uni. However, we are being supported by two professors at Uni, that are partnering in the development of our technology in their Labs.
      At this moment we are coursing the VentureLab course for Business in Biotech. Which is helping us to organize our plan of action. I will check Techstars and YC. We are located in Switzerland.
      We are working on Biosynthetic molecules.
      Best and thanks for the support

  3. Really valuable content! I’ll be pitching soon so you’ve definitely landed yourself another future customer.

    I know you guys touched on equity splits in one of your past videos… but, maybe an in-depth video on equity splits amongst founders could be fruitful? And how to determine what’s fair in regards to different circumstances? i.e. founders that join the MVP later than others, are part-time, provide less value, etc?

  4. 6:40 I believe its the employees who buy the shares at the strike price and make a profit, and not the company buying. Or I may be learning something new here, more info would be great.

    Great vid thou, keep up the good work.

  5. Not a single dislike. Exactly how I like it 😊. Thanks for that awesome discussion, I’m learning a lot from this series, and I’ll be pitching my tech starting next month. I’ll need some slides 😉🎊

  6. Caya before you and your co-founders got Slidebean, have you guys been employed?
    Being yourself a foreigner, how did you make money, survive and bootstrap your way up to where you are now?

    1. Hi, Jossiga! Caya responds to these questions on Discord… make sure you join us there slidebean.com/live… He kind of introduces this in this video https://www.youtube.com/watch?v=VapOhmvC8jk But, in short, Slidebean was not their first startup Caya was involved in. He and his founders started the company in Costa Rica and then it expanded to the U.S. 🙂

  7. I’m a little confused how the option is 500,000. When doing the calculation I got 480,000 shares. Could you detail how you got there

    1. Hi, Mason! Caya responds to these questions weekly on Discord. Make sure you join him there: slidebean.com/live 🙂

    1. @Caya With 30k MRR growing at 10%/mo, I’m getting 86k at the end of 1 year, or 185%. what am I missing?

  8. O boy!
    You are doing such an amazing job for new Founders.
    I got to know your channel later but saw your website first for creating pitch deck, the way you have explained the process and work flow it makes be confident to give you Business buying your service!
    Keep going buddy, you are doing amazing job and your con skills are outstanding.
    Good luck

  9. Hi guys great work, been binge watching your videos. One confusion I had was when we get in an investor, how are they usually paid back ? Is it with shares or do they expect to get shares and the loan money returned to them as well ? This was one part that confused me.

  10. There’s something wrong with your computation at 1:48. $30,000 x 12 x 5 is $1,800,000 only which is 18% of the chunk of the company. And $2,000,000 as you have stated is not 25% but 20% only.

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