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It is rare that a company begins marketing a first institutional-priced equity round alongside a converting note with a pro-forma "as converted" cap table in-hand.
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Today, Rex Animal Health's platform lets the people who raise cattle, pigs, chickens and any other animals in the food supply chain keep a digital record of their health issues, even converting notes on paper into digital data.
Smore, a platform for easily creating single-page promotional websites and TechStars Seattle alum, today announced that it has raised a $1.7 million seed round (including converting notes) led by Founder's Co-op, with participation by Greylock Israel and various angels.
Multiple series of notes can create "dilution waterfalls" and hamper future priced rounds, as large portions of the pie have already been carved out to founders, converted note holders and Series A investors.
(Part of that money was raised last fall via a convertible note; Sawyer converted that funding into equity and closed on some more this past Friday).
Indeed, it was IA Ventures that told the company to apply to TechStars (which participated in this round because it converted its original convertible note) in the first place.
The loan (often called a convertible note) will convert into equity at the startup's next funding round on the same terms as the new investor (i.e. no discount) and will not be interest bearing.
Not surprisingly, most of my convertible note holders eventually converted their notes into stock.
Now, during panics, depositors would scramble to turn their account balances into government-issued currency (instead of converting bank notes into gold).
By converting the notes and locking up investors in the preferred, ABFS can put off this short-term problem for two years.
Cascade can convert the note into Gabelli shares at $53 a share, a 21percentt premium to Gabelli's Friday closing price of $43.78.
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