If you’re starting your first company, understanding stock, preferred stock, options, convertible notes, and other fundraising instruments can be truly overwhelming. We didn’t find a single video that covered this, so here we go.
Startup Fundraising 101.
If you are an early-stage startup in the tech space and you are looking for money to grow your company, the official term is raising capital, the most commonly recommended instrument to raise funds is a convertible note. However, to understand how those work, we first need to understand how equity (or stock) works.
What is a Stock?
You are probably semi-familiar with the term ‘stock.’ A Stock is what represents the company ownership and it is distributed in parts to reflect how much of the company each owner possesses. Each owner, or shareholder, receives a certain number of shares of stock.
The number of shares a person or entity owns in the company, divided by the total number of shares that have been issued, reflects that person’s percentage ownership of the company.
A Stock is what represents the company ownership and it is…
