Hi Chase! Thanks for the insight - this is definitely helpful!
Right now we're a california s-corp, because until now we've been a security consulting company. Once we made the decision to spin up a saas security platform, we started development hoping we could take the profits from the consulting business and pipe that into the saas platform, but that didn't work out the way we wanted. After consulting nearly a dozen colleagues who have taken investment, we've reconfigured our direction - we're spinning up a whole new entity for the saas platform, and we'll ramp down the consulting once we get funded. Currently the platform exists, and it's in what I want to call an 'advanced beta'. It has a handful of subscribers, but we haven't made a big push to start creating a sales funnel yet - we want this thing to be performant, effective, and raise eyebrows, so there's a bit of polish it needs before we can go big. For that we need several developers, and for them we need funding.
The restructuring comes from a bit of trapeze act we have to do: the IP was developed under the s-corp, so we need to transfer it to the new entity. We're currently working with Morrison Foerster to help us with that end of things. On the upside, the cap table is just myself and the other cofounder, so from that perspective I would hope it would be pretty attractive!
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Dan Tentler
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Original Message:
Sent: 09-23-2022 05:52
From: Chase Emanuel
Subject: Welcome to the Founders Lounge!
Hi Dan,
When you say restructuring, are you talking about converting the company from an LLC to C-Corp or something more complex? At the end of the day, you want to optimize for keeping your cap table clean.
I actually looked very closely at a direct competitor of yours a little while back and really like your space! The team was strong. Their customer pipeline was healthy. They had some great logos and good conversion rates for an early stage company. Ultimately, however, I had to pass on the opportunity because the company had given away too much equity in the previous round of funding, and this presented a real risk that the founders would not be incentivized enough to take the company to a venture scale outcome because they'd be too diluted to see any material upside themselves.
What I'm generally seeing in market these days:
Pre-Seed: $500K-$1M for up to 10%
Seed: $2.5M-$5M for 20%
Series A: $10M-$20M for 20%
Slide below is a little dated but directionally accurate.
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Chase Emanuel
Original Message:
Sent: 09-21-2022 13:17
From: Dan Tentler
Subject: Welcome to the Founders Lounge!
I actually have a fundraising question, if anyone has insight:
We're currently in the process of restructuring the company to be more favorable to investors. Is it safe to talk to investors now, and setup pitch meetings, or do these things move more quickly once all the reincorporation and business structure is done? It's so far been gruelingly slow waiting weeks for folks to have openings, or for lawyers to review stuff. I was hoping to be more useful during the downtime and at least try and setup vc meetings.
Original Message:
Sent: 9/21/2022 3:33:00 PM
From: Nikhil Jain
Subject: RE: Welcome to the Founders Lounge!
Hi - I am Nikhil Jain and am co-founder of Pasadena-based https://valdi.ai/ which is one of the contributors of distributed machine learning technology BWS: https://bws.xyz/ . Valdi caters to startups in the Artificial Intelligence space and offers them low priced high performance compute for their Machine Learning at a very low monthly fixed price (Netflix model instead of Blockbuster). We are powered by idle compute consisting of GPUs, ETH GPUs, gaming rigs, Macs and desktops at home and offices and thus avoid wastage by reducing need to create new compute hardware. If any companies employing ML would like to give us a shot, please DM me.
Long time user of Carta and glad to be here to connect with other Founders and entrepreneurs in this community. @Brent Devey thanks a lot for the invite and for putting this great community together.
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Nikhil Jain
Original Message:
Sent: 07-26-2022 10:32
From: Brent Devey
Subject: Welcome to the Founders Lounge!
We're so excited to welcome you to the Founders Lounge! My name is Brent Devey and I'm Carta's Community Manager. I've worked in community, social, and support for Carta, Purple, and JetBlue for the past 10+ years. I hope that this will be an important and helpful community for you as you grow your business.
My goal is to make this space as helpful and meaningful as possible, to offer up relevant content, and help you understand how you can best use Carta as you grow your business. I'd invite you to take a moment and watch this introductory video from our VP of Delivery, @David DeMarco. He'll tell you more about what we hope you accomplish while being part of this community.
We'd love to get to know you better! We invite you to introduce yourself in the comments section of this post. Once you've done so, please add your info to this Google Form and we'll send you some Carta swag in the mail.
Be sure to check back this week and next for helpful content, introductions, surprise and delights, and more! Thanks for being a part of the Founders Lounge!
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Brent Devey
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