Carta Collective

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Brent Devey
Community Manager
Carta
Salt Lake City UT
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I have a question for Alex:

We are a pre-seed startup looking to raise capital to get us through launch. We have a deep-pocketed acquaintance who has signaled they are interested in contributing a significant amount in exchange for equity (let's say $500K for 10%). They are not interested in using a SAFE or convertible debt and are OK with all of the equity being issued from Common Shares. This is a great problem to have, of course, but I'm concerned that this could adversely affect our 409A valuation when we go to issue options for our first round of hires.

Are there any strategies we can use to minimize the impact on our 409A?

Thanks for your question, Nick! I'll make sure to share it with Alex during the event on Thursday.

I have a question for Alex:

We are a pre-seed startup looking to raise capital to get us through launch. We have a deep-pocketed acquaintance who has signaled they are interested in contributing a significant amount in exchange for equity (let's say $500K for 10%). They are not interested in using a SAFE or convertible debt and are OK with all of the equity being issued from Common Shares. This is a great problem to have, of course, but I'm concerned that this could adversely affect our 409A valuation when we go to issue options for our first round of hires.

Are there any strategies we can use to minimize the impact on our 409A?

Thanks, Brent! Will this be recorded? Unfortunately I won't be able to attend until 2:30 ET 

Thanks for your question, Nick! I'll make sure to share it with Alex during the event on Thursday.

I have a question for Alex:

We are a pre-seed startup looking to raise capital to get us through launch. We have a deep-pocketed acquaintance who has signaled they are interested in contributing a significant amount in exchange for equity (let's say $500K for 10%). They are not interested in using a SAFE or convertible debt and are OK with all of the equity being issued from Common Shares. This is a great problem to have, of course, but I'm concerned that this could adversely affect our 409A valuation when we go to issue options for our first round of hires.

Are there any strategies we can use to minimize the impact on our 409A?

Hello, thank you for hosting this event!  Can you please add the question below to the queue for Alex!?

We are a medical device pre-seed startup (incorporated, but need to draft governance docs including stock purchase agreement and equity incentive plan) with about $300k of prospective Safe investors lined up once we formalize that process.  The question relates to equity for our initial team.  There are 2 primary Founders and 3 people who have been involved from early planning days and will likely be considered much smaller Co-Founders  but will need to provide ongoing services to the Company to support the initial equity grant.

We are contemplating  Founder Shares + ~20% incentive pool (EIP) pre Safes.  All shares will need a vesting schedule, including Founder shares.  But... would you consider including the 3 smaller Co-Founders in Founder Shares or in the EIP?  If in the EIP, it seems like they will eat up a decent amount of the 20%.  Are Founder Shares typically structured with different terms than EIP shares?

Thanks for any insights that you can provide!