Source: https://ytechrunway.com/pro/article/1048
Timestamp: 2019-07-22 18:19:58
Document Index: 71692696

Matched Legal Cases: ['art 1', 'art 2', 'art 3', 'art 4', 'art 5', 'art 6']

If you missed Part 1 (Making it Official: Incorporation), Part 2 (Who's Who and Who to Hire), Part 3 (Division of Labor), Part 4 (Picking a Supporting Team), or Part 5 (Protecting Ideas: Intellectual Property) - be sure to check them out. Otherwise, we are proud to introduce Part 6 of this series: Money, Money, Money: Funding.
Other times, investors (friends and family, or outsiders) will choose to put money into a new company in exchange for a promise of future equity. This type of investment can take the shape of a CLA (convertible loan agreement), a convertible note, a SAFE (we'll discuss elsewhere), a KISS (keep it simple security) and other types of agreement. If a loan or other form of convertible investment is given, instead of getting repaid, the investment is used to buy shares of the company later down the line, when the company undergoes a more significant financing. There are typically conditions in this type of investment regarding what class of shares it will convert into, when, and at what price (often, the company will offer a discount on the price per share to investors, in return for them taking a chance on the company, and a maximum valuation upon which the price per share can be based, called a "cap"). There are also terms regarding what happens if the company runs out of money, or if it has an exit before the investment can convert.