In looking at the history of angel groups and startup investing, a typical portfolio yields the following: the top 10% are big winners, 15% are medium winners, the bottom 10% go out of business, and the remaining 65% turn into lifestyle businesses that may be providing a nice income for the founders but will never provide a return for the investors.
So I decided to introduce the redemption right into the negotiations. It’s a convertible note structure that provides a 3X in 3 years using a redemption right at the investor’s sole discretion, which means the investor has the right to ask for 3X the investment at the 5-year mark (or three years). So $100K investment would return $300K.
The 3X in 3 Workshop Presentation will show how the deal structure works, including:
- Why use this deal structure for startup investing
- How the deal structure works (what the investor, startup, and TEN Capital do)
- How does the redemption process work
- Review of the Convertible note and the key terms
- TEN Capital Early Exit Facilitation Program and how it works
- Frequently Ask Questions
- Operational control factors
I’m glad to share this information with you and your investors over a zoom call in a 30, 60, 120-minute presentation format depending on how much detail you would like to see.
TEN Capital offers to put this deal structure on your next investment to provide you some insurance.
If you don’t negotiate the exit upfront, you’ll find it very difficult to do so later.