“Safe” Rounds

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There is a new bridge round called a “safe” round.

Entrepreneurs, know this: When a financial person comes at you with an “interesting” new way to finance you…….you better look closely.

I am not ascribing malice, but this is a rename for a bridge round convertible note. I would love to see the terms of that “convertible note” if it does not convert at a price above the current valuation. Everything you do other than straight equity has the possibility to come back and bite you in the ass. HARD.

I’ve learned this the hard way. You can learn the easy way.

Entrepreneurs understand this……there is a good chance that not only don’t you know the rules of the game, you don’t even understand what game is being played.

The biggest mistake I see entrepreneurs make is looking at a valuation number and confusing that number for cash in the bank. Cash in the bank is a cold new $100 bill in your pocket. That Franklin has no terms and conditions.

When you have literally pages of terms and conditions attached, it is not cash.

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