The Top Conflicts Between Existing Investors and New Investors

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There's going to be two or three of these we might as well put them on the table here and then after we discuss what the conflicts are how the resolution gets done practically speaking. One of the the biggest ones is going to be at the board level right like any transaction any financing transaction has to get approved by the board. We're talking about significant down rounds here. Quite often they're insider led lots lots lots time they're insiderLed. The existing investors may think okay maybe we did overpay in that last round and you know the company's not where we expected to be your macroeconomics.

Todays show:

Wilson Sonsini Partner Becki DeGraw joins Jason on the latest edition of Startup Legal Basics! In this episode, they break down legal standards in the startup ecosystem(2:19), SAFE agreements and convertible notes(5:41), conflicts faced by founders and investors(20:58), and much more!

Time Stamps:

(00:00) Wilson Sonsini Partner Becki DeGraw joins Jason

(2:19) Breaking the box or sticking to widely accepted frameworks

(3:47) General trends and the adoption of safe agreements

(5:41) Differences between SAFE agreements and convertible notes

(10:34) Companies that raised high valuations during a hot market and need to raise funds again

(15:43) The impact of down rounds and pay-to-play provisions on investors, founders, and employees

(20:58) Conflicts faced by founders, existing investors, and new investors

(27:58) Surviving down markets

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