

Water Front Apt. in San Mateo will trade for equity in Y Combinator startup - freemanindia
http://sfbay.craigslist.org/pen/apa/1125325885.html

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pg
Clever. If anyone takes this deal, do it as convertible debt, which makes the
paperwork much simpler and avoids setting a valuation.

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param
This guy : <http://altgate.typepad.com/blog/2008/06/5-reasons-conve.html>

seems to think convertible debts are a bad option. Would someone explain why
both he and pg are potentially right in their own ways? (don't know if that's
the case, but usually ends up being)

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immad
PG is probably referring to a capped convertible note.

On a capped convertible point 5 is completely negated.

Point 4 is not relevant. Since preferred comes first any way.

Point 3 is a reason to do convertible note.

Point 2 is a good point. But you really don't want to be negotiating terms on
Series A (which are complex) with an angel that does not deal with them every
day. If the angel is willing to just accept what you give them then maybe that
is a valid point against doing a convertible.

Point 1. At least at the time of raising the convertible note it costs about
10th of the lawyer cost as a series A. Maybe the lawyer cost is higher when
converting it, but presumably you care less about lawyer costs at that stage.

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drusenko
besides the fact that for point 2, your Series A investors will most
definitely renegotiate to whatever they want, anyway.

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SwellJoe
So, six months worth of rent is only $9600. I'd be hesitant to give up any
amount of equity for such a small sum. YC gives small sums...but not that
small, and, of course, YC gives a lot more than money.

Very clever marketing though, and seems like a pretty cool guy with an
interesting background. But, I'll point out that it's not hard to find cool
people with tech backgrounds to rent housing from here in the valley, if you
opt to rent from individuals rather than big apartment mega-complexes. I ended
up in a house owned by an early PayPal employee who now helps setup tech
conferences; he's been very useful and pleasant to talk to.

Then again, there probably is something to be said for doing this in a made-
to-flip company. Spend as little as possible, build as fast as possible,
design your life around avoiding hassle during that period, make something
great, make as many connections as you can, and get out rich. This would be
pretty useful in such a case. A couple points in a company that you hope to
sell for high hundreds of thousands or low millions wouldn't be a bad trade at
all.

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uuilly
I'm in a similar boat. I have a founder / angel landlord. He recently wrote me
a letter saying that he raised rent on everyone but me b/c he likes what I'm
doing and know's it's tough out there.

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SwellJoe
OK, mine isn't _that_ nice. He raised the rent by $150 a few months ago.

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prakash
Here's some info on Freeman's profile:
<http://www.linkedin.com/in/freemanmurray>, you shouldn't be surprised he
understands YC and the power of equity!

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khangtoh
Will you trade for equity in startups that were not accepted into YC? We'll be
moving to SF in May and launching sometime end of May/early June.

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prakash
Would you accept equity from the iaccelerator program participants as well?
How about trading it for some karma on HN? :-)

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rantfoil
Equity is for life. It's a bum deal to trade equity in your company for a
small amount of cash, unless whoever you're selling to is a real value-add
investor or advisor who can contribute more than money for the LIFE of your
company, not 6 months of petty cash.

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bigbang
He is a real value-add investor than most of the angels :) He has sold a
company, founded a couple , worked with many startups/incubators etc...

~~~
jsrfded
ditto...I have met Freeman, he is a good guy, and he's been through the
startup grind and is entrepreneur-friendly.

The area around his apartment is walking distance to a great complex with a
ton of pan-asian restaurants... pho, korean, huge chinese grocery store,
malaysian, chinese.

