About this episode
Brian Dirkmaat discusses the legal mechanics of angel investing and the evolution of investment instruments.
Angel Academy Session 5 brings in Brian Dirkmaat, a startup attorney at Rimon, P.C and longtime SDAC sponsor, to walk the room through the legal mechanics of angel investing. Brian covers the full evolution of startup investment instruments - from the original bridge notes of the 1990s to today's post-money SAFEs - and breaks down the real differences between convertible notes, SAFEs, and priced equity rounds. The session goes deep on valuation caps, pro rata rights, the unresolved IRS question around QSBS treatment for SAFEs, and the practical tradeoffs between investing directly into a company versus through an SPV. If you've ever looked at a term sheet and wondered what you were actually signing, this is the session. Key Topics * The evolution from bridge notes to convertible notes to SAFEs * How YC's post-money SAFE works: valuation caps, discounts, and MFN provisions * SAFE vs. convertible note: the unresolved IRS code 1202 (QSBS) question * Priced equity rounds: Series Seed vs. Series A (NVCA docs) * SPVs vs. direct investing: platforms, carry, admin fees, and when each makes sense * The California C Corp trap: unpaid founder wages and W-2 classification * Term sheet…
People in this episode
Host: Neal Bloom
Guest: Brian Dirkmaat
Topics covered
- angel investing
- startup investment instruments
- SAFEs
- convertible notes
- priced equity rounds
- SPVs
- term sheets
Keywords
- angel investing
- SAFEs
- convertible notes
- priced equity rounds
- SPVs
- term sheets
- valuation caps
- pro rata rights
- QSBS treatment
Mentioned in this episode
Organizations: Rimon, P.C, San Diego Angel Conference (SDAC), YC, NVCA
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