500 Kobe Pre-Accelerator Demo Day >> Neil Dugal, 500 Startups, Corporate Counsel
Guidance on the various legal structures for venture capital investments
4. Typical Investment Round
Investors
Cost for Founder
Cost for Investor
Difficulty Level
Time to Close
Ignorance Level
Need Lead Investor
JPY 500,000+
JPY 500,000+
HIGH
3 Weeks+
High
Seed Round
Seed Round
5. J-KISS
Investors
Cost for Founder
Cost for Investor
Difficulty Level
Time to Close
Ignorance Level
Anyone
JPY 50,000+
JPY 50,000+
Low
2 days+
Low
J-KISS
Seed Round
6. How Does J-KISS Work?
DEBT EQUITY
Investor
“Lends” Money
to Company
Company Sells
Shares to
Fundraise “Debt”
Converts
into
Shares
“Debt” Converts at
a Substantial
Discount
7. J-KISS Key Terms
Key Terms
Maturity Date
Interest Rate
Discount
Valuation Cap
Minimum Fundraise
Acquisition Premium
None
0%
10% - 30%
JPY100,000,000 +
JPY 100,000,000 +
2x or Ownership %
Convertible Note - KISS Debt
8. How Discount Works - Example
Company
Raising
Series A
$20m
Pre-Money
Valuation
$2.00
per
share
Investor
Invested
$1m
20%
Discount
80% of $2.00
625,000
Series A
Preferred Shares
Invested
$1m on
J-KISS
$1.60
per
share
9. Valuation Cap Works - Example
Company
Raising
Series A
$20m
Pre-Money
Valuation
$2.00
per
share
Investor
Invested
$1m
$10m
Cap
$10m is
50% of
$20m
1,000,000
Series A
Preferred Shares
Invested
$1m on
J-KISS
50% of
$2.00
is
$1.00
per share