Startup Showcase Live Investment Terms
Startup Showcase Live Finalists have the opportunity to raise $500,000 USD fromCatalyst by Wellstar, Front Porch Venture Partners, Knoll Ventures, Las Olas Venture Capital, and TiE Atlanta Angels (the “Showcase Syndicate”). This is the summary of our investment terms. Specifics may be varied to accommodate local law and custom.
$500,000 SAFE Note Investment
After being chosen as the winner, the Showcase Syndicate will invest $500,000 USD in exchange for a standard post-money SAFE Note (“SAFE”), payable after the event and subject to the company’s satisfactory completion of our due diligence and a fully executed investment agreement.
• Conversion at Qualified Financing
• Preemptive Rights
Pro-rata rights to allow the Startup Showcase Live syndicate to continue investing in subsequent investment rounds of your company. This right is assignable to allow the participants of the Syndicate or their affiliate entities to participate in seed or later rounds. The preemptive right terminates when the investors in the syndicate are granted the same or substantially similar preemptive rights issued in connection with a Qualified Financing or upon the Company’s IPO or sale, if earlier.
• Information Rights
Quarterly operating metrics, cash position, revenue, burn rate, runway, financial statements, and an updated cap table.
• Exemptions for Term Sheet
In the event the winning company, prior to the date of the Startup Showcase Live event, has executed a term sheet with an institutional investor or a sophisticated angel to raise a credible funding round, as determined by the Syndicate, then the Syndicate shall participate in the funding round on terms not materially different than those granted to the lead investor (in lieu of the SAFE investment structure described above). The funding round must be at least $1.0 million in total size, with the lead investor contributing a minimum of 33.3% or $1.0 million of the round proceeds. The Syndicate may approve exceptions to the threshold for otherwise promising startups. In addition, the Syndicate reserves the right to reconsider any and all investments theses / criteria at its own discretion in keeping with the mission of Venture Atlanta.
• Participation in Program. Venture Atlanta has no obligation to continue the company’s participation in the Startup Showcase Live event in which company has been selected. Venture Atlanta may, in its discretion, terminate the participation of the company in Startup Showcase Live at any time prior to the end of such program without further liability or obligation.
$500,000 SAFE Note Investment
After being chosen as the winner, the Showcase Syndicate will invest $500,000 USD in exchange for a standard post-money SAFE Note (“SAFE”), payable after the event and subject to the company’s satisfactory completion of our due diligence and a fully executed investment agreement.
• Valuation Cap
The Startup Showcase Live SAFE has a standard valuation cap based on revenue traction of the business:
· Pre-Revenue: $3,500,000 Post Money Cap
· Greater than $0 but less than $250,000 ARR or Trailing 12-month revenue (“Revenue”): $5,000,000 Post Money Cap
· Greater than $250,000 Revenue: Post Money Cap increased by $500,000 over $5,000,000 for every $50,000 of Revenue above $250,000 of Revenue. (i.e., a company with $500,000 in Revenue would receive a $7,500,000 Post Money Cap), up to $10,000,000 (or Revenue of $750,000).
· Businesses with more than $750,000 of Revenue: Subject to a $10,000,000 Post Money Cap
• Conversion at Qualified Financing
In the case of an equity financing before the termination of the SAFE, the dollars invested through the SAFE will automatically convert into the SAFE preferred stock equal to the purchase price divided by the conversion price. The conversion price will be the lesser of (i) a 20% discount to the price paid by other investors in the qualified financing or (ii) the price obtained by dividing the valuation cap by the number of outstanding shares of the company immediately prior to the Qualified Financing calculated on a fully diluted basis.
• Preemptive Rights
Pro-rata rights to allow the Startup Showcase Live syndicate to continue investing in subsequent investment rounds of your company. This right is assignable to allow the participants of the Syndicate or their affiliate entities to participate in seed or later rounds. The preemptive right terminates when the investors in the syndicate are granted the same or substantially similar preemptive rights issued in connection with a Qualified Financing or upon the Company’s IPO or sale, if earlier.
• Information Rights
Quarterly operating metrics, cash position, revenue, burn rate, runway, financial statements, and an updated cap table.
• Exemptions for Term Sheet
In the event the winning company, prior to the date of the Startup Showcase Live event, has executed a term sheet with an institutional investor or a sophisticated angel to raise a credible funding round, as determined by the Syndicate, then the Syndicate shall participate in the funding round on terms not materially different than those granted to the lead investor (in lieu of the SAFE investment structure described above). The funding round must be at least $1.0 million in total size, with the lead investor contributing a minimum of 33.3% or $1.0 million of the round proceeds. The Syndicate may approve exceptions to the threshold for otherwise promising startups. In addition, the Syndicate reserves the right to reconsider any and all investments theses / criteria at its own discretion in keeping with the mission of Venture Atlanta.
• Participation in Program. Venture Atlanta has no obligation to continue the company’s participation in the Startup Showcase Live event in which company has been selected. Venture Atlanta may, in its discretion, terminate the participation of the company in Startup Showcase Live at any time prior to the end of such program without further liability or obligation.
