In this AlphaTakes video, Matt Storms discusses the most common types of securities issued in investor financing of privately held emerging technology companies. Since most emerging technology companies are organized as corporations due to investor requirements, he is going to focus on the types of securities issued by corporations.
Here are the key takeaways from this video:
(1) Common stock is the base form of security issued and is typically sold to founders and friends and family.
(2) Convertible debt is the most frequently used security in between priced financing rounds.
(3) Convertible preferred stock is the security of choice for angels and institutional investors.
(4) Other forms of securities include convertible equity and preferred stock without a conversion feature.