Songkick (YC S07) raises $4m series A(uk.techcrunch.com)
uk.techcrunch.com
Songkick (YC S07) raises $4m series A
http://uk.techcrunch.com/2008/12/18/songkick-raises-4m-million-series-a-from-index/
7 comments
Is there actually a technical distinction between a Series A and a seed round? (I've always assumed it was just size and order of progression.) Their last funding was already $1 million, so wouldn't this be more like a small Series B?
It's arbitrary. A lot of people call the first small equity round a Series AA. My guess is that their first round was either a convertible or a Series AA that was mislabeled as a Series A in Crunchbase. Or this one was a Series B that was mislabed a Series A.
Either way, it doesn't really mean much. And "seed round" is more of a general term. Your Series A could be your seed round. It doesn't have any specific meaning, though in their case I'd assume they would consider the YC funds the seed round.
Either way, it doesn't really mean much. And "seed round" is more of a general term. Your Series A could be your seed round. It doesn't have any specific meaning, though in their case I'd assume they would consider the YC funds the seed round.
A series A means that you're issuing class A stock. An angel round means your issuing a note that will eventually convert to class A stock, aka a convertible note.
The threshold between an angel round and a series A is determined by your articles of incorporation. It's usually between 2 and 5 million. Before your series A you have no valuation b/c it would be a waste of money to determine it. Once you have matured and you raise enough money to go past the 2 to 5 million "convertible threshold," you get a valuation and issue class A stock to your investors and angels. Your angels convert from a convertible note to class A stock at the pre-money valuation and they get to ride the "valuation bump" the series A investors put in for free.
Ok, I reread this explanation and I hated it. This is how I actually understand it:
// globals
double classAThreashold = callLaywers( "Halp!" );
double outstandingShares = callLawyers( "Oh noes!" );
double amountInvested = 0;
void enterNewInvestment( double newInvestment )
{
This is how I understand the whole process. It took my lawyers a long time to explain it all to me and I'm probably still screwing something up. Go easy on C++ :)
[updated a few bug fixes]
The threshold between an angel round and a series A is determined by your articles of incorporation. It's usually between 2 and 5 million. Before your series A you have no valuation b/c it would be a waste of money to determine it. Once you have matured and you raise enough money to go past the 2 to 5 million "convertible threshold," you get a valuation and issue class A stock to your investors and angels. Your angels convert from a convertible note to class A stock at the pre-money valuation and they get to ride the "valuation bump" the series A investors put in for free.
Ok, I reread this explanation and I hated it. This is how I actually understand it:
// globals
double classAThreashold = callLaywers( "Halp!" );
double outstandingShares = callLawyers( "Oh noes!" );
double amountInvested = 0;
void enterNewInvestment( double newInvestment )
{
if( newInvestment + amountInvested >= classAThreshold ) {
double preMoneyValuation = getValuation();
vector< double > percentagePerInvestor;
for( int i = 0; i < angelInvestments.size(); ++i ) {
// convertible notes convert here:
percentagePerInvestor.push_back( angelInvestments[ i ] / preMoneyValuation );
}
percentagePerInvestor.push_back( newInvestment / preMoneyValuation );
for( int i = 0; i < percentagePerInvestor.size(); ++i ) {
cout << "Shares for investor # " << i << " " << percentagePerInvestor[ i ] * outstandingShares;
}
cout << "the company is now worth :" << preMoneyValuation + newInvestment;
} else {
angelInvestments.push_back( newInvestment );
}
amountInvested += newInvestment;
This is how I understand the whole process. It took my lawyers a long time to explain it all to me and I'm probably still screwing something up. Go easy on C++ :)
[updated a few bug fixes]
Now that I reread that, you're totally wrong. Angels are individual investors. They can and often do participate in equity rounds. They often contribute the entire amount. You can have an angel-funded series A. VCs could also do a convertible. It's called venture debt and it's rare but it happens.
No company that I've ever heard of specifies in their Articles what amount forces a future round to be equity rather than debt. It's all up to the company and investors. If your lawyers told you all of that stuff, seek new representation.
No company that I've ever heard of specifies in their Articles what amount forces a future round to be equity rather than debt. It's all up to the company and investors. If your lawyers told you all of that stuff, seek new representation.
Our articles of incorporation did not specify what future rounds would be called based on amounts raised at all. I don't think most do. And to my knowledge, there is no law requiring that. I'm pretty sure you can call your first round a Series C if you want to, though it would probably not be a good idea.
My point was that it's a custom, not a law, and the distinction between an AA and an A is arbitrary.
My point was that it's a custom, not a law, and the distinction between an AA and an A is arbitrary.
According to Nivi, anything above $500K is Series A country:
http://venturehacks.com/articles/seed-valuation
AFAIK seed rounds are usually $1 million or less.
Venture hacks is a great source, but I unfortunately couldn't find an exact answer to your question:
http://venturehacks.com/
Venture hacks is a great source, but I unfortunately couldn't find an exact answer to your question:
http://venturehacks.com/
One way in which this can occur is if you raise a seed round in convertible debt which converts into preferred stock at a following Series A.
good question. anyone?
they are good citizens too - running hacker events from their office
Agreed. The one I attended back in April was a great experience and really useful.
Congrats on the funding :D
Congrats on the funding :D
Congrats guys!
Wow - congrats guys. And great press following that knock off site covered on TC.
The Songkick team is awesome. Many congratulations.
Thanks very much guys for the kind words