Kiss Agreement

As with other startup products and services, we expect us to continue to iter kiss. If you have any comments and/or suggestions on how to improve our documents or would like to be included in the list of investors who have agreed to accept the forms, let us know by emailing us at kiss@500startups.com or by sending a tweet to me@gregraiten. The basics of the agreement: the company undertakes to raise a certain amount of money from an investor in exchange for an amount from the company that remains to be determined, based on the next round of financing. The basics of the agreement in a single sentence: the company agrees to borrow money at a set interest rate with a set maturity date, and the principal and interest are converted into shares of the company if and when the company accepts the financing by the sale of shares of its shares in an evaluated equity cycle. The assessed capital cycle is generally defined as “qualified financing” with a threshold for the amount that the entity must raise to trigger the conversion. The basics of the agreement in a single sentence: The company undertakes to sell a specific part of the company at a set price. Nuances: As with the convertible loan and the SAFE agreement, there may be a cap, a discount, or both. And as with the SAFE agreement, KISS is doing a good job of minimizing the unintended consequences of convertible bonds. KISS also has certain conditions more favourable to investors, such as information rights for KISS holders, which are normally granted only to shareholders.

As noted above and in this article, holders of convertible bonds benefit by default from conditions that shareholders do not normally receive. Both the SAFE agreements and the KISS agreements solve these problems. It has similarities with the SAFE instrument, whose objective remains the same: to enable newborns to obtain financing in a short time and at low cost, thus avoiding the long and expanding negotiations that normally precede an investor`s grant agreement. There are two types of KISS convertible bonds that you can use depending on the type of agreement you have with the investor. These two are the foreign version KISS-Note and the equity-version of the KISS convertible bond. To explain it, SAFE is known to be safe because there are no explosive clauses that can wipe out the company. The conditions are so tight that Y Combinator had to conclude four separate contracts to avoid complexity: these four types of SAFE are extremely simplified agreements and favor the company to the detriment of the investor. In July 2014, 500startups announced the birth of the KISS convertible loan, which is an alternative investment vehicle to a SAFE instrument. It contains many similarities with SAFE convertible bonds. Its goal is to enable startups to obtain financing in a short time and at a low cost, while avoiding the lengthy negotiation process when drawing up a grant agreement by an investor. All the details have been added, as can be seen in the image….

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