In this episode, Hall welcomes Michael Mealling and Steven Jorgenson of Starbridge Venture Capital.

Michael co-founded Masten Space Systems, was CTO of Seraph Group (a seed-stage VC fund), is the CEO of the Waypaver Foundation, and the President of the Moon Society. He has helped build several startups over the years ranging from telecom consulting to social media.

Steven is a founding partner of the Space Finance Group, Quantum Space Products, Space Angels Network, and Integrated Space Analytics. Steven is also an active angel investor in numerous other aerospace startups, giving him valuable personal experience as both the Investor and the startup Entrepreneur, as well as extensive experience as a professional investment fund manager.

Starbridge Venture Capital is a venture capital fund focused on the overlap between the space technology sector and traditional technology investments. There is true innovation happening across multiple sectors of space science and technology and at a pace that is quite obviously accelerating.

There are two primary deal structures for your startup fundraise.

There’s the convertible note which is a debt instrument that converts to equity later. However, if you want to use a straight debt instrument you should use a promissory note.

Then there’s equity. It gives ownership rights in the company. The ownership is set by the valuation put on the company. An equity deal often comes with additional terms such as board seats, voting rights, and more.

Most startups use the convertible note to kick off their fundraise because it doesn’t set the valuation of the company which drives how much the investor gets for their investment.

You will find setting valuation is a major step in the fundraise process.

Until there is a lead investor and the valuation is set, there will be many investors who want to “just be in the deal,” but not spend time setting the valuation.

At some point in the fundraise an investor will express interest in joining but wants equity. If they are investing $100K or more, then they are a candidate to be the lead investor.

After the equity investment is made, the convertible notes convert into equity.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today!