- Average investment range $6K to $18K.
- Average valuation of company at time of investment = $500,000
- Instrument = convertible debt note.
- $18K into $500K = 3.6% to 6% equity from cash investment only
- Additional 9% in sweat equity for mentoring services and tag along in Social Impact investment meetings. 3% goes to lead mentor. 3% to pool of 9 mentors. 3% to Cal-Xelerator (50.1% Cal-X Stars) Investors.
- 3% royalty on gross sales for 1st full 3 years of sales. 1st year is not triggered until $10K in revenues aggregate is reached.
- 7% warrants, 15 year strike time, strike price equal to seed round price.
- *BONUS OPTION* Liquidation preference. Cal-Xelerator shareholders receive 3X return before other shareholders are paid.
- Preferred stock with 5:1 voting rights.
- Right to participate pro rata in future rounds.
- Two board seats if desired.
- Lead Cal-Xelerator Mentor gets stock option agreement in company equal to CFO level – 20% vesting a year for 5 years.
