Convertible Loan agreement, SAFE, Convertible note, convertible debt, venture debt. Financing your startup can take many forms. As a startup entrepre

What does cla stand for in business?

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2021-08-04 11:00:05

Convertible Loan agreement, SAFE, Convertible note, convertible debt, venture debt. Financing your startup can take many forms.

As a startup entrepreneur, you might have come across the term CLA and were wondering what CLA stands for in business. You might have even been offered a CLA and weren't sure about the pros and cons of such an offering. In this blog, we'll try to unpack this subject. There is a lot of legal and finance stuff going on, so we'll take it step by step, but if we missed anything – feel free to contact us.

Disclaimer 1: We are entrepreneurs and investors, NOT lawyers.Unless you are doing a SAFE agreement (more on it later), always consult a specialized startup lawyer before making any move.

Disclaimer 2: None of the links are affiliated, and we don't have a commercial relationship with any of the linked brands.

Equity in a startup company, or any company that matters, is ownership in that company. Startup equity can be split between its founders, investors, advisors, employees, and service providers. Since a technology startup's valuation starts low and grows aggressively over time compared with traditional companies, it is common for stakeholders to look for equity ownership due to the hidden potential.