Capital & valuation structure (working overview)
This page is a working overview for aligned, sophisticated counterparties assessing Noetfield’s early-stage structure. It summarises the logic behind Partner Notes (cap/discount), illustrates dilution mechanics, and clarifies what is discussion-only versus what must appear in definitive documents.
Related Partner & Capital pages
Keep the conversation anchored to a consistent set of references (semi-private pages may be noindex).
Four distinct layers of “value” (do not mix them)
Noetfield separates narrative value from contractual economics, and contractual economics from externally set market pricing. This reduces confusion and protects both parties when definitive documents are negotiated.
- 1) Strategic / internal view. Directional thesis and long-horizon potential. Not contractual.
- 2) Discussion band. Non-binding conversational range used to sanity-check expectations. Not a commitment.
- 3) Partner Notes economics. Contractual guardrails in the note instrument: valuation cap + discount (and interest, if applicable). These terms govern conversion, not “today’s headline valuation.”
- 4) Priced equity round. The first time a third-party lead investor sets price. This becomes the market reference until the next priced round.
Illustrative path to the first 1.0M CAD raised
The figures below are illustrative and simplified to show mechanics. Actual outcomes depend on timing, final terms, total note pool size, option pool creation, and the fully diluted structure at conversion/pricing.
Phase 1 — Partner Notes (current)
- Target pool: ~300k CAD (high-risk, early stage).
- Illustrative economics: unsecured notes; 7% simple interest; 36-month term; 30% discount; cap around 6.6M CAD pre-money.
- Example timing: conversion after ~2 years → conversion amount ≈ principal + ~14% simple interest (illustrative).
- Order-of-magnitude: at a 6.6M cap, a 300k pool may convert to ~5–5.5% fully diluted (illustrative, depends on cap table at conversion).
Phase 2 — First priced equity round (illustrative)
- Raise: ~700k CAD.
- Pre-money: ~12M CAD.
- Implied new investor ownership: ~5–6% post-money (simplified).
Illustrative tickets and stylised outcome ranges
The examples below are stylised to show relationships between ticket size, conversion economics, and hypothetical company values. They are not projections and exclude dilution from option pools and later rounds.
| Ticket | Illustrative conversion amount* | Stylised ownership at cap** |
|---|---|---|
| 50k | 57k | ~0.86% |
| 100k | 114k | ~1.73% |
| 250k | 285k | ~4.3% |
*Principal plus ~14% simple interest over 2 years (illustrative).
**Ownership depends on fully diluted structure at conversion; shown here as a stylised cap-based ratio for intuition only.
| Company value | Ticket (stylised %) | Implied value | Implied multiple |
|---|---|---|---|
| 25M | 50k (0.86%) | ~216k | ~4.3× |
| 100k (1.73%) | ~432k | ~4.3× | |
| 250k (4.3%) | ~1.08M | ~4.3× | |
| 50M | 50k (0.86%) | ~432k | ~8.6× |
| 100k (1.73%) | ~864k | ~8.6× | |
| 250k (4.3%) | ~2.16M | ~8.6× | |
| 100M | 50k (0.86%) | ~864k | ~17.3× |
| 100k (1.73%) | ~1.73M | ~17.3× | |
| 250k (4.3%) | ~4.32M | ~17.3× |
These are stylised examples only; they ignore option pools, later rounds, and structural changes. Early-stage instruments are high-risk and illiquid.
Why this structure (what it is optimised for)
- Cap table cleanliness. Use a note instrument early to preserve flexibility and keep later institutional rounds straightforward.
- Reward early conviction without premature pricing. Cap + discount + (illustrative) interest provide economics for early risk while limiting immediate dilution.
- Respect external price setting. The first market valuation is set by a third-party lead investor in a priced round.
- Reduce reliance risk. This page is discussion material; reliance should be on dated, negotiated definitive documents.
- Governance consistency. Definitions are stable, terms are explicit, and marketing language is separated from contractual language.
Legal, risk, and use limitations
This page is provided solely for high-level discussion. It does not constitute an offer to sell or a solicitation of an offer to buy any securities, and it is not investment, legal, tax, or accounting advice.
- No offering. Any transaction, if any, will be made only by definitive documentation and only to eligible investors relying on applicable exemptions in their jurisdiction.
- Illustrative only. Any references to valuation bands, caps, discounts, interest, percentages, or outcomes are illustrative and may change; they may not reflect any eventual transaction.
- High risk / illiquid. Early-stage participation may result in a full loss of capital; there may be no liquidity for an extended period.
- No reliance. You should not rely on this page as decision-grade information; obtain independent professional advice and request dated documents for any decision process.
- Confidentiality. Do not forward or distribute without express permission.