Additional Product Launch Preparation

Part
01
of two
Part
01

SAFE Investment Rounds

In 2013, Y Combinator developed and introduced the SAFE investment round for startups. A simple agreement for future equity (SAFE)is now the go-to option for 'almost all YC startups and countless non-YC startups as the main instrument for early-stage fundraising'. As a result of startups looking to raise smaller amounts in advance of a priced round of financing, like a Series A Preferred Stock round, the SAFE allowed for a 'simple and fast way to get that first money into the company' with the idea that SAFE holders were just early investors. It is important to note that 'SAFE notes require C-Corp status because the investment is noted on a capitalization table just like stock options'. While Y Combinator is still the leader is SAFEs, 'other players in the startup finance ecosystem have created form documents similar to the SAFE but using different names'. Examples of these include a convertible security proposed by a partner at the law firm of Wilson Sonsini Goodrich & Rosati and the 'Keep it Simple Security (KISS) created by 500 Startups, another startup accelerator'.

Simplicity

  • Compared to lengthy and complicated convertible notes (a common alternative), a SAFE round offers investors 'a 5-page document that was created to streamline the seed investment process'.
  • SAFE investments do not 'carry an interest rate and don’t have a maturity date'.
  • SAFEs require little negotiation more than discussions regarding valuation caps.
  • With no predefined terms or maturity dates, SAFEs give 'the startup total freedom with no specific destination or expectation'.

Equity Conversion

  • While a convertible note provides options for stock or future financing, a SAFE round 'only allows for a conversion into the next round of financing'.
  • SAFE investments can 'convert when any amount of equity investment' is raised.
  • A SAFE investment provides 'simplicity, but it doesn’t give the control to the entrepreneur'.
  • Another important factor is that 'raising common stock doesn’t trigger a conversion for a SAFE investor, so entrepreneurs in need of some extra cash could do a "friends and family round" and avoid the conversion trigger if there is a need to bridge'.
  • Data from the SEC states, 'if a SAFE specifically triggers upon an offering of preferred stock, but the company subsequently raises money by instead selling more SAFEs, common stock or convertible notes, or by getting a conventional bank loan, then the SAFE will not convert despite the company having raised more capital'.

Valuation

  • It is possible, depending on a company's positioning, that SAFEs can be issued 'without a valuation cap', though it can be tricky. Andrew Krowne, of Dolby Family Ventures, states that, 'We have observed that many founders don’t do the basic dilution math associated with what happens to their cap table (specifically their personal ownership stakes) when these notes actually convert into equity. By kicking the valuation can down the road, often multiple times, entrepreneurs end up owning less of their company’s equity than they thought they did. And when an equity round is inevitably priced, entrepreneurs don’t like the founder dilution numbers at all'.
  • 'It's debatable as to whether a SAFE would trigger the need for a fair (409a) valuation to formalize common stock value. Avoiding this means potentially avoiding paying for the professional services involved with getting a 409a valuation.'
  • 'SAFEs can include a discount, a valuation cap, both, or neither, though, it is not common for either to be absent, as that would discourage investors'.

Payouts

Interest Rates

Potential Risks


Part
02
of two
Part
02

Farm Equipment Maintenance

Farm equipment maintenance requires extensive safety measures. The maintenance practices differ depending on the type of machine that is being maintained. Our findings have been outlined below.

Precaution measures


Cost-effective Maintenance Practices


Tillage Maintenance


Weed Control Equipment Maintenance (Mowers)

  • In order to avoid the spreading of herbicide-resistant weeds to unwanted areas, weed control equipment should be thoroughly cleaned from herbicide-resistant weed seeds and debris. This is done by disassembling the equipment and cleaning the parts individually using an air compressor.
  • In order to ensure the equipment is thoroughly cleaned, bale pieces should be fed to the machine. When no more material comes out, the mower should be cleaned using a blower, in order to remove stray material parts.


RESEARCH STRATEGY

In order to provide insights surrounding how horticulture farms handle and plan machinery maintenance, we took a creative approach. Since Merriam-Webster defines horticulture as "the science and art of growing fruits, vegetables, flowers or ornamental plants", we searched for information on equipment used for vegetable farming, fruit growing and gardening individually. Then, we searched for information on how this particular equipment is maintained. Before doing this, we attempted to locate relevant information in the following ways:

To begin with the research, we searched blogs, websites and social media posts from horticultural farms, hoping to locate relevant statements from farm owners themselves. Various farms were searched, such as the River Farm. Horticultural farmers’ association websites were also searched, such as the website of the American Horticultural Society and the Practical Farmers of Iowa. In addition, we checked horticulture farm equipment manufacturer websites and blogs, such as McAllister Machinery, hoping to locate their views on horticultural farm equipment maintenance. What we found this way was information on general equipment maintenance handling. The information didn’t focus specifically on machinery designed for horticultural activities, but rather focused on agricultural machinery in general.

Next, we decided to scan horticultural and agricultural industry publications, hoping to find expert-written reports on the topic of maintenance of machinery that is being used on horticultural farms. Successful Farming and Farm Progress were among the sources searched, but again, the available reports described general farm equipment maintenance practices, without even briefly mentioning horticultural machinery.

Ultimately, we resorted to searching publications from university agricultural departments, hoping to locate scholarly studies on horticultural machinery maintenance, which we could review to extract 3-5 insights that specifically relate to horticultural farms. University of Massachusetts Amherst’s Center for Agriculture, Food and the Environment website was searched, along with other similar departments, such as the University of Nebraska — Lincoln’s Department of Agronomy and Horticulture. These types of sources highlighted the procedures of farm equipment maintenance, but in each case, it was unclear whether these are conducted specifically by horticulture farms. For example, University of Nebraska — Lincoln’s Department of Agronomy and Horticulture didn’t provide any information on machinery maintenance. On the other hand, Oregon State University’s College of Agricultural Sciences described practices when it comes to machinery maintenance, but didn’t specify whether these would apply to horticultural farms.
Sources
Sources

From Part 02
Quotes
  • "When planning tractor maintenance, check the right equipment is available for safe jacking, removal of wheels and other tasks. People doing the job should be experienced, and there should be agreed safe procedures."
Quotes
  • "Much maintenance can be done during the off season, but if possible, make repairs immediately. Many unforeseen problems can occur when working with equipment and making repairs is very much learn-as-you-go. Read the owner's manual often, and if problems occur that can't be fixed with resources at hand, contact other farmers or local mechanics for assistance."