In this section, we will talk about the seed funding. So, how much money do you need as a founder? We have all of this in this J curve and the total amount of money you need it will be this. Then how do we look at this investment money? Usually, you get this investment money with the key milestones, for example, you start your startup and then maybe the first important milestone could be development of your first product. Well, it depends on your company, but this could be one good example. Then, with this product you enter the market and you if your market entered is successful, you grow your business either by developing second and third products or you go globally to many other countries. So, these can be your key milestones. Startups usually get investment with these key milestones. For example, the first round of investment could be seed round for developing your first product, and Series A. Then afterwards we use alphabet's like A B C. Series A could be the money necessary for market entry and Series B for growing your business. Then why do you want to divide your investments steps like this instead of getting all the necessary money at once? In Silicon Valley, the funding size is typically like this, for angel investment, it's between half and one million dollars. Usually three to five angel investors are to invest together. For venture capital investment for Series A, the amount is usually three to five million dollars with 10 to 30 percent share. Of course, it varies a lot depending on the industry and the kind of startups. Again, back to this question, why do you want to get investment in steps? For startups, as you hit these key milestones, your company value will increase. So, with the same amount of invested money you can give less and less shares. That's the reason why you want to get the investment money in steps. What about the investors? Initially, they don't know about you well and they are not sure whether you will really deliver what you promise. So, for investors they want to reduce their risks by investing in steps. So, for the seed round, the funding sources are usually bootstrapping which means that the founders used their own money or there are other sources called so-called 3F's, family and friends and joking the third F is fools, and angels. This diagram shows the funding sources for all the startups and we have been talking about venture capitalists and angel investors. But actually, for all the new startups, angel investors and venture capital constitute only a small portion of the pie. In early stage financing deals, quite often they use a convertible debt. Their sources are family and friends, angels, angle groups, and micro VCs. Let's see what these convertible debt means. It is often used at the seed stage. This is debt. But this debt will convert to preferred equity when another round is raised. The conversion usually includes a discount on the price to the future round. Usually, this is easier transaction than equity financing because there's no valuation and the valuation is delayed until the next financing round. So, let's look at key features of convertible debt. Regarding the conversion rate from the debt to preferred shares, there is a discount usually 20 percent and the maximum discount percentage. If there is a qualified financing and then there will be an automatic conversion from the debt to the equity. These qualified financing includes a term like within six month the amount $1 million for example. When it converts, the conversion amount will be principal plus the interest and typically the interest rate is four to 12 percent. Let's look at an example of discount in convertible debt. Angels did a half a million convertible debt with 20 percent discount to the next round. Six months later, a venture capital offers a Series A round a one million dollar investment at one dollar per share. In this case, the angles from the seed round will get 625,000 Series A shares because there will be a 20 percent discount. So, for these angels, the share price will be 80 cents and so 500,000 divided by 0.8 will result in 625,000 shares. So, this discount gave some reward for early investors before the full Series A. So, in this section, we talked about the investment with key milestones. We talked about the source of the seed round and I explained the convertible debt.