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What is Keep It Simple Security (KISS)?

The KISS (Keep It Simple Security) docs are short and sweet funding documents released by 500 Startups after feedback from many early-stage investors. They are designed to be flexible, simple, and balanced from both the standpoint of the company and investor. There are two types of KISS agreements: a debt version and an equity version.

The debt version accrues interest (5%), provides a maturity date of 18 months, and converts to preferred stock if the company raises $1 million in the next qualified round. KISS equity securities have an 18-month maturity date and an automatic conversion into equity at the next round of financing if $1 million is raised. KISS equity securities do not have an interest rate though, which makes them attractive to founders.

Although a KISS is meant to be clear and easy to understand, it’s still in a company or investor’s best interest to have an attorney check things over before completing the deal. You can do that at LawTrades, where our legal marketplace helps fellow startups on a daily basis. Simply visit our site, answer a few questions, and we’ll get back to you with a free price quote from a pre-vetted attorney shortly thereafter. (disclosure: I’m the CEO!)

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