TroopSwap & Regal Cinemas Partner to Bring Discounted Movie Tickets to the Military

TroopSwap & Regal Cinemas have joined forces to bring discounted movie tickets to military and veteran households across the country. TroopSwap, the first ecommerce platform exclusively for the military, is the first platform to verify the military and veteran affiliation of its user base, allowing the site to partner with premium brands to make a difference through military discounts.

Military Spouse Appreciation Day

In honor of Military Spouse Appreciation Day (which took place last Friday), we are linking to a post put together by Kristen Murdock, a naval officer currently serving in Afghanistan. Despite being deployed to a combat zone, where she no doubt has serious demands on her time, Kristen managed to put together a collage post on her dearest friends/military spouses to highlight their individual and collective character.

You can find Kristen’s post here:

TroopSwap, Red Bull Air Force and Wounded Wear Team Up for Wounded Warrior Skydiving Event

The second annual Jumping for a Purpose will take place at Skydive Suffolk over Memorial Day weekend, May 26th and 27th, from 9 AM until 6 PM. After raising $17,000 dollars for Wounded Warriors during last year’s event, organizers from and Wounded Wear coordinated with the United States Navy and the Red Bull Air Force, Red Bull’s official skydiving team, to augment the event with a flyover from a fighter jet and a professional aerial performance.

In keeping with last year’s tradition, TroopSwap and Wounded Wear expect to have a Wounded Warrior from every conflict dating back through at least Vietnam present to participate. Walter Reed is also sending Wounded Warriors to participate in the event. After last year’s event surpassed expectations by attracting over 3,000 attendees on a single Saturday, leaders from TroopSwap and Wounded Wear estimate that over 5,000 attendees will participate in the upcoming celebration of the unbreakable will  and spirit of America’s finest men and women.

Sponsors are needed to offset the cost of jumping each of the Wounded Warriors participating in the event. Supporters may request more information by e-mailing or by donating directly through Wounded Wear’s website:

Your donation will support an amazing experience for a Wounded Warrior like Lance Corporal David Collins:

About TroopSwap: is the first e-commerce platform for military discounts exclusively for military families. Our mission is to reward a life of service. We limit eligibility to veterans, service members, and their immediate family members. We partner with merchants to provide great deals for the military community. We only employ military spouses in the markets where we are active. 10% of our profits are donated to the Wounded Warrior Project. To learn more, please e-mail: aaron(at)troopswap(dot)com, follow us on Twitter @troopswap or like TroopSwap on Facebook at

Scouts Out: The Anatomy Of A Firefight In Mosul, Iraq

This is the first installment of a three part series outlining one of the biggest firefights in Northern Iraq during Operation Iraqi Freedom. This particular firefight occurred in Mosul, Iraq on October 12, 2006, when somewhere between 200 - 300 insurgent fighters attacked coalition bases across the city. My platoon was the only American platoon outside the wire for the first hour of the attack. By the time the firefight ended, fifteen of my men had earned valorous awards for their bravery under fire. There were only twenty-four of us on patrol that day, in a city of 2.2 million Iraqis, and we had to rely solely on our training and our trust in each other for the majority of the firefight. I am writing this account based on notes from my journal, for if I do not record it now, then I might lose the story, and the accomplishments of my men, to time.


I was ribbing my driver about his weight over the vehicle intercom when the first mortar shells landed. Four of them impacted near simultaneously in the first barrage; the explosions rocking the earth. They were big, fat shells, 82mm or 120mm in diameter by the size of the explosion, I couldn’t tell exactly right away, but the burst radius, military parlance for the distance within which a shell is likely to kill a person standing above the ground, of the shells was either 38 or 60 meters respectively. When they landed, my platoon happened to be driving right past the target of the barrage: an American Combat Support Hospital in Mosul, Iraq. I had met many of the nurses who worked there during drills and emergency visits, and I knew right away that they were in serious trouble because the hospital didn’t have readily accessible bunkers inside the facility.

The shock of the attack was more palpable for the weeks of calm that had preceded it. My unit had gone nearly two weeks without encountering any significant enemy activity out in the city and our life had taken on an almost mundane routine. Wake Up. Eat. Patrol. Eat. Patrol. Eat. Sleep. Repeat. In fact, just before we left the base for our second patrol of the day, another platoon was taking advantage of the cool breeze blowing off the Tigris to have a barbeque. I was more than a little jealous watching some of the guys in that platoon toss a baseball back and forth while the sun began to set on the horizon as we left the base.

But the violence of the sudden attack reminded us all that we were still in a war zone. We were so close to the bursting shells that the overpressure from the rounds knocked me against the sides of the hatch of my Stryker Reconnaissance Variant, a massive twenty ton fighting vehicle with a .50 caliber machine gun and eight wheels. I glanced over at one of my scout team leaders in the hatch across from me, Sergeant William Burkman, the youngest team leader in my platoon, who was staring intensely at the area where the rounds where landing. (Below, a Lightning Platoon Stryker moves alongside dismounted troops to provide cover)

I flipped a toggle switch clipped to my body armor and my headset crackled as I gave a terse report to our battalion headquarters:

"Patriot X-Ray, Lightning 6, Lightning is monitoring incoming mortar fire on LSA (Logistics Support Area) Diamondback. Do you have anything on the Q36 over?"

My call sign, Lightning 6, identified me as the leader of the battalion reconnaissance platoon to our battalion headquarters while the Q36 was a radar that had the ability to determine the location of the enemy mortar tubes by calculating the path of the incoming rounds. The problem was that the report from the radar typically took three to five minutes to generate and the personnel at the hospital would need help immediately if the shells continued to land.

"Lightning, Patriot X-Ray, negative, we do not have any reports of incoming mortar fire on Diamondback, over." The sergeant speaking sounded bored.

Most of the time, Iraqi insurgents who wanted to use mortars to attack an American base would drive around Mosul in pickup trucks with a mortar tube or two stashed in the bed of the truck. Teams of two to three men would haul out the tube, set it up in the street, fire a round or two, and then drive away. The whole process from start to finish took all of two minutes, a time-frame that effectively prohibited an American platoon to react unless the insurgents were stupid enough to fire while a platoon was patrolling in the immediate vicinity. Typically, the fire was fairly inaccurate, but one lucky shot still had the potential to cause significant casualties.

In fact, after the first shells landed I had to check with Sergeant Burkman to make sure I had heard four separate rounds detonate. Four shells impacting at the same place at the same time with coordination and precision was both remarkable and unusual. So I waited with bated breath to see if more shells would impact or if the insurgents were just trying to harass us as they had always done before that day.

Time seemed to slow down as adrenaline pumped through my veins. Everything snapped sharply into focus as my heart began to pound in my chest. And, even though I was expecting them, I was still surprised when the second barrage of shells hit, for mortars do not make the same whine that artillery shells do because mortars come almost straight down when they land following an arc like that of a  rainbow whereas artillery shells fly in low and hard with a famous whine. The explosions sent me flying against the side of my hatch again where the body armor on my torso met the armor of the vehicle and pushed back into my chest. In the distance, I could make out streams of red tracers as they arced into the sky at various points across the city and that’s when I knew that this day would be unlike any other I had spent as a combat leader in Iraq.

The decision I made next would not make sense without context. I grew up the son of a career artilleryman on Fort Sill, Oklahoma, home of the Army’s Field Artillery. My dad loved the Army and his craft, and he would frequently share tidbits of information that allowed me to understand more about the opaque world of military science. One day, as my dad and I were driving in his pickup truck on the long road that bordered the firing range on Fort Sill, a loud WHOOOOMP interrupted our conversation as a a series of explosions reverberated across the range.

"TOT. Time on Target," my dad said.

"What’s that?" I asked.

"It’s artillery talk for coordinating the impact of shells from multiple tubes so that you inflict the maximum damage possible." He responded. "You want to catch as many people in the open as possible before they have time to take cover, so we practice coordinating the guns so that all of the shells land within five seconds of one another."

"Oh," I said. "How hard is that?"

"Well, you have to account for the spacing of the guns, adjust the charge on the shell and then make sure the angle of the individuals tubes are adjusted properly so that the shells all land at the same place at the same time. Our training standard is five seconds from the impact of the first shell to the last one that hits."

The deliberate, technical planning that went into maximizing the death of a group of people shocked me so much that I remembered that conversation many years later. There was something particularly unsettling about killing many people at once who were unaware they were being targeted. So, as soon as I realized that fellow Americans, primarily medical personnel, were suffering the brunt of the enemy Time on Target, I knew that my platoon had to stop those tubes from firing.

Fast forward twelve years to January, 2005 and I was Ranger Candidate Number 155 in the first phase, Benning Phase, of Ranger training. I had just successfully completed a land navigation course after finding five of five assigned navigation points and I was feeling pretty good about myself. But, as I leaned back to rest against my rucksack with a few other Rangers who had also finished the course early, a weathered looking Ranger Instructor called me out,

"Ranger, 155!"

"Yes, Sergeant?" I replied, scrambling to my feet.

"What is the effective burst radius of a 155mm artillery shell?"

"50 meters, Sergeant?" I replied, with obvious uncertainty.

"Why don’t you go look that up Ranger and then give me 50 pushups for not knowing the effective blast radius of your roster number. You’re going to hear that question again," the sergeant informed me.

I looked up the statistic, the answer was in fact 50 meters, but I was still wrong — you don’t base combat decisions on uncertain knowledge. Fearing another spontaneous quiz upon my return, I took great pains to memorize every number on the page. And, right next to that figure in my Ranger Handbook, were the figures detailing the effective blast radius and the maximum range of a120mm mortar system: 60 meters and 7,200 meters respectively. Those numbers, seared into my memory through the fear of incurring a Ranger Instructor’s wrath, came back to me the day the mortar shells landed on the hospital in Iraq. 

The final piece of information that guided me the day the mortar shells hit the hospital, I had picked up by listening to the combat veterans in my platoon. After joining my battalion at Fort Lewis, 2nd Battalion, Third Infantry Regiment, I led a Stryker Rifle platoon for five months before the battalion commander selected me to lead the battalion reconnaissance platoon, the eyes and ears of the commander on the battlefield. There, I had the privilege of leading the most experienced men in the battalion, including the best non-commissioned officers, who were hand-selected from the battalion’s ranks to serve as scout team leaders. The platoon also included the battalion sniper section, who were also hand picked and among the most experienced men in the unit.

My men were fountains of knowledge and I took great pains to soak up as much as I could before our deployment. On mortar fire, they taught me two things. First, the insurgents liked to fire their mortars at maximum range because it put the greatest possible distance between themselves and American ground forces on the base. Firing max range also had the added benefit of simplifying how many charges they had to put on the shell — all of them. Second, the insurgents liked to fire their mortars from a location where they had a clear line of sight to the base.

For example, a base in eastern Mosul that the Army eventually abandoned happened to have a water tower located on it that served as a perfect aiming point for the insurgents. If they found an open field with line of sight to the water tower about six or seven kilometers away, then all they had to do was drop a mortar tube out of a pickup truck, align it with the water tower, drop a shell or two, then drive away. That particular base was located on a hill, which afforded multiple firing points for insurgents and they used all of them quite often.

LSA Diamondback, where the combat support hospital was located, was not on a hill; it stretched across low-lying ground directly adjacent to the western bank of the Tigris River. And, the base was located on the southwestern edge of the city, which effectively eliminated all possible mortar firing points to the south and west because the insurgents would be caught by American helicopters on open terrain with nowhere to hide if they were so dumb as to choose that location instead of firing from somewhere in the city where they could use the highways and neighborhoods to blend back into traffic.

The terrain directly north of the base contained the old city, where buildings crowded one another and market stalls filled narrow alleys. While it was possible for the insurgents to fire one or two mortars from this part of the city, I found it very doubtful that four tubes would be able to fire from the same location. And, finally, the terrain to the northeast didn’t really have line of sight to the base because the base was too low and there were two or three bridges that blocked line of sight to the base. Farther north, there was also a small American base on the eastern edge of the Tigris which made that location an even more doubtful firing point.

I knew this because getting mortared once or twice a week made me very angry, so I had studied the terrain around the base to understand how I would attack the base were I an insurgent commander. Combining the information I had picked up from my men along with the natural tendencies of the insurgents to pattern themselves allowed me to narrow down possible mortar firing points around the base to a handful of locations. I might have been able to figure all of this out on the fly during the attack, but the preparation I put into terrain analysis before the attack saved me precious time in the few seconds I had to decide how to respond to the incoming rounds.

As I steadied myself against the hatch of my Stryker, I pulled out a red marker and studied a laminated map I kept taped to the top of my vehicle next to my hatch. I made a big red dot directly on the combat support hospital then I drew an arc on my map that cut through locations to the east and west of the hospital that were seven kilometers away — the same distance as the maximum effective range of a 120mm mortar system. The arc sliced through two fields, one to the north of our position and the other to the east, on the opposite side of the Tigris. Only the field on the eastern bank of the Tigris had direct line of sight to Diamondback so I circled it. That red circle represented my best guess as to the location of the enemy mortar tubes given every relevant data point I had to draw from in the first minute following the initial impact of the rounds.

"I think I know where they’re at." I said to Sergeant Burkman.

He looked at me and his eyebrows raised a bit. “OK, sir.”

Despite my preparation and analysis, I felt a huge amount of self-doubt. There had been hundreds of mortar attacks over the last three years in Mosul and the insurgents were rarely caught in the act, even with all of our sophisticated technology. History was not on my side, but I felt that something was different about this attack. I didn’t think the insurgents were going to stop firing as quickly as they usually did.

After I marked my map, I ordered the four Strykers in my platoon to pick up speed and to head for Bridge 1, the southernmost bridge that connected west Mosul with east Mosul. We were going to race to the eastern bank of the Tigris River as fast as we could. Once we were moving towards the suspected mortar location, I radioed battalion again.

"Patriot X-Ray, Lightning is monitoring sustained battery fire on LSA Diamondback. Recommend you stand up the QRF (Quick Reaction Force). Do you have anything from Arrowhead (Brigade Headquarters) over?"

"Negative, Lightning. Standby." The sergeant on the other end seemed more alert now. Seconds later, he was replaced by Staff Sergeant Freddy Rocha, an experienced non-commissioned officer who was also a good friend of mine.

"Lightning, Patriot Three November (Sergeant Rocha’s call sign), we are monitoring reports of urgent casualties on LSA Diamondback from indirect fire, over."

An urgent casualty is the most serious type of classification for a combat wound — tantamount to serious or critical status at a domestic hospital. Now I knew without a doubt that the hospital staff and personnel in the surrounding buildings had already suffered serious injuries from the attack.

"Roger Patriot, Lightning is moving to a suspected mortar firing point on the eastern bank of the Tigris, break." I let the net clear for a moment, "Let me know when you have a grid from the Q36."

I wanted the map coordinates from our radar to either confirm or deny my guess as to the location of the mortar cell. If I was wrong, then I would need to adjust our direction of movement quickly. The medical staff at the hospital were enduring the devastation of sustained, accurate mortar fires. The only thing running through my mind was the thought of all the people depending on my platoon to do our jobs, to stop the attack, and to keep them safe. Even though my reconnaissance platoon was not designed for a large-scale firefight — our job was to see but not be seen — we were more than enough to force a large group of insurgents to re-direct all of their attention to us and away from the base. I started to pray that God would give me the wisdom to find those enemy mortar tubes.

As my platoon turned onto an east-west running highway that led to Bridge 1 and the eastern bank of the Tigris, we heard a loud explosion just behind us. After a short lull, the unmistakable chatter and stutter of American machine guns trading fire with AK-47s filled the air. Spaced several hundred meters apart, the walls around the base had individuals towers manned by two or three soldiers with a crew-served machine gun. That those machine guns were firing meant that the base itself was under direct attack, an action I did not think the insurgents would ever take against a base as big as LSA Diamondback.

I looked at Sergeant Burkman, “Do you think the towers are in trouble?”

"It sure sounds like it, sir." He answered dryly, his mouth set in a flat line underneath his Oakley sunglasses. Good non-commissioned officers have a rare skill for making you feel small when you ask stupid questions and Sergeant Burkman was no exception. (Below Sergeant Burkman, right, and I pose for a picture in the hatch of our Stryker)

Later, we found out that the loud explosion we heard was a car bomb parked on the same road we drove on to reach the highway across the Tigris. After the car bomb detonated, about 100 insurgents stormed the alley and attempted to breach the fence around the base. If the insurgents had attacked just a minute earlier or detonated the vehicle bomb next to one of my Strykers then we would have been unable to get onto the highway and to target their mortars. But, they didn’t, and we slipped past the attacking force and into the city. For the next hour, the twenty-four men in my platoon would be the only American force in action outside of the base gates in Mosul, a city with a population of 2.2 million Iraqis.


Blake Hall is the CEO and Co-Founder of, the first ecommerce platform that provides military discounts exclusively to veterans, service members and their families. A combat veteran, Blake led a battalion reconnaissance platoon in Iraq for fifteen months during 2006-07. The Tacoma News Tribune featured his platoon for two weeks after the Army decorated nearly every member of his platoon for valor for heroic actions during a firefight in Mosul, Iraq. His educational degrees include a Bachelor of Science magna cum laude from Vanderbilt University and a Masters of Business Administration from Harvard Business School.

Why Your Company Should Hire Veterans

The fundamental challenge for any organization is to take a group of individuals and to re-form their identity so that each individual works together as part of a cohesive group striving towards a common purpose. By definition then, an individual must subordinate selfish tendencies in order to allow the group to operate most efficiently. For instance, the CFO probably shouldn’t be mopping the bathrooms if the company is to develop proper budgets or to have the proper advice while negotiating contracts. At the other end of the spectrum, the CFO should ensure his own actions are aligned with the best interests of the company, shareholders and employees. While many companies have proven adept at building strong cultures capable of positively transforming individuals’ self-identities at all levels, few organizations are as skilled as the United States Military at re-forming an individual’s sense of self-worth. As a result, veterans are excellent additions to any organization because their sense of self-worth is tied to the well-being of the group, they have learned positive habits and they have been given greater leadership responsibilities relative to the vast majority of their peers.

The purpose of basic training is to take an individual and to re-form their identity around the concept of a Soldier, a Marine, a Sailor or an Airman. All actions fall into one of two classes: behavior that benefits the group or behavior that harms the group. Showing up late for a formation is an example of a behavior that harms the group as the group is less effective without each member of the team. As a result, a drill sergeant might spend several hours reinforcing the importance of being on time for formation by making the group suffer through a prolonged episode of physical exercise. Interestingly, the punishment meted out almost always affects the group, rather than just the individual at fault, for the drill sergeant continually attempts to teach the group that the deviant actions of one person will affect many others who depend on him to do his job in a war zone. In fact, the drill sergeant may even require the offender to watch his peers suffer, while forcing him not to participate in the group punishment, in order to reinforce to him the selfish nature of his actions. And, because the guy who showed up late will get an earful from his peers, an individual will face tremendous peer pressure to avoid deviant behavior — a powerful feature of the military’s culture that leads to the formation of positive habits over time.

For positive behavior, the military encourages individuals to develop their unique attributes that further the well-being of the group. Badges and awards are given out for excellence performing tasks that positively affect the group. A Marine who spontaneously takes charge of a situation to treat a sucking chest wound during a training exercise might receive an achievement award and public recognition for his actions in front of the group. Taken to the extreme, a Soldier who sacrifices his life for other members of the group is revered and treated as a hero.That story then becomes a larger part of the military mythology that reinforces positive behavior.

The military functions so effectively because the cultural pressures that reward positive behavior and punish deviant behavior become more powerful, not less powerful, the further an individual progresses in his military career. As an individuals’ social network becomes increasingly intertwined with other members of the military, the consequences for deviant behavior affect an individual in a more powerful way while the accolades given for positive achievement are likewise amplified. Thus, the military creates a powerful environment that trains an individual to evaluate and validate his actions, and by extension his sense of self-worth, by examining their impact on the group. The military has created a powerful indoctrination system that incubates and develops positive habits, and, since the best predictor of future behavior is past behavior, veterans are more likely to take those behaviors with them into the workplace.

Finally, veterans have been given far more leadership responsibility at a far earlier age relative to the vast majority of their peers. From the 22 year old Infantry Platoon Leader charged with making life or death decisions in combat for up to 46 men to a 30 year old Sergeant First Class managing hundreds of millions of dollars of equipment, the military entrusts more responsibility to people at an earlier age precisely because the culture of the military continually pushes people to develop themselves, to find answers in ambiguous environments and to accomplish the mission regardless of the challenge because a veteran’s self-identity and self-worth rides on his success to perform his mission to standard.

The military’s unique ability to instill positive habits in its’ workforce makes it fertile recruiting ground for corporate recruiters. A well organized business training program can teach the fundamentals of the business model to new hires but it cannot teach those new hires to internalize the values and goals of the organization to the extent that a veteran will grasp those intangible elements. How much would it cost to train someone to develop habits that put the well-being of the group ahead of their own self-interests? Is that even possible outside of a military style indoctrination process like basic training?

The business world looks to the military for lessons on leadership, so it makes sense that the business world should also look to hire veterans to enhance their workforce. Because veterans are influential by virtue of their exceptional experiences, they will coach and mentor their peers to improve the organizational culture in many subtle ways that may not be immediately visible but might make the difference in a critical situation. Plus, you might not need to hire a security guard.


Blake Hall is the CEO and Co-Founder of, the first ecommerce platform that provides military discounts exclusively to veterans, service members and their families. A combat veteran, Blake led a battalion reconnaissance platoon in Iraq for fifteen months during 2006-07. The Tacoma News Tribune featured his platoon for two weeks after the Army decorated nearly every member of his platoon for valor for heroic actions during a firefight in Mosul, Iraq. His educational degrees include a Bachelor of Science magna cum laude from Vanderbilt University and a Masters of Business Administration from Harvard Business School.

How to raise capital for your startup

Over the last few weeks, I have mentored fellow graduates of Harvard Business School, local DC based entrepreneurs and a group of very smart high school students at Thomas Jefferson on the nuts and bolts of how to raise capital for their startup. As I talked to my friends and fellow entrepreneurs, I’ve come to realize how little many entrepreneurs know about early stage financing. Over the last ten months, I’ve raised 3.5M for my own startup, TroopSwap, an ecommerce platform focused on veteran and military discounts.  We raised the first million via convertible debt, while the additional 2.5M was raised through equity.

My experience with fundraising has exposed me to the advantages and disadvantages of different types of financial instruments. I’ve also learned about the psychology of raising a round and how to effectively structure a round in order to sustain forward momentum and to ensure that commitments to invest actually materialize in the form of deposits in your company’s checking account. While nothing I’m writing in here is a secret and no one method is more right than another, there are certain norms and best practices that should be followed in order to keep as much of your time free to focus on your business as possible. I certainly wish that there had been a blog post that covered everything I need to know in detail when I was putting together my own round.

In addition, this is my first time building a company, and I certainly did not have experience raising capital before this venture, which brings me to my first point.

Find a Mentor

In order to raise capital, you need to find a mentor who has been successful in the vertical you are entering. Your mentor should have three vital characteristics:

  • Their reputation is impeccable among both investors and business contacts
  • They have a passion for your idea and for you
  • They have held executive level positions in the space you are entering

Your mentor plays an invaluable role when dealing with investors. Beyond giving a first time entrepreneur an invaluable dose of legitimacy (and reassuring investors that a first time entrepreneur won’t blow up his/her startup), your mentor can handle questions regarding the round that will help you avoid awkward or heated conversations with your investors. If the mentor and the entrepreneur divide their responsibilities with respect to financing questions and business questions, then you will have an optimal relationship to raise capital. There are only two rules:

  • The mentor demurs on questions of vision and strategy when dealing with investors except to note that you are a rockstar and the only reason he is spending time with you is because he loves you and the idea.
  • The founder demurs on questions regarding deal terms and the financing and allows the mentor to serve as the single point of contact for all investor questions.

The final thing you need is an investment from your mentor. Inevitably, investors will ask your mentor whether he/she is investing in the round as well. If the answer is no, then that will raise a ton of red flags. It’s also an issue of integrity and aligned incentives. As much as your mentor might claim to love you and the business, cash is truth and the smart money will walk if your mentor isn’t investing in the round.

How much equity should you give up?

A typical VC round is 20 - 30% of your company’s equity.

Convertible Debt vs. Equity

An equity raise is relatively straightforward. The entrepreneur sells a % of his/her company, typically 20 - 30%, for a particular amount of capital. A typical round might look something like this:

  • Pre-Money Valuation of the Company: 8M
  • Size of the Round: 2M
  • Post Money Valuation: 10M (8M Pre Money + Cash Raise of 2M)
  • Investors Stake in Company = 2M/10M = 20%

The trick to putting together a round like the one described above hinges on arriving at an acceptable valuation for your startup. For a startup that may not have revenue, this is no easy task. In that scenario, the entrepreneur and investor might choose to finance the business through convertible debt.

Convertible debt is an instrument particularly suited for pre-revenue startups where an initial valuation would be a number pulled out of thin air. In this scenario, an entrepreneur might decide to offer a convertible note in order to defer the valuation of the company to the next round of financing when a sophisticated investor will be able to place a reasonable valuation on the company. In exchange, the entrepreneur will offer investors interest on the invested capital as well as the right to convert their capital into equity at a discount when the company raises a round at a specific valuation.

For instance, a typical convertible note might have these terms:

  • Size of the Round: 1M
  • Interest Rate: 10%
  • Conversion Discount: 20%
  • Conversion to Equity Trigger: Series A Round of 2M or greater

If an entrepreneur raised a round of equity twelve months later at a Share Price of $25, then the note would convert as follows:

  • Principal + Interest = 1.1M
  • Share Price ($25) * Conversion Discount (.8) = $20 Share Price to Convertible Noteholders
  • Convertible Noteholders Shares = 55,000
  • Series A Investor @ 1M = 40,000

I didn’t note how many shares were outstanding in this hypothetical scenario which would enable you to calculate the percentage of ownership. For example, if there are 1M shares issued and outstanding then the convertible noteholders have 5.5% of the company. If there are 300,000 shares issued and outstanding, then they have 18.3% of the company. The large differential between 5.5% and 18.3% illustrates a deeper debate on the incentives associated with a convertible debt raise.

The large differential in percentage ownership noted above is related to execution. Linking the valuation to a later round of financing allows the entrepreneur to avoid dilution through superior execution; it also allows the convertible noteholders to capture a greater share of the company if the entrepreneur fails to execute well and raises equity at a lower valuation. In theory, the incentives inherent in a note should spur the entrepreneur to work harder to execute and to ensure the company succeeds which creates a winning scenario for everyone, but investors also have an incentive to wait to help the entrepreneur until their convertible note becomes equity.

Depending on market conditions, an entrepreneur might choose to put a cap on the valuation at which the note converts into equity, say 8M, although some rounds go uncapped because the market supports more favorable terms for the entrepreneur or the investor simply wants an option to invest more money in the company during follow-on financings — Yuri Milner and SV Angel’s convertible note investments in ycombinator companies is a good example of this strategy. The most important thing, however, is that your mentor and your board members are investing alongside your investors so that they share the same risk and accept the same terms.

No matter how you choose to raise your capital, through equity or through convertible debt, you will have to negotiate — and that leads to the next question.

When and with Whom Do You Negotiate?

(First, you should remember that you aren’t supposed to handle this conversation, your mentor is the single point of contact) Not all investors are created equal and you shouldn’t treat them as if they are equal. If you are raising 1M with a minimum investment of 25k, then you should resist the temptation to negotiate with investors who are only putting in 25k - 50k. If you begin to make concessions to small investors, then you create a horrible precedent that will encourage your investor to keep asking for more stuff down the line and you open up every piece of the deal to negotiation with all of your other investors. Your mentor will never make this mistake if they are competent.

When dealing with an investor coming in at 25k - 50k who wants to negotiate, simply reply that you are open to changing the terms if they want to put in an investment of 500k or more, otherwise the terms are what they are. This position is a fair one and it will help you avoid needy investors who don’t have much skin in the game but try to armchair quarterback your company from the sidelines. It’s much better for you to hold firm and to only deal with investors who take your company seriously enough to put in a large amount of capital.

How Much Should I Raise?

You should figure out the number you think you need to hit your targets and then roughly double it. Entrepreneurs are overly optimistic, it’s in our DNA. If you think you need 500k then you should try to raise 750k - 1M. When the cash burn is higher than expected (and it will be), the extra capital can make all the difference because it allows the entrepreneur to keep operating the business rather than to go out and waste time raising capital. Your time is much better spent on the business than with investors and you will be happier.

For the legal documents, you should instruct your lawyer to leave the round open up to 2X what you raised. That way, if you need to take on an extra 100k - 200k down the line you will have the flexibility to ask your investors to simply wire it over rather than to re-create an entirely new round. You get to save a lot of time and money because the documents are already on file and the terms of the deal are clear to your investors. Your investors get a bit of a sweetheart deal investing capital on the same terms after a significant amount of time has elapsed and you have (hopefully) increased the value of the company. It’s a win-win.

How Should You Structure Your Round?

If you are raising capital via VC, then you don’t have to worry as much about the mechanics of taking on capital and organizing a round. On aggregate, VCs are moving away from pre-revenue startups, however, and investing capital in growth businesses. Happily, the cost of starting a tech company has fallen dramatically thanks to cloud computing and angel investors have largely stepped in to fill the gap. When you are raising capital via angels, your investors will ask what your “first takedown” or “first close” is for the round and you should be ready with an answer.

The first investor to give you 25k takes a much greater risk than the last investor who puts in 25k to move your round from 975k to 1M when the risk is shared and you already have plenty of capital.

So why would that first investor take more risk and write a check? Exactly.

Without some sort of protection for that first investor, you could go out and spend the capital they invest without raising from anyone else. Most investors don’t want to hear, “I’m sorry. I bought ten MacBook Pros, your 25k is gone. No one else invested.” Since most investors only want to invest if other people think your idea is viable and will open up their network to help you, that scenario is unacceptable. The “First Close” solves this problem.

When structuring the round, the entrepreneur must decide the minimum amount of capital needed to achieve key milestones that would enable the company to achieve organic profitability or to achieve traction that would enable the company to raise more capital at a higher valuation. For a 1M raise, the first close might be 500k. That number will be written into the legal documents for the round. 

The first close binds the entrepreneur to raise 500k before the company is allowed to access the capital or “take down the round.” If the entrepreneur raises 475k but no more than that, then tough luck — the money must be returned to the investors. This legal protection ensures that your first investor who writes you a check is only committed to you insofar as you can convince other investors to invest as well until you have cleared your first close target.

OK, investors agreed to my terms and “are in”, now what?

You should anticipate that 20 - 30% of the money that investors have verbally committed to you will not end up in your company’s bank account. Additionally, investors have an incentive to wait and watch your company perform. The more time elapses before they actually write a check the more time they have to observe you execute and to see if the company risk is going down or up. The way to force the issue and to get a hard yes or no from people is to set a deadline for your first close. (** Give yourself plenty of time! You’ll need at least 2 - 3 months to hit your target.)

Once you’ve set your deadline for your first close, you should set a deadline one week in advance of that date and tell your investors to wire or mail their funds in by COB that day. Even after you and your mentors follow up with your investors, I guarantee you that at least a third of your investors will not wire funds over by the soft deadline. The excuses will cover the spectrum: unexpected business trip, family emergency, need time to free up investments for liquidity.

Even with your mentor helping you to herd your investors, you will find that the remainder of your investors will only wire their funds over at the very last minute when you inform them they are about to miss the deal. Some investors will fade away altogether, so prepare for a first close that is lower than you had anticipated. No round is secure until you have the cash in hand, regardless of the great things you hear from prospective investors at your meetings. Plan accordingly.

Should I always go for the highest valuation?

Simply, no. There are many different reasons that could influence you to choose an investor offering less money (see not all investors are created equally) but just as important are the implications that your valuation will have for future financings. If you raise 5M at a 40M valuation you might feel like a hero, but, if you miss your targets, the market softens and you have to raise again — at a lower valuation — you will lose the majority of your company. Beware Pyrrhic victories.

Anything else?

The first investors you pitch will have a lot of questions. Write them all down and you will find that they are themed around weak points in your pitch and business plan. Those questions will keep your investors from writing checks. They could be related to the size of the market, the team, the business model, distribution, whatever. Once you figure out what is holding investors back from writing a check, you need to get out on the street and talk to customers and recruit talent.

Be tenacious and never take no for an answer. You are only as strong as your will.


Blake Hall is the CEO and Co-Founder of, the first ecommerce platform that provides military discounts exclusively to veterans, service members and their families. A combat veteran, Blake led a battalion reconnaissance platoon in Iraq for fifteen months during 2006-07. The Tacoma News Tribune featured his platoon for two weeks after the Army decorated nearly every member of his platoon for valor for heroic actions during a firefight in Mosul, Iraq. His educational degrees include a Bachelor of Science magna cum laude from Vanderbilt University and a Masters of Business Administration from Harvard Business School.

Hiring Our Heroes: TroopSwap

The last few days have been eventful at TroopSwap HQ. CNBC published a great Q&A piece with TroopSwap Co-Founder, Matthew Thompson, and, after that piece ran, The Today Show featured our military and veteran discounts on their coupon site. Although both articles reference the military and veteran discounts we offer on TroopSwap, both media companies are featuring us to further the Hiring Our Heroes initiative to provide gainful employment to veterans and military spouses.

We are proud that the majority of our employees come from the military community, and we are excited for the additional jobs we will create as we grow. We’re incredibly fortunate to still have the opportunity to serve even though we no longer wear the uniform.

Anonymous said: Hi Blake: Do you guys have any plans on expanding to the Texas area, specifically, San Antonio. There are several large military bases here and this is also the home of the Medical Corp for all branches of the military now so I would venture to say your company would have a great deal of success here. I'm also a combat vet and if I was interested in applying to work for your company, how would I do that? Thanks for your service and continued service, all the best. Eddie

Hey Eddie,

San Antonio is slated for our next round of markets. What are you doing now and what are you interested in? I’m happy to open up a conversation now and to make sure you’re notified when we open up our San Antonio market.



What Does It Take to Build A Successful Company?

The twisting road of entrepreneurship can lead to some interesting encounters. Last week, I was fortunate enough to meet Steve Case, the Founder of AOL, Michael Dell, the CEO of Dell Computers and Dan’l Lewin, a senior executive at Microsoft and a Silicon Valley legend. Those meetings came after I had a conversation with Andy Rachleff, the Founder of Benchmark Capital, about the characteristics of successful CEOs.

The most powerful characteristic I recognized in each of the executives I met was the passion and the will they had to make their business succeed. But what are the underlying personality traits that lead to success? Entrepreneurship is ultimately the art of making people believe in what you are doing: from your first employees who leave their secure jobs to take a chance to your first customers who take a risk by spending their money with an unknown brand. Certainly, the last two years have taken their toll on my body and rubbing elbows with CEOs is a luxury, not a necessity, amidst many other time sensitive issues that demand my attention, but sometimes it’s nice to step back and listen to leaders who have built their businesses the hard way. The lessons learned aren’t necessarily intuitive.

For instance, Andy Rachleff asked me, “How many really successful CEOs can you think of who are “nice guys”?” I wasn’t able to name one on the spot and I’m not sure what to make of that observation.


Blake Hall is the CEO and Co-Founder of, the first ecommerce platform that provides military discounts exclusively to veterans, service members and their families. A combat veteran, Blake led a battalion reconnaissance platoon in Iraq for fifteen months during 2006-07. The Tacoma News Tribune featured his platoon for two weeks after the Army decorated nearly every member of his platoon for valor for heroic actions during a firefight in Mosul, Iraq. His educational degrees include a Bachelor of Science magna cum laude from Vanderbilt University and a Masters of Business Administration from Harvard Business School.

Entrepreneurship as an Adventure

Last week, Matthew Thompson delivered a talk to MBA students at William and Mary’s Mason School of Business. On his decision to leave Goldman Sachs in order to become the co-founder of TroopSwap, Thompson observed, “I evaluated the net present value of believing in myself and saw that outcome as far greater than money.” You can read more about his talk here.