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Want to Know How VC’s Calculate Valuation Differently from Founders?

Both Sides of the Table

Back in 1999 when I first raised venture capital I had zero knowledge of what a fair term sheet looked like or how to value my company. More likely what you’ll see if you have an aggressive term sheet is “participating preferred&# stock. 4 * $4 million) and not $4 million. You reap what you sow.

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One Book Every Entrepreneur and VC Should Own

Both Sides of the Table

When I first started as a startup CEO in 1999 there were no guides on raising venture capital. To this day I’m still surprised how few CEOs really understand the differences between 2x liquidation preference and a liquidation preference with a 2x cap. This article originally ran on TechCrunch.

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Should Founders Be Allowed to Take Money off the Table?

Both Sides of the Table

I took money with a 3x participating preferred liquidation preference with 8% compounded interest annually. Coupled with my participating preferred from 1999 and 2000 I had more than $55 million of liquidation preferences. I know because I’ve been there. Tweet This Post Facebook.

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Venture Deals 4e German Edition

Feld Thoughts

In the USA, the conversion right ensures that holders of preferred shares are not disadvantaged compared to holders of common shares; in Germany, this legal consequence must result directly from the structure of the preferred shares. The boom years of 1998 (79 IPOs), 1999 (175 IPOs), and 2000 (142 IPOs) are long gone.

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