2001, Early Stage and Participating Preferred

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2001

Early Stage

Participating Preferred

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

Both Sides of the Table

JULY 22, 2010

Due to competitive markets we ended up with a pretty good term sheet until we needed to raise money in April 2001 and then we got completely screwed. More likely what you’ll see if you have an aggressive term sheet is “participating preferred&# stock. Those were the dog days of entrepreneurship. This is a shame.

Valuation

Valuation Liquidation Preference Pre-Money Valuation Term Sheet

Should Founders Be Allowed to Take Money off the Table?

Both Sides of the Table

SEPTEMBER 2, 2009

A friend of mine is a serial entrepreneur and is running a high-profile, early stage company in NorCal. In my first company I had to raise money in April 2001 or die. I took money with a 3x participating preferred liquidation preference with 8% compounded interest annually. I believe this is wrong.

Founder

Founder Liquidation Preference Term Sheet Participating Preferred

StartUpRoar

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

Should Founders Be Allowed to Take Money off the Table?

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