2001, Participating Preferred and Venture Capital

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2001

Participating Preferred

Venture Capital

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

Both Sides of the Table

JULY 22, 2010

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. 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. 4 * $4 million) and not $4 million.

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

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. Coupled with my participating preferred from 1999 and 2000 I had more than $55 million of liquidation preferences.

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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