liquidation preference is the amount that must be paid to a preferred stock holder before any sale proceeds may be paid to the holders of common stock (i.e., The amount of the liquidation preference is usually expressed as a multiple, with the most common liquidation preference being “1X non-participating.” MORE >>

typical startup goes throughseveral rounds of funding, and at each round you want to take justenough money to reach the speed where you can shift into the nextgear. At Viaweb we got our first $10,000 ofseed money from our friend Julian, but he was sufficiently richthat its hard to say whether he should be classified as a friendor angel. MORE >>

I learned all of this myself on your side of the table raising money at my first company. Many companies that are raising B or C venture capital rounds right now raised their initial money in 2005-2008. That means that they likely raised money at a particularly high price relative to 2010 prices. Clean up your own shite. MORE >>

Question: In a Series A, the investor is proposing a preferred stock with warrants. In simpler terms, let’s assume that it’s a Preferred A investment of $1m at $1 / share (or 1m shares of stock). Let’s assume a post-money valuation of $4m. for another 1m shares. from the warrant). Got that? MORE >>

Because now you have more to lose than just a company and your (or someone else’s) money. Contact The Startup Lawyer: Home Page About Contact FAQs Glossary Ryan Roberts Law: Home Page Social Networks: Facebook Twitter LinkedIn Flickr Delicious Digg Last.FM He obviously never launched a startup and got shafted by a co-founder. MORE >>