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The Corrosive Downside of Acquihires

Both Sides of the Table

If the money comes from professional investors it usually has a “liquidation preference” meaning that their money comes out before the founders or common stock. (If That’s why liquidation preferences exist – downside protection. Almost certainly the startup would have raised some capital.

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Keep Term Sheets Simple for Quicker Cash to Spend

Startup Professionals Musings

It’s true that Angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists. Angels may want the first right to purchase shares held by the other angels in the deal before they are sold to an outside party. Liquidation preference.

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A Primer on Angel Investment ‘Simple Term Sheets’

Startup Professionals Musings

It’s true that angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists. Angels may want the first right to purchase shares held by the other angels in the deal before they are sold to an outside party. Liquidation preference.

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Keep Term Sheets Simple for Quicker Cash to Spend

Gust

It’s true that angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists. Angels may want the first right to purchase shares held by the other angels in the deal before they are sold to an outside party. Liquidation preference.

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Acquihires 101: Tips for Founders

Scott Edward Walker

How is the Deal Structured? The deal is typically structured as an asset purchase (as opposed to a stock purchase or merger) — though the acquirer often does not actually want the startup’s IP and/or other assets. The appeal from the startup’s perspective is a “soft landing.”.

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