Tim Keane

JANUARY 12, 2010

For angel groups, the distinction between groups and VCs on this issue is dwindling, especially as angel groups do bigger rounds of financing.   Note that this applies only to earl stage Series A-type equity financings and assumes no cash dividends are paid to investors. Second a liquidation preference and a participation.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

ithacaVC

MAY 1, 2013

The article states “When venture capitalists invest, they typically demand preferred shares that accrue a yearly dividend of about 8 percent. It must be paid out before the common shares, which are typically held by the founders and other employees.” The dividend goes unpaid until the company is sold.

Dividend 45

Dividend Liquidation Preference Common Stock Venture Capital 45

K9 Ventures

NOVEMBER 21, 2011

And that too usually when there is sufficient investor demand for the next round, i.e. the leverage needs to be in the company’s hand (rather than investors) for any type of founder liquidity to even be an option. If they have, then there is no reason the founders shouldn’t get some liquidity of their own.

Founder 87

Founder Common Stock Preferred Stock Stock 87

K9 Ventures

NOVEMBER 21, 2011

And that too usually when there is sufficient investor demand for the next round, i.e. the leverage needs to be in the company’s hand (rather than investors) for any type of founder liquidity to even be an option. If they have, then there is no reason the founders shouldn’t get some liquidity of their own.

Founder 84

Founder Common Stock Preferred Stock Stock 84

SoCal CTO

JULY 13, 2010

Creating Incremental Strategic Value - Ask the Angels , June 17, 2010 We can easily overlook the level of demand pull when we are assessing strategic value. liquidation preference. Your employees can’t also be your friends. Will you negotiate million dollars rounds of financing with cool VCs? People you don’t know.

Cofounder 175

Cofounder Technical Cofounder Term Sheet Startup 175

Professor VC

JULY 25, 2013

In investment parlance, it strictly means that new classes of stock have equal rights with prior classes in terms of liquidation preference, voting rights, etc. Their response was that we should be happy they didn''t ask for a participating preference on top of the seniority. Startup outcomes tend to be very binary.

Term Sheet 46

Term Sheet Silicon Valley Syndicate Syndication 46

The Equity Kicker

DECEMBER 30, 2013

Nassim Taleb is one of the most visionary thinkers in modern finance. but she will most likely now be sitting behind a $25m liquidation preference and have taken on new investors who want to exit the company for at least $240m (to get 3x on their investment). Thanks to Josh March for the pointer. Griffin puts it this way: 7.

Finance 129

Finance Liquidation Preference Valuation Harvest 129