The Equity Kicker

OCTOBER 22, 2012

The plan will iterate and change as the company develops but unless you have a good one you don’t really know if your big goal is achievable or even if the steps you are taking today are taking you towards it. This work is at least as important as the big stuff.

Liquidation Preference 134

Liquidation Preference Distribution Web Conversion 134

Scott Edward Walker

JULY 20, 2011

Entrepreneurs are often negotiating with guys (or gals) on the other side of the table who are far more deal savvy and experienced than they – e.g., venture capitalists, private equity guys, corporate development guys – and are masters at playing on their emotions.

Private Equity 78

Private Equity Liquidation Preference Option Pool Entrepreneur 78

ReadWriteStart

SEPTEMBER 2, 2011

Therefore, going down the fundraising path is something many technology entrepreneurs will need to do and a critical step in the development of their business. Including things like liquidation preferences impact both future rounds and ultimate liquidity to why VCs ask to expand an option pool before investing as part of their term sheet.

Cap Table 125

Cap Table Term Sheet Liquidation Preference Technical Review 125

Both Sides of the Table

APRIL 14, 2010

That means that the likely have a minimum of $15 million in liquidation preferences. It will usually be higher because the liquidation preference has a dividend so if the deal is long in the tooth assume that the liquidation preference might be $20-22 million. Take liquidation preferences head on.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Dividend 289

A Smart Bear: Startups and Marketing for Geeks

SEPTEMBER 8, 2010

New Blog Post: "You’re a developer, so why do you work for someone else?" You’re a developer, so why do you work for someone else? Great basic guide on VC / Startup liquidation preferences: [link]. Beware the trappings of liquidation preference | VentureBeat. 5 Mistakes Developers make Selling to Developers.

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Liquidation Preference Silicon Valley Startup Software 216

www.founderinstitute.com

MARCH 2, 2010

” Along with the managed business infrastructure, membership at Affinity Lab also means being a part of a community of coworkers a culture of people, a circle of friends, who are also in the process of developing their entrepreneurial businesses and organizations.

Term Sheet 40

Term Sheet Liquidation Preference Vesting San Diego 40

The Equity Kicker

JANUARY 18, 2013

What on earth does this termsheet mean with it’s liquidation preferences, anti-dilution and protective provisions? Like many industries venture capital has developed its own language which is confusing when you first come across it. Most of the concepts are actually pretty simple when you get into it.

Liquidation Preference 159

Liquidation Preference Venture Capital Dilution Video 159

Both Sides of the Table

JANUARY 21, 2010

I know he’s smart but you wouldn’t hire a Javascript developer to do your database design – would you? They’ll invite you out to events in which you’ll meet their other clients, you can get to know them socially and hopefully develop a real mentorship relationship where every conversation is not on the clock.

Southern California 318

Southern California Silicon Valley IP Stock Options 318

Both Sides of the Table

MARCH 3, 2013

But while universities are developing online content they are not fundamentally disrupting leaning because the method of delivery is not a new business model. We talked about Liquidation Preference, Voting Rights, and all of the other valuable terms crowd-funding investors don’t understand. Neither does Clayton.

Bankruptcy 403

Bankruptcy Offshore Liquidation Preference Balance Sheet 403

Up and Running

AUGUST 17, 2015

C Corp versus LLC, non-competes, liquidation preferences, preferred versus common stock, and so on). By the time of their restaurant’s grand opening, they were able to build a brand around their restaurant, perfect their menu, and develop a clear understanding of their operating costs.

Entrepreneur 60

Entrepreneur Cofounder Angel Investor eCommerce 60

Austin Startup

AUGUST 1, 2017

First, investors will sometimes be willing to take a higher valuation if it means getting a heavier liquidation preference. Should you accept a 3x liquidation preference with a $15MM valuation instead of a 1x preference at a $8MM valuation? If you’re confident you’ll get a huge exit, maybe.

Liquidation Preference 48

Liquidation Preference Common Stock Valuation Silicon Valley 48

www.readwriteweb.com

DECEMBER 29, 2011

Therefore, going down the fundraising path is something many technology entrepreneurs will need to do and is a critical step in the development of their business. While certainly not every business needs to raise venture financing, it is the path for many high-growth technology startups.

Cap Table 47

Cap Table Term Sheet Liquidation Preference Technical Review 47

Both Sides of the Table

NOVEMBER 4, 2009

If you’re thinking about joining as the director of marketing, product management manager, senior architect, international business development lead, etc. BTW, this ignores liquidation preferences which actually mean you’ll earn less. My reply is usually, “is it time for you to earn or to learn?&#.

Stock Options 418

Stock Options Stock Liquidation Preference Option Pool 418

Both Sides of the Table

SEPTEMBER 28, 2013

The don’t understand VC liquidation preferences or multiple return expectations. It is because when you share too much of this information with staff you develop an “options culture” the I find unhealthy. As a startup CEO you’ll have to develop your own comfort level with what to share and with whom.

Startup 417

Startup Dilution San Diego Stock Options 417

Up and Running

DECEMBER 30, 2015

Founders should pay attention to the liquidation preference in the term sheet to ensure it does not become detrimental to them in a less than favorable exit. See Also: 10 Ways to Develop Your Leadership Team. I made the rookie mistake of not hiring an attorney when raising our first round. Better yet, get legal counsel.

Due Diligence 84

Due Diligence Valuation Liquidation Preference Redemption 84

genylabs.typepad.com

SEPTEMBER 24, 2011

where your stock sits in the liquidity preference stack. what rights and preferences the founders and the other investors have. Cash is king and it's a developer's market out there right now. what kind of stock you are getting. what your rights are. Posted by: Post Work | April 09, 2008 at 07:57 AM. Good point.

Equity 40

Equity Technical Review San Jose Stock 40

Feld Thoughts

JULY 14, 2015

It usually happens in a later round, when the company is in fact worth much less than the liquidation preference overhang and insiders use a pay-to-play and a low valuation to reset the preferences and the cap table. And developing a reputation for recapping seed rounds is, in my book, silly. Sure – it happens.

Recapitalization 70

Recapitalization Pre-Money Valuation Post-Money Valuation Angel Investor 70

Scott Edward Walker

APRIL 9, 2012

Indeed, as a corporate lawyer for 18+ years, I have seen this development first-hand. They are also typically granted certain additional economic rights (like Series A investors), such as pro-rata rights and a liquidation preference. This post is the first part of a three-part primer on convertible note seed financings.

Preferred Stock 87

Preferred Stock Finance Common Stock Liquidation Preference 87

Both Sides of the Table

SEPTEMBER 6, 2010

So I developed this standard line that I used for all employees. That said, don’t complicate the topic – If you’re the founder of a company you likely know a lot about things like Liquidation Preferences and how they affect value allocations when the company is sold.

Stock Options 294

Stock Options Stock Valuation Liquidation Preference 294

K9 Ventures

JUNE 5, 2015

As it happens almost every few years there was a new normal developing. The thinking is that since these companies will always be valued higher than the liquidation preference of the investment, therefore there is downside protection, and so they’re only playing for the upside.

Seed Stage 48

Seed Stage Venture Capital Early Stage Valuation 48

Spencer Fry

APRIL 17, 2017

When I first started building Coach, I invested $30k of my own money to get a prototype working and acquire our first half dozen customers, but I (and the contract developer who I was working with) were spread too thin. As a startup in 2017, having limited resources can in and of itself sink your entire ship. Something has to give.

Bootstrapping 63

Bootstrapping Cap Table Liquidation Preference Cofounder 63

Professor VC

APRIL 1, 2010

I had a discussi on with another angel investor a few months ago and he was bragging about the deal he just struck that included a 3X participating liquidation preference. I take CFO roles in early stage companies and participate on the management team during the early financings and business model development phases.

Term Sheet 32

Term Sheet Angel Investor San Jose Venture Capital 32

Professor VC

JUNE 6, 2016

I can just picture Mr. Rogers saying "Children, can you say participating preferred stock with an uncapped 3x liquidation preference and a full ratchet?" In looking at how syndicates have developed, there have been a lot of positives for both angels and entrepreneurs. I got over it.

Syndicate 28

Syndicate Syndication Cap Table Ratchet 28

Pascal's View

DECEMBER 30, 2012

In The Founder’s Dilemmas Wasserman revisits his most well developed dilemma, Rich vs. King. He convincingly argues that, while the passionate desire among entrepreneurs for both wealth and control seem complementary, as entrepreneurial motivations they turn out to exist in perpetual tension with one another.

Cofounder 34

Cofounder Liquidation Preference Vesting Equity 34

SoCal CTO

JULY 13, 2010

liquidation preference. The loyalties that develop during that time are strong and hard to break. 7 Ways Nokia Can Win Again - ArcticStartup , June 18, 2010 In the eyes of the developers and the startup community, Nokia went from hero to zero in less than 3 years. Yes, even bootstrappers. And be generous.

Cofounder 175

Cofounder Technical Cofounder Term Sheet Startup 175

www.mattbartus.com

DECEMBER 9, 2012

I've just seen many startups unhealthily focus on the valuation versus things such as the liquidation preference or board control. I've just seen many startups unhealthily focus on the valuation versus things such as the liquidation preference or board control. Developers, designers, support engineers & more!

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40

thestartuplawyer.com

FEBRUARY 24, 2010

I think you'll have trouble developing your idea without bringing on people, probably as co-founders. Even if you are able to do so w/o bringing these skill people on, potential investors will likely ding you since you can't implement the idea (even if already 'developed').

Cofounder 40

Cofounder Founder Preferred Stock Startup 40