Feld Thoughts

FEBRUARY 28, 2023

However, the lack of a conversion right also has implications for anti-dilution protection: in the U.S., In Germany, anti-dilution protection is achieved by issuing additional preferred shares. It is not uncommon for companies wanting to go public to relocate their registered office to the USA at an early stage.

Germany 165

Germany Liquidation Preference Option Pool Advisory Board 165

Feld Thoughts

JULY 29, 2011

Dick hated to think that he would be diluted by more than 20% of his stake over $50k and proposed that Jane receive 10% incremental equity for her $50k. However, there is a lot to be said for keeping things simple during the early stage of a startup. You can introduce complicated mechanisms for handling these transactions (e.g.

Equity 137

Equity Finance Pre-Money Valuation Denver 137

Feld Thoughts

JULY 14, 2015

Assuming equity is raised at or above that cap, the total dilution, before the new money, is 16.6% (equivalent to an equity financing of $1m at a $6m post money valuation. Here’s the scenario. A company raises $1m of seed money from angels in a convertible note with a $6m cap. So they recapitalize the company.

Recapitalization 70

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