Both Sides of the Table

JULY 22, 2010

Things like “ participating preferred stock &# in legalese unsurprisingly never actually call out, “hey, this is the participating preferred language.&# We got a3x participating liquidation preference with interest (not participating with a 3x cap, but 3x participating.

Valuation 405

Valuation Liquidation Preference Pre-Money Valuation Term Sheet 405

Feld Thoughts

FEBRUARY 28, 2023

In the USA, the conversion right ensures that holders of preferred shares are not disadvantaged compared to holders of common shares; in Germany, this legal consequence must result directly from the structure of the preferred shares. However, the lack of a conversion right also has implications for anti-dilution protection: in the U.S.,

Germany 165

Germany Liquidation Preference Option Pool Advisory Board 165

Startup Company Lawyer

MARCH 14, 2010

In addition, I think that a “peace treaty&# between early-stage investors and startup companies on standard terms (at least at a term sheet level) is a step in the right direction. The primary rights in these documents, ranked in order of importance in my opinion are: Non-participating preferred liquidation preference.

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

The Startup Toolkit

NOVEMBER 4, 2011

Roughly 33% dilution for full round ($2mm pre-money). 40% dilution for full round (roughly $2mm pre-money). What’s the dilution? Next, we check that we’re safe from any particularly onerous terms like participation preferred. 500k now, plus commitment to help close $500k more from other angels.

Term Sheet 31

Term Sheet Dilution Participating Preferred B2C 31

The Startup Toolkit

NOVEMBER 4, 2011

Roughly 33% dilution for full round ($2mm pre-money). 40% dilution for full round (roughly $2mm pre-money). What’s the dilution? Next, we check that we’re safe from any particularly onerous terms like participation preferred. 500k now, plus commitment to help close $500k more from other angels.

Term Sheet 20

Term Sheet Dilution Participating Preferred B2C 20

www.payne.org

SEPTEMBER 22, 2011

2 Stock Classes: Common and Preferred. 3 Dilution. If the company is acquired for $5m (or less), the preferred stock holders get all of the proceeds and the common stock holders get nothing. The total preference is less of an issue in early stage companies (e.g. diluted) terms. From Payne.org Wiki.

Equity 56

Equity Employee Vesting Preferred Stock 56