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

Startup Company Lawyer

MARCH 14, 2010

The primary rights in these documents, ranked in order of importance in my opinion are: Non-participating preferred liquidation preference. If new investors get better rights in a future equity financings (such as registration rights, price-based anti-dilution, redemption rights, etc.), Anti-dilution protection.

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). Vision for B2B, sales-driven technology. What’s the dilution? Next, we check that we’re safe from any particularly onerous terms like participation preferred. 1.25mm total. Looks good.

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). Vision for B2B, sales-driven technology. What’s the dilution? Next, we check that we’re safe from any particularly onerous terms like participation preferred. 1.25mm total. Looks good.

Term Sheet 20

Term Sheet Dilution Participating Preferred B2C 20

Scott Edward Walker

JUNE 9, 2019

For example, if an investor owns 20% of the equity of a startup on a fully-diluted basis following the closing of a Series A round, it will have the right to purchase 20% of the shares of the preferred stock issued in the subsequent Series B round. The post WHAT ARE SUPER PRO RATA RIGHTS?

Preferred Stock 56

Preferred Stock Term Sheet Dilution Stock 56

Scott Edward Walker

APRIL 9, 2012

Most sophisticated investors, however, will not accept shares of common stock for their investment and will push hard for shares of preferred stock, with special rights (as discussed below). A valuation of the startup is thus unnecessary; and, if there is no valuation, there are no problems of dilution, taxes and option pricing.

Preferred Stock 87

Preferred Stock Finance Common Stock Liquidation Preference 87

www.payne.org

SEPTEMBER 22, 2011

2 Stock Classes: Common and Preferred. 3 Dilution. Ive seen companies with $75m of preference, and very frustrated common stockholders that realize the company needs to get acquired for $100m or more for them to start making any money. (To Common stock holders can use the "total preference" to estimate their returns.

Equity 56

Equity Employee Vesting Preferred Stock 56