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 Down Round + Issued Shares
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| Page 1 of 1 | Previous | Next | STARTUPCFO NOVEMBER 24, 2010 The downside of high valuations Dividends : Some pref shares have a cumulative dividend. These dividends usually convert into more shares at a fixed price. This can be dilutive depending on how long the shares are out there. Some term sheets will provide for a full ratchet, meaning that if you do a down round all shares reset to the new, lower price. | VC READY BLOG JULY 6, 2010 Anatomy of a Term Sheet: Conversion and Anti-dilution b) automatically (i) at the time of the company’s initial public offering (usually subject to the public offering share price being at least X times the per share price paid by the investors) or (ii) if at least X% of the investors agree to convert all preferred stock held by all investors (both (i) and (ii) being “Mandatory Conversion”). | | | | | |
| VC READY BLOG JULY 6, 2010 Anatomy of a Term Sheet: Conversion and Anti-dilution b) automatically (i) at the time of the company’s initial public offering (usually subject to the public offering share price being at least X times the per share price paid by the investors) or (ii) if at least X% of the investors agree to convert all preferred stock held by all investors (both (i) and (ii) being “Mandatory Conversion”). | |
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