Both Sides of the Table

FEBRUARY 23, 2015

This is because this “liquidation preference” gets returned to investors before you see any money – restricting the executive outcomes in mid-sized exits. There is often money to be made in finding places with under-valued IP. We looked at the IP and realized it was highly differentiated / hard to replicate.

Technical Review 150

Technical Review Liquidation Preference Silicon Valley IP 150

Both Sides of the Table

JANUARY 21, 2010

Shame about not getting it in legal writing that you owned the original IP. Forget to get around to setting up that Employee Stock Option Plan and want to be able to give the early guys their options at a low strike price? They usually ask for warrants (basically like a stock option) in exchange for taking a deferred fee.

Southern California 318

Southern California Silicon Valley IP Stock Options 318

Both Sides of the Table

SEPTEMBER 18, 2014

At an accelerator … Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Gust

SEPTEMBER 17, 2014

Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago. Stock Option plans. Him: Not so good. And so forth.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Tim Keane

JANUARY 12, 2010

Term-sheets for preferred stock offerings are designed to protect the investor in case things don’t go as well as planned. Second a liquidation preference and a participation.   Say I invest $1MM in a company and receive 40% of the stock.   First , dividends.   I’ve never seen it in practice.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Scott Edward Walker

DECEMBER 13, 2018

The deal is typically structured as an asset purchase (as opposed to a stock purchase or merger) — though the acquirer often does not actually want the startup’s IP and/or other assets. The appeal from the startup’s perspective is a “soft landing.”. How is the Deal Structured?

Founder 45

Founder Merger IP Liquidation Preference 45

ithacaVC

APRIL 25, 2012

Seriously, pre-money valuation is a function of many things (team strength, size of market, IP, hotness of sector, etc.) In my view, starting off a VC relationship by diving into perhaps the most critical economic term is kind of like, well, moving too fast on a first date. that will not all be readily apparent at the beginning.

Valuation 49

Valuation Pre-Money Valuation Liquidation Preference Preferred Stock 49