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Remove Liquidation Preference Remove Pay to Play Remove Post-Money Valuation Related Topics
Seed Capital Syndication Finance Reputation Entrepreneur Cofounder Product Conversion Hiring Cost More Related Topics >
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Founders – Use Your Down Round To Clean Up Your Cap Table

Feld Thoughts

FEBRUARY 9, 2016

I’ve seen every imaginable type of liquidation preference structure, pay-to-play dynamic, preferred return, ratchet, share/option bonus, option repricing, and carveout. I suffered through the next financing after implementing a complex structure, or a sale of the company, or a liquidation.

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Cap Table Down Round Liquidation Preference Founder 70
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The Silliness Of Recapping Seed Rounds

Feld Thoughts

JULY 14, 2015

A company raises $1m of seed money from angels in a convertible note with a $6m cap. 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. So they recapitalize the company. Sure – it happens.

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