Liquidation Preference, Seed Money and Technology

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Liquidation Preference

Seed Money

Technology

The Corrosive Downside of Acquihires

Both Sides of the Table

MAY 13, 2013

And they might give a premium if the team has been around a longer period of time, has built some hard-to-build proprietary technology or has some customer traction. Let’s assume $2 million in seed money. That’s why liquidation preferences exist – downside protection. Go do a startup.

Liquidation Preference

Liquidation Preference Early Stage Retention Lock-up Period

Should Founders Be Allowed to Take Money off the Table?

Both Sides of the Table

SEPTEMBER 2, 2009

In my first company I had to raise money in April 2001 or die. I took money with a 3x participating preferred liquidation preference with 8% compounded interest annually. Coupled with my participating preferred from 1999 and 2000 I had more than $55 million of liquidation preferences.

Founder

Founder Liquidation Preference Term Sheet Participating Preferred

StartUpRoar

The Corrosive Downside of Acquihires

Should Founders Be Allowed to Take Money off the Table?

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