services Liquidation Preference Related Topics 
SoCal CTO
SEPTEMBER 27, 2011
I was asked by a reader how much equity he should give out to early employees and to service providers in a very early stage startup. I'll get to service providers in a later post. Founders vs. Early Employees To help with this discussion, let me start with a definition of "early employee." million.
Steve Blank
MARCH 16, 2016
As part of the deal you signed with your investors was a term specifying the Liquidation Preference. The liquidation preference determines how the pie is split between you and your investors when there is a liquidity event. Your investors funded you for a liquidity event. Lessons Learned.
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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. In Ian’s post he rightly points out that stepping into a role with $15 million in paid-in capital that has already been spent can be a problem.
The Equity Kicker
OCTOBER 22, 2012
Good examples include Zappos’s legendary customer service, Steve Jobs’s almost maniacal obsession with great product design, and, as many of us were saying in Dublin at the weekend, the way Paddy and his team worked hard to make every element of the F.ounders experience top notch.
Both Sides of the Table
JANUARY 21, 2010
You need to know how liquidations preferences work. The agreement they sent said, “we may offer your services to our customers.&# This went unnoticed by the CEO and the lawyer. It’s an awesome service to entrepreneurs, thank you. You need to own your legal agreements. I asked a simple question.
Both Sides of the Table
FEBRUARY 15, 2016
People who think of fund raising as a “distraction away from the core business” fundamentally don’t understand that running a business comprises of: Shipping products, selling to & servicing customers, marketing, HR, recruiting, financial reporting AND making sure you have enough money to support operations.
The Equity Kicker
AUGUST 1, 2012
This analysis assumes there was no participating liquidation preference and lumps together companies that have raised money with those that haven’t, but I think it is fair to guess that in aggregate the investors in these companies didn’t get what they set out for. Karma – a social, mobile gifting service.
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