The Equity Kicker
NOVEMBER 9, 2016
I just read a New York Times article that led with the sentence “Deep inside a Silicon Valley unicorn lurks a time bomb”. It turns out that ‘time bomb’ is the much maligned and, I suspect, little understood, liquidation preference. For these reasons our investments at Forward Partners are always in ordinary shares.
Both Sides of the Table
MARCH 1, 2016
And while there is a narrative that most LPs only want to invest in the long-standing Silicon Valley brands that have existed for the past 40 years, there is evidence that many LPs understand that it is possible for new entrants in our industry to stake out grounds of differentiation. The data itself bears out some of these fears.
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Agile VC
APRIL 17, 2011
liquidation preference, 6% accumulated dividend (1). Post-money valuation probably no higher than $12M (2). Series A-1 Preferred. liquidation preference, 6% accumulated dividend. Pre-money valuation was initially set higher but was adjusted to match the Ser B valuation. Series B Preferred.
Both Sides of the Table
MAY 13, 2013
If the money comes from professional investors it usually has a “liquidation preference” meaning that their money comes out before the founders or common stock. (If That’s why liquidation preferences exist – downside protection. Almost certainly the startup would have raised some capital.
K9 Ventures
JUNE 5, 2015
Low supply of companies with traction drove the valuations and deal sizes up. Valuations are rising to match. A typical seed round valuation may be $6M pre, raising $2M for an $8M post, or even as high as an $8M pre, raising $2M for a $10M post. The risk here is what I refer to as the curse of over-capitalization. The Epilogue.
Feld Thoughts
SEPTEMBER 9, 2015
Some will demonstrate strategically justifiable metrics and have fantastic ‘up round’ exits; others may see liquidation preferences kick in which will negatively impact founders and employees; others may fulfill the adage “IPO is the new down round” , which has been the case for more than half of the public companies on our list.
www.mattbartus.com
DECEMBER 9, 2012
A View from the Valley. Perspectives on issues affecting founders, startups and investors from a veteran startup lawyer in Silicon Valley. How to pump up your VC valuation. One possibility is to negotiate a higher valuation and offer warrants (i.e., Home About Matt Client references Contact. — 23 Comments.
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