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Want to Know How VC’s Calculate Valuation Differently from Founders?

Both Sides of the Table

Back in 1999 when I first raised venture capital I had zero knowledge of what a fair term sheet looked like or how to value my company. Due to competitive markets we ended up with a pretty good term sheet until we needed to raise money in April 2001 and then we got completely screwed. No hidden terms.

Valuation 405
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One Book Every Entrepreneur and VC Should Own

Both Sides of the Table

When I first started as a startup CEO in 1999 there were no guides on raising venture capital. There were no explanations for all of the confusing details outlined in a term sheet. Founders don’t often think about “primary&# stock vs, “fully diluted&# stock in terms of voting rights. Drag along rights?

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How do the sample Series Seed financing documents differ from typical Series A financing documents?

Startup Company Lawyer

Founders Institute Plain Preferred Term Sheet (by WSGR – disclaimer, I represent the Founders Institute and was involved in drafting this document). This post assumes that you have a basic understanding of Series A financing terms. Dividend preference. Series Seed Financing Documents (by Fenwick & West).

Finance 70
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WHAT ARE SUPER PRO RATA RIGHTS?

Scott Edward Walker

Over the past few weeks, two of my clients have received financing term sheets in which the investors requested super pro rata rights. Accordingly, I thought it would be helpful for founders to discuss these rights and to point out the problems they create for startups. Introduction. Pro Rata Rights.

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Two investment deals are on the table. Which do you sign?

The Startup Toolkit

You’re facing two term sheets and have boiled them down to the most relevant facts, listed below. The financials immediately jump out when we talk about term sheets: what’s the valuation? Next, we check that we’re safe from any particularly onerous terms like participation preferred.

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Two investment deals are on the table. Which do you sign?

The Startup Toolkit

You’re facing two term sheets and have boiled them down to the most relevant facts, listed below. The financials immediately jump out when we talk about term sheets: what’s the valuation? Next, we check that we’re safe from any particularly onerous terms like participation preferred.

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Pari Passu or F.U.little guy

Professor VC

Startup outcomes tend to be very binary. Yes, there are a number of cases in the middle where having a senior or participating preference does make a difference in liquidation proceeds, but I argue that it does very little to overall returns in a diversified portfolio. Thank you sir, may I have another!"