Feld Thoughts

JULY 11, 2010

It got the name “pay to play&# , but was just another form of bribery. So, if I contribute $1,000 to the campaign of the Colorado state treasurer, I violate this SEC rule and become someone who is “paying to play.&# Now, don’t misunderstand me – I think pay to play is grotesque.

SEC 133

SEC Pay to Play Colorado Campaign 133

Feld Thoughts

FEBRUARY 9, 2016

I watched, participated, and suffered through every type of creative financing as companies were struggling to raise capital in this time frame. I’ve seen every imaginable type of liquidation preference structure, pay-to-play dynamic, preferred return, ratchet, share/option bonus, option repricing, and carveout.

Cap Table 70

Cap Table Down Round Liquidation Preference Founder 70

Feld Thoughts

JULY 14, 2015

It usually happens in a later round, when the company is in fact worth much less than the liquidation preference overhang and insiders use a pay-to-play and a low valuation to reset the preferences and the cap table. and the investors, who put up $1m in a convertible note, get 0.1%. Sure – it happens.

Recapitalization 70

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