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

Both Sides of the Table

Things like “ participating preferred stock &# in legalese unsurprisingly never actually call out, “hey, this is the participating preferred language.&# We got a3x participating liquidation preference with interest (not participating with a 3x cap, but 3x participating. I turned them down.

Valuation 405
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Cliff Notes S-1: Kayak ? AGILEVC

Agile VC

liquidation preference, 6% accumulated dividend. Pre-money valuation was initially set higher but was adjusted to match the Ser B valuation. Series B Preferred. liquidation preference, 6% accumulated dividend (1). Pre-money valuation was approx. Series B-1 Preferred.

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Common Stock vs. Preferred Stock in Venture Funding Transactions

Growthink Blog

The question is whether they need to issue common or preferred stock. The answer depends on how and what rights are defined in the preferred stock. The liquidation preference means what is sounds - namely that preferred stock holders with this right get all of their money back (i.e.

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Shark Tank Season 4 week 4 breakdown

Lightspeed Venture Partners

Week three’s breakdown covered topics like how hard momentum is to turn around, and how participating preferred stock works. As Cuban pointed out, this is a “down round” Zomm is seeking $2M for 10% of the company, implying an $18M pre money valuation today. BACK 9 DIPS.

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Model Cap Table

ithacaVC

For example, cell E2 is the spot to put in the negotiated pre-money valuation. The model includes a simple waterfall analysis using both participating and non-participating preferred (see line 44 and then columns M and O). The green box at row 45 just provides a nice double check on post-money valuation calculations.

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Convertible Note Seed Financings: Econ 101 for Founders

Scott Edward Walker

ii) why are convertible notes issued instead of shares of common or preferred stock? This part 2 will address the economics of a convertible note seed financing and the three key economic terms: (i) the conversion discount, (ii) the conversion valuation cap and (iii) the interest rate. What Is a Conversion Discount?

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The Convertible Note Discount Price Cap

The Startup Lawyer

For this article, let’s assume this equity is the Series A Preferred Stock purchased by a venture capital fund. For example, if a venture capital fund purchases Series A Preferred Stock at $1.00 per share, the discount may allow the angel investor to purchase the same Series A Preferred Stock at $0.75