The Equity Kicker

NOVEMBER 20, 2015

Match closed up 23% at a valuation of $3.5bn and Square was up 45% at a valuation of $4.2bn. However in the run up to its IPO Square had indicated it would go out at between $11 and $13 per share, and then ended up at $9, and in October last year Square raised $150m at a $6bn valuation.

IPO 60

IPO Matching Ratchet Valuation 60

www.seriesseed.com

DECEMBER 9, 2012

I completely understand not wanting to put in an onerous full ratchet but the fact that there is no weighted average ratchet seems a bit bizarre. In my experience, it is highly unlikely that this term will come into play in a Series Seed since the valuation is presumably very low. I read through the docs, well done.

Term Sheet 40

Term Sheet Ratchet Dilution Equity 40

Gust

SEPTEMBER 17, 2014

Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago. People seem concerned about valuation. At an accelerator ….

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

abovethecrowd.com

APRIL 20, 2016

One key to this population growth has been the remarkable ease of the Unicorn fundraising process: Pick a new valuation well above your last one, put together a presentation deck, solicit offers, and watch the hundreds of million of dollars flow into your bank account. By January of 2016, that number had ballooned to 229.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Haystack

APRIL 10, 2018

with a median post-money valuation of $10.7M — these are the highest Pitchbook has recorded. I would bet most of them can barely cut through the flow, and then they have to find the best deals and look over their shoulder for a larger VC who can pick off the deal, give the founder more money, and ratchet up the valuation in the process.

Seed Stage 60

Seed Stage San Francisco Ratchet Silicon Valley 60

Up and Running

MAY 21, 2015

All the other sharks typically make a traditional equity investment; for example they’ll invest $100,000 at a $1,000,000 business valuation, and take 10 percent of the business. The version of “anti-dilution protection” that most benefits outside investors is commonly called a “full ratchet.” Wonderful, and pretty much everybody else.

Covenant 60

Covenant Liquidation Preference Ratchet Dilution 60

Feld Thoughts

FEBRUARY 9, 2016

I’ve seen every imaginable type of liquidation preference structure, pay-to-play dynamic, preferred return, ratchet, share/option bonus, option repricing, and carveout. But, as you raise more money at higher valuations, this will normalize. Then, if you end up doing a down round, it suddenly matters a lot.

Cap Table 70

Cap Table Down Round Liquidation Preference Founder 70

Growthink Blog

APRIL 25, 2011

Its very charter utterly excludes the notion of fostering development, opting instead for a one-way ratchet that can only lead to longer, more costly development cycles with no improvement in real safety for efficacy.” “Our Our outlook is solely dependent on the FDA. We are doing well in Europe, but the processes for the U.S.

Silicon Valley 69

Silicon Valley Ratchet Private Equity Startup 69

Professor VC

JUNE 6, 2016

I can just picture Mr. Rogers saying "Children, can you say participating preferred stock with an uncapped 3x liquidation preference and a full ratchet?" Some are able to offer better terms (pro-rata rights, lower valuation caps) than an individual could get. Well, maybe so after watching his middle finger salute.

Syndicate 28

Syndicate Syndication Cap Table Ratchet 28

Jeff Hilimire

OCTOBER 7, 2013

Zynga, the poster child for recent day wild valuations, went from media darling with a huge IPO to very quickly struggling to keep its head above water. I’m betting that as more mobile game studios generate substantial returns, the angel and VC community will ratchet up their interest in investing in these studios and entrepreneurs.

Mobile 48

Mobile Ratchet IPO Atlanta 48

Rob Go

NOVEMBER 30, 2015

There is greater variability in the size, valuation, and stage of companies that raise seed rounds, and often, companies raise 2 or 3 seed rounds before a series A. While we continue to focus on companies that are very early, usually well before PMF, we also hear of more and more seed funds that “want to see more traction” before investing.

Later Stage 28

Later Stage Marketing Early Stage Ratchet 28

This is going to be BIG.

SEPTEMBER 6, 2019

I don’t know where its valuation will wind up, but I believe that there is a going concern there that is worth billions of dollars. These late stage funds are often the ones that get crunched in market downturns—because they find themselves over their skis quickly on valuation—whereas early stage funds have longer time horizons anyway.

Ratchet 116

Ratchet Early Stage Valuation IPO 116