Feld Thoughts

SEPTEMBER 9, 2015

If private capital is no longer available in the future, these companies will seek a public offering or acquisition. As an investor, would I rather own 30% of a company that is acquired for $300m in cash that had only raised $10m or 2% of a company with a paper value of $1b and $200m of liquidation preferences?

Liquidation Preference 70

Liquidation Preference Burn Rate Balance Sheet .Net 70

The Equity Kicker

AUGUST 1, 2012

In its quarterly filing yesterday Facebook disclosed that it spent $24m on ‘talent focused acquisitions’ in the first half of 2012. Three of the four are mobile companies (which rises to five of the six acquisitions Facebook made in total in H1 2012 if you include the bigger deals Instagram and Face.com ).

San Francisco 110

San Francisco Hiring Liquidation Preference Aggregator 110

Up and Running

AUGUST 17, 2015

C Corp versus LLC, non-competes, liquidation preferences, preferred versus common stock, and so on). While there is a wealth of information available online, it’s all a lot more tangible when you have case law and real life anecdotes attached to these considerations.

Entrepreneur 60

Entrepreneur Cofounder Angel Investor eCommerce 60

techcrunch.com

FEBRUARY 25, 2010

You could make the same argument about acquisitions and option pools. This is probably why investors’ case for a company to sell early f ocuses exclusively on the founder : in most early-stage acquisitions, the liquidation preferences and deal-sweeteners only work for investors and founders.

Liquidation Preference 63

Liquidation Preference Founder Option Pool Acquisition 63

Scott Edward Walker

DECEMBER 13, 2018

An acquihire is essentially the acquisition of a startup for its talent/team (rather than for its products or services). Following the closing of the acquisition, the startup will be dissolved, and all of its assets (including the purchase price proceeds) will be distributed to its investors and stockholders, as discussed below.

Founder 45

Founder Merger IP Liquidation Preference 45

Scott Edward Walker

JULY 7, 2011

Redemption rights are principally designed to protect investors from a situation where, after a period of time, their portfolio company is just moving “sideways” and, accordingly, is not an attractive acquisition target or IPO candidate.

Term Sheet 49

Term Sheet Redemption Venture Capital Preferred Stock 49

Startup Company Lawyer

FEBRUARY 21, 2010

Due to aggregate liquidation preferences that may exceed the acquisition price in an M&A deal, common stock may be rendered worthless. If you can’t figure this out yourself, you should probably build a liquidation preference spreadsheet to model how liquidation preferences work depending on M&A transaction value.

Retention 31

Retention Liquidation Preference Employee Common Stock 31

Hunter Walker

NOVEMBER 23, 2015

There was a team in NYC that built the spreadsheet app (they were another acquisition), and that team now runs all of GDocs today. Sometimes they’re more practical – I did a long one on liquidation preferences and how they inflate valuations, right before Sam Altman wrote his blog piece on the same thing.

Engineer 48

Engineer Liquidation Preference AJAX IPO 48

www.mattbartus.com

DECEMBER 9, 2012

This is usually done when the company is acquired — if the acquisition price per share of Series A is greater than $0.50, the VC will receive the spread between $0.50 and the acquisition price. I've just seen many startups unhealthily focus on the valuation versus things such as the liquidation preference or board control.

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40

www.founderinstitute.com

MARCH 2, 2010

August practices in the areas of mergers and acquisitions, securities offerings, commercial transactions, general corporate law and business bankruptcy. Participation" means that investors "double dip" by getting both their liquidation preference and their equity allocation. -

Term Sheet 40

Term Sheet Liquidation Preference Vesting San Diego 40

Gust

MAY 24, 2012

By contrast, venture capital and angel investments normally take the form of Preferred Stock with rights and preferences set forth in the company’s Certificate of Incorporation and other governance documents. In the case of an acquisition, the shares are tendered for cash and/or stock in the acquiring company.).

IPO 159

IPO Equity Common Stock Stock 159

thestartuplawyer.com

FEBRUARY 24, 2010

Contact The Startup Lawyer: Home Page About Contact FAQs Glossary Ryan Roberts Law: Home Page Social Networks: Facebook Twitter LinkedIn Flickr Delicious Digg Last.FM He obviously never launched a startup and got shafted by a co-founder. He obviously never launched a startup and got shafted by a co-founder.

Cofounder 40

Cofounder Founder Preferred Stock Startup 40

ithacaVC

NOVEMBER 1, 2011

And we know that the options will be worthless unless our liquidation preferences are cleared. Typically, the acquired company is gone and its shareholders have been paid in the acquisition. Last I checked, we VCs love it when a portfolio company is sold for a tidy profit. Not from the already paid former shareholders.

Vesting 60

Vesting Pre-Money Valuation Liquidation Preference Stock Options 60

Life Beyond Code

SEPTEMBER 27, 2011

When we were looking to talk to investors, Sramana introduced us to multiple investors and acted as an advisor helping us to navigate complex term sheet clauses like tranche financing and liquidation preferences. They also learn a lot about customer acquisitions strategies, what works and what doesn’t. Numerous lessons.

Programming 116

Programming Silicon Valley Bootstrapping Technical Review 116