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Venture Capital Term Sheets – Redemption Rights

Scott Edward Walker

Redemption Rights What Are Redemption Rights? A redemption right is another feature of preferred stock and permits the investors to require the company to repurchase their shares after a specified period of time; it is, in effect, a “put” right – that is, the investors may elect to put their shares back to the company.

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Flexible VC, a New Model for Companies Targeting Profitability

David Teten

The value ascribed by subsequent investors (in a secondary); buyers (acquisition); or the public markets (IPO). This does not account for the value of any residual stake investors may retain after full redemption. John Berger observed, “In many countries (like the US) you can’t force a board to make a redemption payment or dividend.

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Groupon's S-1: From Zero to Like? Billions in 30 Months ? AGILEVC

Agile VC

3) Groupon’s Business is Like An ATM: Groupon is currently unprofitable on a GAAP basis thanks to acquisition related expenses in 2010 as well as ongoing marketing spend to acquire customers. Groupon’s 2010 net loss includes $203M expenses related to acquisitions of several deal businesses. . Author howerl.

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From Loyalty Programs To Fan Clubs, A Paradigm Shift

YoungUpstarts

Real-time points and mileage redemption appeared at the POS, first introduced over a decade ago and now going mainstream. Local businesses in Singapore report up to 5x increase in repeat business , up to 7x increase in fan acquisition rates and 10x increase in word of mouth. Early results are exciting.

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5 Interesting Observations on the Groupon Model from Academic Research

ReadWriteStart

Observation 2: Spending beyond face value at redemption is not predictive of profitability. Dr. Dholakia tested 3 hypotheses for attributes that would increase the likelihood of a profitable Groupon: "A) New customer acquisition efficacy, (B) spending beyond the Groupon's face value, and (C) repeat full-price purchase."

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Why In-Game Advertising Sucks

Austin Startup

When they are understandably timid with their strategy, everyone loses: players have to sit through irrelevant ads, developers make paltry revenues, and advertisers’ acquisition suffers. Ineffective ads frustrate players, make paltry revenues for developers, and damage advertisers’ acquisition. An Alternative Option ( ??, ??, ?? )

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Handshakes, Term Sheets and Trust

Diego Basch

I read this story yesterday about a failed startup acquisition. Acquisition talks go well. Startup day-to-day is disrupted during the lengthy acquisition process. For whatever reason, acquisition falls through. A term sheet increases the likelihood that the acquisition will go through, even if it’s non-binding.