Altgate
DECEMBER 16, 2010
→ More on Liquidation Preferences Posted on December 16, 2010 by admin A long time ago I had asked a VC about what pre-money valuation he was planning to put in a term sheet he had promised to send over. .&# He said it as a joke, but it is totally true that pre-money valuation is just one of a handful of key economic terms in a term sheet.
Both Sides of the Table
JULY 22, 2010
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. 4 * $4 million) and not $4 million.
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ithacaVC
DECEMBER 14, 2011
Nothing better than sitting at LGA writing blog posts. Continuing with the “No Mess” theme of commenting on things that give VCs pause, I thought it would be good to touch on liquidation preference. Specifically, “too much” liquidation preference (I will use “LP” for liquidation preference).
Both Sides of the Table
MAY 30, 2015
When you do a convertible note with a cap that converts into the next round of funding one of the unintended consequences is that if you’re successful and raise at a larger price than your cap the early angels often get “multiple liquidation preferences” on their dollars in. If you do I will amend this blog post.
Steve Blank
MARCH 16, 2016
Get your company talked about in the blogs and newsletters they read. As part of the deal you signed with your investors was a term specifying the Liquidation Preference. The liquidation preference determines how the pie is split between you and your investors when there is a liquidity event.
Both Sides of the Table
FEBRUARY 23, 2015
I wrote this conundrum and the need to take charge of how the market define your skills in my much-read blog post on “ personal branding.” This is because this “liquidation preference” gets returned to investors before you see any money – restricting the executive outcomes in mid-sized exits.
Both Sides of the Table
JULY 25, 2011
To this day I’m still surprised how few CEOs really understand the differences between 2x liquidation preference and a liquidation preference with a 2x cap. Or what “participating preferred&# stock is and how it can screw you. This series inspired me to start my blog as a VC.
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