Later-stage rounds and “setting the bar too high”

Chris Dixon

Preferred shares behave like a stock on the upside and a bond on the downside. Note that I have no connection to Dropbox so am just assuming standard deal structure and basing numbers on public reports.

allensblog: "Fully-Diluted"

Allen's Blog

In a deal recently, the term sheet offered by the prospective investor contained a reference to the term: "fully-diluted" The company accepted the term sheet and the lawyers drafted the documents. On review by the Company, however, it became clear that the parties had different interpretations of "fully-diluted" Due to some idiosyncracies of the company's capital structure, the disagreement had a significant impact on the deal structure.

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Keep Term Sheets Simple for Quicker Cash to Spend

Gust

Remember a term sheet agreement is not a deal until the check clears. It’s true that angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists.

The Corrosive Downside of Acquihires

Both Sides of the Table

A couple of tech giants throw millions around in either cash (for which they have hoards) or part with some publicly traded stock. Many buying companies price these deals on the basis of $1 million per engineer on the team for an early-stage deal.

Keep Term Sheets Simple for Quicker Cash to Spend

Startup Professionals Musings

Remember a term sheet agreement is not a deal until the check clears. It’s true that Angel investors typically do not present entrepreneurs with overly complicated deal structures, especially when compared to venture capitalists.