Both Sides of the Table

MAY 13, 2013

If the money comes from professional investors it usually has a “liquidation preference” meaning that their money comes out before the founders or common stock. (If So why not announce big, hairy audacious goals on recruiting the best mobile talent with sign-on bonuses and retention plans? We get the mechanics.

Liquidation Preference 357

Liquidation Preference Early Stage Retention Lock-up Period 357

Startup Company Lawyer

FEBRUARY 21, 2010

I was speaking at an event last month to a group of CEOs and was surprised by the number of CEOs that were worried about the value of their common stock in a M&A transaction. Due to aggregate liquidation preferences that may exceed the acquisition price in an M&A deal, common stock may be rendered worthless.

Retention 31

Retention Liquidation Preference Employee Common Stock 31

Up and Running

DECEMBER 1, 2015

More often than not, equity compensation is an attraction and retention tool, rather than a replacement to salary. Typically, employers that offer employees equity compensation will do so in the form of common stock, preferred stock, or stock options.

Equity 60

Equity Employee Stock Options Vesting 60

Gust

JULY 23, 2012

A: The board and investors will likely recognize that reputation for community involvement enhances a company’s culture and standing-at-large, which in turn will facilitate recruiting and retention. Q: Wouldn’t a contribution of early-stage company stock have a very small impact?

Stock 114

Stock Capital Gains Warrant Stock Options 114

Agile VC

FEBRUARY 2, 2012

As a result, the amount these employees pay the company for these exercises is non-trivial… in 2011 these common stock purchases generated about $1 billion in cash for Facebook. To put that in perspective, Facebook’s overall operations (which are highly profitable) generated about $1.5 billion in cash profit last year.

IPO 100

IPO South Korea Venezuela Revenue 100