Lightspeed Venture Partners

OCTOBER 7, 2012

Week three’s breakdown covered topics like how hard momentum is to turn around, and how participating preferred stock works. As he said, “Great innovations solve problems or reduce costs. I’ve been writing up reviews of this season’s Shark Tank pitches from a silicon valley VCs perspective. BACK 9 DIPS.

Technical Review 110

Technical Review Technical Cofounder Valuation Pre-Money Valuation 110

Lightspeed Venture Partners

OCTOBER 1, 2012

in sales but made only $20k in profit, despite not having any advertising costs. The product retails for $39.95, wholesales for $19.95, and costs just $5 to make. But if the company is sold for less than their post money valuation, they would prefer to get their money back. Last year it did $3.9M

Pre-Money Valuation 158

Pre-Money Valuation Valuation Participating Preferred Preferred Stock 158

Startup Company Lawyer

MARCH 14, 2010

The primary rights in these documents, ranked in order of importance in my opinion are: Non-participating preferred liquidation preference. What rights does the Series Seed have? Ted Wang explains most of the highlights of the documents. The investor receives their money back and the remainder goes to the common. .

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

The Startup Lawyer

JULY 13, 2011

While using these document sets can help reduce transaction costs and the time to close, a startup can run into trouble by trusting deal documents without verification. For example, the well-known Series Seed has a 1x non-participating liquidation preference , while the version I reviewed had a 1x participating preference.

Preferred Stock 68

Preferred Stock Liquidation Preference Participating Preferred Stock 68

Both Sides of the Table

SEPTEMBER 2, 2009

I took money with a 3x participating preferred liquidation preference with 8% compounded interest annually. Coupled with my participating preferred from 1999 and 2000 I had more than $55 million of liquidation preferences. I know because I’ve been there. year old boy and another one due in 1 months.

Founder 329

Founder Liquidation Preference Term Sheet Participating Preferred 329

Scott Edward Walker

APRIL 9, 2012

Speed, simplicity and cost. Indeed, a startup could close a convertible note round in a day or two by merely issuing a 2-3 page promissory note, which could cost as little as $1,500-$2,000 in legal fees (or a little more if a note purchase agreement is also executed, which is customary).

Preferred Stock 87

Preferred Stock Finance Common Stock Liquidation Preference 87

Altgate

DECEMBER 18, 2008

Let’s recap how expensive a 3x liquidation preference really is. Say you raise $8MM at $17MM pre-money ($25MM post) with a 3x participating preferred. Even companies that have countercyclical businesses are finding cash more expensive. Even companies that have countercyclical businesses are finding cash more expensive.

Liquidation Preference 31

Liquidation Preference Venture Capital Post-Money Valuation Participating Preferred 31