The downside of high valuations
NOVEMBER 24, 2010
When it comes to deal structuring, the higher you push the valuation, the more “protections investors will build in. These dividends usually convert into more shares at a fixed price. This means that if you issue shares later at a lower price than the shares you issued today (“down round ) the previous shares get repriced at somewhere between those two issue prices. 53% of deals had participating prefs.