The Corrosive Downside of Acquihires

Both Sides of the Table

Many buying companies price these deals on the basis of $1 million per engineer on the team for an early-stage deal. That’s why liquidation preferences exist – downside protection. And wants to structure a huge payout for the employees that will remain.

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. Liquidation preference.

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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. Liquidation preference.

in search of.the ideal term sheet

Seed Stage Capital

Rather than comment on it directly, I am re-publishing sections from a post on TechCrunch: " The key terms include the elimination of participation with preferred stock, a 1x liquidation preference, and single trigger vesting acceleration on acquisition.

The downside of high valuations

StartupCFO

When it comes to deal structuring, the higher you push the valuation, the more “protections&# investors will build in. Those protections usually are as follows: Multiple liquidation preferences : It is standard for investors to have a 1x preference. With a multiple preference, investors can take 1.5, 53% of deals had participating prefs. So, frothy times aside, the right deal is about more than the share price today.