VC Cafe
OCTOBER 31, 2022
TVPI = total value to paid in capital (paper gains) DPI = distributed to paid-in capital (real cash gains, paid out). Liquidation preferences – in addition to lower valuations, investors are looking for protective provisions. That means that in these down rounds, some investors are asking to 2-5x liquidation preferences.
Both Sides of the Table
JULY 22, 2010
Things like “ participating preferred stock &# in legalese unsurprisingly never actually call out, “hey, this is the participating preferred language.&# We got a3x participating liquidation preference with interest (not participating with a 3x cap, but 3x participating. 4 * $4 million) and not $4 million.
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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. The liquidation preference would not apply in this situation, and any distribution to stockholders would trigger the dividend preference. Dividend preference.
Tim Keane
JANUARY 12, 2010
. At the financial level , and assuming a harvest of the investment in the company without the need for further financing, two terms stand out as driving economics: the dividend and the liquidation preference. Second a liquidation preference and a participation. First , dividends.
abovethecrowd.com
APRIL 20, 2016
If you really want to liberate your own common shares and those of your employees, then you want to convert the preferred to common and remove both the control and the liquidation preference over your shares. Cash distributions are what matter at the end of the day, bug big paper gains still make for good fundraising pitches.
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