Demand Finance Founder Liquidation Preference 
Startup Company Lawyer
MARCH 14, 2010
After the recent announcement of the Series Seed Financing documents by Marc Andreesen, Brad Feld points out that there are now four sets of “open source&# equity seed financing documents: TechStars Model Seed Funding Documents (by Cooley). Y Combinator Series AA Equity Financing Documents (by WSGR). under $500K).
The Equity Kicker
DECEMBER 30, 2013
Nassim Taleb is one of the most visionary thinkers in modern finance. If after a $5m Series A a founder holds 30% of her company and then goes on to raise a $20m Series B at $60m pre-money her stake will drop to 22.5% Locking into arrangements that demand a high exit is a form of rigid business plan.
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Both Sides of the Table
SEPTEMBER 5, 2012
To better understand the arguments for / against convertible equity I suggest you read my posts on those topics: Is convertible debt preferable to equity? Was Paul Graham right in his “high resolution” financing post? Convertible debt WITH a cap is stupid for founders. Some thoughts on raising angel money.
Tim Keane
JANUARY 12, 2010
For angel groups, the distinction between groups and VCs on this issue is dwindling, especially as angel groups do bigger rounds of financing. Note that this applies only to earl stage Series A-type equity financings and assumes no cash dividends are paid to investors. Second a liquidation preference and a participation.
K9 Ventures
NOVEMBER 21, 2011
Let’s say you’re the founder (I use a solo-founder in my example to keep things simple, but this could just as well apply to a founding team) of a startup called Blood, Sweat and Tears, Inc. The objective is really to be able to get some risk off the table for the founders and not leave all their eggs in one basket.
K9 Ventures
NOVEMBER 21, 2011
Let’s say you’re the founder (I use a solo-founder in my example to keep things simple, but this could just as well apply to a founding team) of a startup called Blood, Sweat and Tears, Inc. The objective is really to be able to get some risk off the table for the founders and not leave all their eggs in one basket.
Feld Thoughts
JUNE 2, 2015
Or, if you just want the paragraph, it’s: “If this note converts at a price higher than the cap that you have been given you agree that in the conversion of the note into equity you agree to allow your stock to be converted such that you will receive no more than a 1x non-participating liquidation preference plus any agreed interest.”.
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