The Equity Kicker

DECEMBER 30, 2013

Optionality is the property of asymmetric upside (preferably unlimited) with correspondingly limited downside (preferably tiny).” Venture capital, when practiced properly by a top tier firm, is a classic example of a business that benefits from optionality. He explains why in his first bullet: 1.

Finance 129

Finance Liquidation Preference Valuation Harvest 129

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.”.

Liquidation Preference 70

Liquidation Preference Cap Table Angel Investor Post-Money Valuation 70

The Startup Lawyer

JUNE 9, 2010

The term sheet was pretty much a done deal, when the startup’s CEO demanded a salary of $25,000. The startup community focuses most of the term sheet discussion on liquidation preferences and anti-dilution , but startup CEO salary is nonetheless an important issue. The Importance of Startup CEO Salary.

Salary 99

Salary Term Sheet Liquidation Preference Liquidity Event 99

abovethecrowd.com

APRIL 20, 2016

In Silicon Valley boardrooms, where “growth at all costs” had been the mantra for many years, people began to imagine a world where the cost of capital could rise dramatically, and profits could come back in vogue. In 1999, record valuations coexisted with record IPOs and shareholder liquidity. Competition also has access to capital.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Up and Running

MARCH 29, 2017

See Also: What Do Venture Capital Firms Want? I was looking for wisdom to help make the decision, and found a gem in a lecture from my venture capital professor at HBS. See Also: Demand Validation: How to Find Out If Customers Want to Buy Your Product. See Also: 17 Venture Capital Blogs You Should Be Reading.

Term Sheet 60

Term Sheet Venture Capital Liquidation Preference Valuation 60

ithacaVC

MAY 1, 2013

I read an article this morning in DealBook titled “ In Venture Capital Deals, Not Every Founder Will be a Zuckerberg “ Go ahead and give it a read. The article states “When venture capitalists invest, they typically demand preferred shares that accrue a yearly dividend of about 8 percent.

Dividend 45

Dividend Liquidation Preference Common Stock Venture Capital 45

Both Sides of the Table

FEBRUARY 14, 2016

The Laws of Supply & Demand. The most basic chart of microeconomics is a supply & demand curve. Demand represents a buyer and supply a seller. Some products are “inelastic” meaning when prices go up demand doesn’t fall much (think cigarettes, alcohol or even illicit drugs). goes into a startup.

Valuation 150

Valuation Down Round Startup Later Stage 150

Spencer Fry

APRIL 17, 2017

Having started and sold 3 successful bootstrapped businesses, and am now running 1 venture capital backed business ( Coach ), this is a topic I know a thing or two about. What I worry about is the demand on every one of your potential customer’s attention and time. Competition is everywhere. Nobody can tell you what to do.

Bootstrapping 63

Bootstrapping Cap Table Liquidation Preference Cofounder 63

abovethecrowd.com

MAY 20, 2013

Private companies typically have capitalization structures that are very complex. There are common stock, common options, and as many as three to five different layers of preferred stock, each with a specific liquidation preference. The only way around this is to reverse your way of thinking.

Merger 53

Merger Institutional Investors Liquidation Preference Preferred Stock 53

SoCal CTO

JULY 13, 2010

10 Ways To Be Your Own Boss - A VC : Venture Capital and Technology , June 18, 2010 The folks at Behance and Cool Hunting asked me to talk at their 99% Conference a couple months ago. liquidation preference. Here are the top 30 along with a brief snippet from the post. Yes, even bootstrappers. And then I took a stand.

Cofounder 175

Cofounder Technical Cofounder Term Sheet Startup 175

Professor VC

JULY 25, 2013

Mike Markkula presenting Steve Jobs with first investment in Apple I recently watched an excellent documentary on PBS, Something Ventured: Risk, Reward, and the Original Venture Capitalists. Their response was that we should be happy they didn''t ask for a participating preference on top of the seniority.

Term Sheet 46

Term Sheet Silicon Valley Syndicate Syndication 46