article thumbnail

Want to Know How VC’s Calculate Valuation Differently from Founders?

Both Sides of the Table

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.

Valuation 405
article thumbnail

Shark Tank Season 4 week 4 breakdown

Lightspeed Venture Partners

Week three’s breakdown covered topics like how hard momentum is to turn around, and how participating preferred stock works. He had been at it for 6 months and had no sales or distribution lined up yet. I’ve been writing up reviews of this season’s Shark Tank pitches from a silicon valley VCs perspective.

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

How do the sample Series Seed financing documents differ from typical Series A financing documents?

Startup Company Lawyer

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. Limited protective provisions.

Finance 70
article thumbnail

No Mess (Too Much Liquidation Preference)

ithacaVC

Sometimes, after getting back the LP, the preferred holder then converts to common and gets its prorata share of proceeds left after all LP has been paid (this is called participating preferred). million balance to distribute to all shareholders prorata. 10 million) to Series B LP. ($4 4 million) to Series C LP.

article thumbnail

What is an employee retention or M&A carveout plan?

Startup Company Lawyer

Due to aggregate liquidation preferences that may exceed the acquisition price in an M&A deal, common stock may be rendered worthless. If you can’t figure this out yourself, you should probably build a liquidation preference spreadsheet to model how liquidation preferences work depending on M&A transaction value.

article thumbnail

How to Divide Equity to Startup Founders, Advisors, and Employees

thinkspace.com

The part that I’d like to zero in on is when you’ve got a high growth company what are some of the best practices out there to distribute equity to the founders, advisors, and employees? The one thing that I think is missing is distributing equity to every single employee in the company regardless of title. Title Range (%).

Equity 62
article thumbnail

Ecommerce UX Mastery: Beginner to Pro in a Blog Post

ConversionXL

Investing in user experience instead of further ad spend, promotion, or distribution. In addition, the same study found that 100% of participants preferred sites with sticky navigation bars, despite usually not knowing why (that’s all of the participants – crazy). Why Care About Ecommerce UX?

eCommerce 100