Both Sides of the Table
SEPTEMBER 18, 2014
At an accelerator … Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago. Your A round?
David Teten
JANUARY 13, 2015
Yes, you like hip-hop, “urban” clothing and “ ratchet television”, but all that sinks you deeper into stereotypes. For early-stage founders, I suggest AngelList and Crunchbase. For later-stage companies, I suggest the Association for Corporate Growth online community, Axial , and Preqin. Prove more through metrics.
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Gust
SEPTEMBER 17, 2014
Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago. There were no metrics. Him: On metrics. Your A round?
Tim Keane
JANUARY 12, 2010
A cumulative dividend can get to be very expensive and is not often a feature in early stage terms. A full ratchet anti-dilution clause is very unfriendly to entrepreneurs; it requires them to make up the entire difference in price from their own holdings. 2] (I don’t like EBITDA multiples very much.
abovethecrowd.com
APRIL 20, 2016
Anything that hints of a down round brings questions about the success metrics that have already been “booked.” Examples of dirty terms include guaranteed IPO returns, ratchets, PIK Dividends, series-based M&A vetoes, and superior preferences or liquidity rights. The typical Silicon Valley term sheet does not include such terms.
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