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. Me: I know.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

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. At an accelerator …. Him: Not so good. Obviously he’d be pissed off.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

Tim Keane

JANUARY 12, 2010

Especially in situations where the founders have a large position and are key employees, it is not uncommon for investors to request that they agree to have some portion of their holdings vest on a schedule. Other major term-sheet provisions, in addition to these economic considerations, also focus on reducing investor risk.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68