Both Sides of the Table
JULY 22, 2010
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.
Both Sides of the Table
JULY 25, 2011
tl;dr version: If you’re an entrepreneur or VC or will be working in this industry - buy this. To this day I’m still surprised how few CEOs really understand the differences between 2x liquidation preference and a liquidation preference with a 2x cap. This article originally ran on TechCrunch. Drag along rights?
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Feld Thoughts
JUNE 10, 2022
So, as an entrepreneur, I encourage you to deal with reality. Rather, when you have a choice between a financing at a lower valuation and a financing with all kinds of crazy structure to try to maintain a previous valuation, negotiate the best price you can but do a clean financing with no structure. and a bunch of other things.
Lightspeed Venture Partners
OCTOBER 7, 2012
Week three’s breakdown covered topics like how hard momentum is to turn around, and how participating preferred stock works. This does neither, so I’m out” Cuban said, “I see you guys not as entrepreneurs but as wantrepreneurs” I agree with him. The entrepreneur was clearly desperate.
Berkonomics
JANUARY 6, 2022
First, the marginal exit event: Sometimes the end game or sale of the company is not a happy event for the early investors, including the entrepreneur or the founders. Here’s an example that will make your heart skip a beat.
Lightspeed Venture Partners
OCTOBER 1, 2012
Price is always a consideration in investing, but particularly so if the entrepreneurs have shown an interest in an early exit. The entrepreneur was seeking $100k for 20% of the company. Barbara noted that the entrepreneur had been unlucky, and that luck doesn’t change, which is why he should sell the company to them.
Scott Edward Walker
JUNE 9, 2019
I liken it to participating preferred — which founders also do not typically understand until it is too late. This is a huge red flag and founders should push back very hard. In short, super pro rata rights are another example of investors trying to take advantage of inexperienced founders.
Expert insights. Personalized for you.
405 
Let's personalize your content