Both Sides of the Table

JANUARY 21, 2010

I know he’s smart but you wouldn’t hire a Javascript developer to do your database design – would you? You need to know how liquidations preferences work. But I don’t have money to pay a fancy lawyer – I’ll just have my cousin do it - Don’t. Here’s a hack for you.

Southern California 318

Southern California Silicon Valley IP Stock Options 318

Scott Edward Walker

DECEMBER 29, 2011

How To Hire A Superstar Engineer For Your Startup 5. What Is A Liquidation Preference? House Passes Crowdfunding Bill: FAQ’s For Entrepreneurs 3. What’s It Like Working At A Major New York City Law Firm? How To Launch A Startup And Avoid Ending-Up In Jail 6. 3 Ways For Startups To Cut Their Legal Fees In Half 7.

Antidilution 66

Antidilution Liquidation Preference Term Sheet New York City 66

Up and Running

AUGUST 17, 2015

C Corp versus LLC, non-competes, liquidation preferences, preferred versus common stock, and so on). While there is a wealth of information available online, it’s all a lot more tangible when you have case law and real life anecdotes attached to these considerations.

Entrepreneur 60

Entrepreneur Cofounder Angel Investor eCommerce 60

Altgate

OCTOBER 8, 2009

Raising Capital: 5 Reasons Convertible Debt Sucks HOT The Collapse of the VC Ecosystem & What It Will Look Like Post Recovery 10 Tips On Negotiating With VCs Dating…er…Fundraising Etiquette The Science & Art of Term Sheet Negotiation HOT How Liquidation Preferences Work HOT How Much Money Should I Raise?

Term Sheet 39

Term Sheet Technical Review Michigan Liquidation Preference 39

Up and Running

MAY 21, 2015

They generally also get additional rights that common shareholders don’t get, such as anti-dilution protection, and liquidation preference (discussed further below). Liquidation preference. Whether that’s true or not depends in no small part on how the liquidation preference clause was negotiated with outside investors.

Covenant 60

Covenant Liquidation Preference Ratchet Dilution 60

techcrunch.com

FEBRUARY 25, 2010

This is probably why investors’ case for a company to sell early f ocuses exclusively on the founder : in most early-stage acquisitions, the liquidation preferences and deal-sweeteners only work for investors and founders. Why aren’t we surprised when three months later that company can’t hire enough engineers?

Liquidation Preference 63

Liquidation Preference Founder Option Pool Acquisition 63

genylabs.typepad.com

SEPTEMBER 24, 2011

where your stock sits in the liquidity preference stack. what rights and preferences the founders and the other investors have. Have not met anyone I wanted to hire who was willing to work for equity. Should You Hire People With Graduate Degrees for Your Startup? what kind of stock you are getting. Good point.

Equity 40

Equity Technical Review San Jose Stock 40

Up and Running

DECEMBER 30, 2015

I made the rookie mistake of not hiring an attorney when raising our first round. Founders should pay attention to the liquidation preference in the term sheet to ensure it does not become detrimental to them in a less than favorable exit. .”… Click To Tweet. Not having legal counsel.

Due Diligence 84

Due Diligence Valuation Liquidation Preference Redemption 84

ithacaVC

DECEMBER 13, 2013

The option plan shares available for future issuance typically represent the number of additional options needed for hiring planned up to the point of the NEXT financing (as in we are doing a Series A round now, how many options do we need prior to doing a Series B round). Often times a plug is used around 10%.

Cap Table 67

Cap Table Pre-Money Valuation Option Pool Liquidation Preference 67

Both Sides of the Table

SEPTEMBER 28, 2013

The don’t understand VC liquidation preferences or multiple return expectations. There are times when you need to “hire above” somebody not rising to the expectations you’d have of their role. You take the meeting but you’re not really pursuing it. They see the dollar signs and the victory.

Startup 417

Startup Dilution San Diego Stock Options 417

Both Sides of the Table

JULY 19, 2011

On balance I usually prefer to recruit people from my network both in terms of saving costs as well as hiring people I know & trust. One tip – depending on seniority – you can sometimes hire independent reference check firms. It can get expensive so you’d probably only do it for a very senior hire.

Term Sheet 319

Term Sheet PR Liquidation Preference Stock Options 319

K9 Ventures

JUNE 5, 2015

In addition, the competition for and the cost of hiring people, especially in the San Francisco Bay Area, has gone up dramatically. The thinking is that since these companies will always be valued higher than the liquidation preference of the investment, therefore there is downside protection, and so they’re only playing for the upside.

Seed Stage 48

Seed Stage Venture Capital Early Stage Valuation 48

Scott Edward Walker

DECEMBER 13, 2018

We have also recently handled a few “acquihires” (or “acqui-hires”) — which is a somewhat unique transaction, with a host of unusual issues. We had a busy 2018, including closing several significant M&A transactions and financings.

Founder 45

Founder Merger IP Liquidation Preference 45

Growthink Blog

MAY 23, 2011

And they hire very aggressive securities attorneys to represent their interests. This combo all too often leads to various forms of deal unpleasantness, like cram-down rounds, liquidation preferences, and change of control provisions, which in turn, often lead to unhappy founders and angel investors even in somewhat successful exits.

Angel Investor 112

Angel Investor Venture Capital Sweat Equity Cram Down 112

Spencer Fry

APRIL 17, 2017

Without raising money, 1 of 2 situations would have fallen upon us: I would have had to dig deeper into my own pockets to continue to pay the contractor as well as hire others. As a bootstrapper, you have nobody above you on the cap table (note: investors sit above you in their liquidation preference), so it’s your way or the highway.

Bootstrapping 63

Bootstrapping Cap Table Liquidation Preference Cofounder 63

Venture Chronicles

AUGUST 23, 2013

To recap, here is the series thus far: 1) Hiring 2) Dynamic Org Structures 3) Product First 4) Marketing. Preferred shareholders are inherently conflicted in this regard because they enjoy advantages such as liquidation preferences and anti-dilution protections that give them a built-in advantage over the common class of stock.

Management 66

Management Startup Liquidation Preference Dilution 66

Pascal's View

DECEMBER 30, 2012

They can make up for this by attracting complementary cofounders or by hiring talented nonfounders. Many of these issues come to the foreground once entrepreneurs have raised money from VC’s.

Cofounder 34

Cofounder Liquidation Preference Vesting Equity 34

www.mattbartus.com

DECEMBER 9, 2012

I've just seen many startups unhealthily focus on the valuation versus things such as the liquidation preference or board control. I've just seen many startups unhealthily focus on the valuation versus things such as the liquidation preference or board control. Matt Bartus. Matt Bartus. I have had several clien.

Warrant 40

Warrant Valuation Pre-Money Valuation Term Sheet 40

Altgate

MARCH 17, 2009

Raising Capital: 5 Reasons Convertible Debt Sucks HOT The Collapse of the VC Ecosystem & What It Will Look Like Post Recovery NEW 10 Tips On Negotiating With VCs NEW Dating…er…Fundraising Etiquette The Science & Art of Term Sheet Negotiation HOT How Liquidation Preferences Work HOT How Much Money Should I Raise?

Term Sheet 28

Term Sheet Due Diligence Liquidation Preference Dividend 28

thestartuplawyer.com

FEBRUARY 24, 2010

Who must be a co founder and who can remain a hired principal? When I find, and hire on options, the three perfect CEs/directors must I consider them co founders and treat them accordingly? Who must be a co founder and who can remain a hired principal? He obviously never launched a startup and got shafted by a co-founder.

Cofounder 40

Cofounder Founder Preferred Stock Startup 40

abovethecrowd.com

APRIL 20, 2016

Also, they have a strong belief that any sign of weakness (such as a down round) will have a catastrophic impact on their culture, hiring process, and ability to retain employees. As a result, most of their interests are aligned with the common, and key decisions about return and liquidity are the same as for the founder.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Austin Startup

APRIL 1, 2017

They’ll focus on high-level issues like valuation, liquidation preference, and board composition (# of seats), and then prematurely check out once a term sheet is signed. And, broadly speaking, that is correct. But the devil is in the details, and too many teams overlook extremely important details. Yes, this happens.

Term Sheet 48

Term Sheet Institutional Investors Technical Review Lead Investor 48

Up and Running

MARCH 29, 2017

I hired an employee who had B2B SaaS marketing experience, and he worked on getting users while I worked on building new features that would convince them to stick around. Small business owners are notorious for being fickle about the software that they use and even if you can get a user to stick around, they still might go out of business.

Term Sheet 60

Term Sheet Venture Capital Liquidation Preference Valuation 60