Agile VC

APRIL 17, 2011

AGILEVC My idle thoughts on tech startups. liquidation preference, 6% accumulated dividend (1). Series A-1 Preferred. liquidation preference, 6% accumulated dividend. Series B Preferred. liquidation preference, 6% accumulated dividend (1). Series B-1 Preferred. Series D Preferred.

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

The Startup Lawyer

JANUARY 22, 2013

Depending on the delta between the price cap and the pre-money valuation of the qualified equity financing, the convertible note investors could receive a windfall in terms of liquidation preference. The Potential Problem Let’s say Series A investors invest at a pre-money valuation that [.].

Liquidation Preference 54

Liquidation Preference Pre-Money Valuation Valuation Equity 54

Both Sides of the Table

JANUARY 21, 2010

If you’re a startup and you don’t have a close relationship with a few law firms you’re really missing one of the most important relationships that any entrepreneur can have. I write about some of the lessons in my post on Startup Mistakes. Every town has firms that focus on startups – find them.

Southern California 318

Southern California Silicon Valley IP Stock Options 318

ithacaVC

DECEMBER 14, 2011

Continuing with the “No Mess” theme of commenting on things that give VCs pause, I thought it would be good to touch on liquidation preference. Specifically, “too much” liquidation preference (I will use “LP” for liquidation preference). Ok, enough of the background.

Liquidation Preference 49

Liquidation Preference LP Preferred Stock Liquidity Event 49

Both Sides of the Table

FEBRUARY 23, 2015

But not everybody has the right skills to build a highly successful and valuable startup from scratch. For some aspiring to be tech entrepreneurs, I often suggest a two-step process, as I argued in this post that “ The First Startup Founder You Need to Invest in Is You.” In fact, I would argue that most people don’t.

Technical Review 150

Technical Review Liquidation Preference Silicon Valley IP 150

Steve Blank

MARCH 16, 2016

There are many reasons to found a startup. There are many reasons to work at a startup. To most founders a startup is not a job, but a calling. But startups require money upfront for product development and later to scale. Traditional lenders (banks) think that startups are too risky for a traditional bank loan.

Liquidity Event 120

Liquidity Event Founder Liquidation Preference Venture Capital 120

Both Sides of the Table

FEBRUARY 15, 2016

There is much talk these days that startup valuations have decreased and may continue to do so and that the amount of time it takes to fund raise may take longer. Even if you sold for $20 million they’d be thinking “I have senior liquidation preference so I get my money back.”).

Burn Rate 150

Burn Rate Cap Table Valuation Software Review 150

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.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Both Sides of the Table

SEPTEMBER 16, 2010

I know some people think the whole market has been disrupted and startups and funding work differently these days. Deep pockets – In the previous posts I’ve compared tech startup investing with poker taking analogies of The Big Short & Delivering Happiness. Tags: Startup Advice Tech Market Analysis VC Industry.

Cap Table 283

Cap Table Angel Investor Liquidation Preference Deal Flow 283

Both Sides of the Table

MAY 30, 2015

When you do a convertible note with a cap that converts into the next round of funding one of the unintended consequences is that if you’re successful and raise at a larger price than your cap the early angels often get “multiple liquidation preferences” on their dollars in.

Liquidation Preference 150

Liquidation Preference Ratchet Angel Investor Entrepreneur 150

Startup Professionals Musings

JULY 3, 2014

As an Angel investor to startups, I’m still surprised to find entrepreneurs who expect investors to give them money, and then disappear into the sunset. In any case, your startup is now part of some investor’s portfolio, so you need to treat the situation like reporting to a new boss, and not like a new freedom.

Term Sheet 237

Term Sheet Advisory Board Liquidation Preference Startup 237

Both Sides of the Table

SEPTEMBER 5, 2012

Because convertible debt deals often have both a ‘full ratchet’ and often have ‘multiple liquidation preferences’ “ Yup. When convertible debt first started being introduced as a “faster, cheaper way to get startups funded” they didn’t have pricing built into them.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

Both Sides of the Table

JULY 25, 2011

When I first started as a startup CEO in 1999 there were no guides on raising venture capital. 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. Every startup needs the knowledge in this book.

Liquidation Preference 304

Liquidation Preference Term Sheet Cap Table Participating Preferred 304

A Smart Bear: Startups and Marketing for Geeks

SEPTEMBER 8, 2010

It's nice to highlight awesome articles about startup that I didn't write! Startup Business Checklist 2010 [link]. Startup Business Checklist 2010 : Steve Smith's Blog. Below is my current checklist for startup businesses in 2010. How To Land a Killer Job At a Tech Startup Out of College - [link]. interintelli.

Liquidation Preference 216

Liquidation Preference Silicon Valley Startup Software 216

Both Sides of the Table

MARCH 1, 2016

While there is much discussion about VCs starting to pull back on their investments into startups, the LPs we surveyed don’t expect to slow the pace of investment into VC funds themselves – at least for the foreseeable future. That’s money that fuels our startup ecosystems.

Venture Capital 150

Venture Capital LP Silicon Valley Marketing 150

The Equity Kicker

OCTOBER 22, 2012

Focusing too much on the big vision and too little on the plan is an increasingly common mistake at startups. Betting too early on a billion dollar outcome and building up a big liquidation preference can turn what would otherwise have been a decent success into a failure. Without a credible plan to get there it’s just talk.

Liquidation Preference 134

Liquidation Preference Distribution Web Conversion 134

Both Sides of the Table

MAY 13, 2013

For the past 5 years or so Google, Facebook and a handful of tech industry giants have been quietly buying scores of early-stage startups for their talent. I’m supposed to believe that my best innovation can only come from scores of startup founders who just made millions and have now become CVOs at my company? Go do a startup.

Liquidation Preference 357

Liquidation Preference Early Stage Retention Lock-up Period 357

Both Sides of the Table

SEPTEMBER 28, 2013

So as a startup CEO you constantly have to suspend disbelief. ” A startup CEO’s job is to absorb stress so the team doesn’t have to. Startups have to be optimists because no rational person would actually believe you could build Uber into the amazing company that it is today. We just need your $500,000!!”

Startup 417

Startup Dilution San Diego Stock Options 417

ReadWriteStart

SEPTEMBER 2, 2011

While certainly not every business needs to raise venture financing, it is the path for many high-growth technology startups. As Steve Blank explained earlier this week on ReadWriteStart from research at The Startup Genome Project : One of the biggest surprises is that success isn't about size of team or funding.

Cap Table 125

Cap Table Term Sheet Liquidation Preference Technical Review 125

Tim Keane

JANUARY 12, 2010

Startups and angels: Along the way to success.   At the financial level , and assuming a harvest of the investment in the company without the need for further financing, two terms stand out as driving economics: the dividend and the liquidation preference. Second a liquidation preference and a participation.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Startup Professionals Musings

SEPTEMBER 26, 2015

Perhaps they're way off in their valuation (usually far too high), or paralyzed by fear at seeing the other terms, because they have no idea what's normal, and what's worth a fight to the death (their startup's). In very early startups, which have no valuation, the term sheet may specify a convertible note.

Term Sheet 120

Term Sheet Demand Preferred Stock Liquidation Preference 120

Altgate

DECEMBER 18, 2008

@altgate Startups, Venture Capital & Everything In Between Skip to content Home Furqan Nazeeri (fn@altgate.com) ← Holiday Cards Year End Management Changes → The 3X Liquidation Preference Is Back! Let’s recap how expensive a 3x liquidation preference really is. Bookmark the permalink.

Liquidation Preference 31

Liquidation Preference Venture Capital Post-Money Valuation Participating Preferred 31

Both Sides of the Table

APRIL 14, 2010

That means that the likely have a minimum of $15 million in liquidation preferences. It will usually be higher because the liquidation preference has a dividend so if the deal is long in the tooth assume that the liquidation preference might be $20-22 million. Take liquidation preferences head on.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Dividend 289

Startup Professionals Musings

FEBRUARY 3, 2018

As an angel investor to startups, I’m still surprised to find entrepreneurs who expect investors to give them money, and assume no strings attached. In any case, your startup is now part of some investor’s portfolio, so you need to treat the situation like reporting to a new boss, and not like a new freedom.

Term Sheet 140

Term Sheet Advisory Board Liquidation Preference Portfolio 140

Altgate

DECEMBER 15, 2010

@altgate Startups, Venture Capital & Everything In Between Skip to content Home Furqan Nazeeri (fn@altgate.com) ← No one wants to tell you your baby is ugly More on Liquidation Preferences → Pre-Money Valuation vs Number of Founders Posted on December 15, 2010 by admin Here’s a chart of the day worth sharing.

Pre-Money Valuation 66

Pre-Money Valuation Valuation Cofounder Founder 66

Feld Thoughts

FEBRUARY 9, 2016

Mark Suster wrote a great post yesterday titled The Resetting of the Startup Industry. I’ve seen every imaginable type of liquidation preference structure, pay-to-play dynamic, preferred return, ratchet, share/option bonus, option repricing, and carveout. Go read it now – I’ll wait.

Cap Table 70

Cap Table Down Round Liquidation Preference Founder 70

Gust

APRIL 16, 2014

Invested Interests business entrepreneur investor contract startup' But something like that would be way, way outside the norm. original post can be found on Quora @ [link] *.

Liquidation Preference 152

Liquidation Preference Revenue Entrepreneur Startup 152

Gust

NOVEMBER 15, 2012

In my own portfolio I have companies that are generally perceived to be extremely successful with high profile customers and lots of sales…but they just happen to have a liquidation preference ladder of $25 million!

Seed Stage 131

Seed Stage Hockey Stick Cap Table Liquidation Preference 131

The Equity Kicker

JUNE 28, 2013

Otherwise the investors won’t make the multiple on their investment that they want and after liquidation preferences are paid the amount left for the entrepreneur may well also be disappointing. Company exits for £20m having raised £15m for 50% of the company in a 1x liquidation preference – the investor gets £17.5m

Liquidation Preference 116

Liquidation Preference Valuation Portfolio Operations 116

Feld Thoughts

MAY 7, 2012

Down: Liquidation preference. In reality it mainly gives one the ability to know what’s actually going on, to the extent that anyone knows what’s actually going on in a fast moving startup. Up: Pro-rata rights. When things don’t go well (down), a VC wants to get their money out first.

Liquidation Preference 143

Liquidation Preference Term Sheet Search Entrepreneur 143

Startup Company Lawyer

MARCH 14, 2010

In addition, I think that a “peace treaty&# between early-stage investors and startup companies on standard terms (at least at a term sheet level) is a step in the right direction. The primary rights in these documents, ranked in order of importance in my opinion are: Non-participating preferred liquidation preference.

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

Up and Running

AUGUST 17, 2015

As I read stories of college dropouts who had successfully sold tech companies, or entrepreneurs with innovative ideas who made it big on Shark Tank, it became clear that there was no set path to startup success. C Corp versus LLC, non-competes, liquidation preferences, preferred versus common stock, and so on).

Entrepreneur 60

Entrepreneur Cofounder Angel Investor eCommerce 60

The Startup Lawyer

JUNE 9, 2010

A startup’s Series A financing shouldn’t be a large liquidity event or salary payday for the startup’s founders. While a startup typically receives millions of dollars in a Series A, if too much of that $$$ flows guaranteed to the founders, various incentives get out of whack. Case Study.

Salary 99

Salary Term Sheet Liquidation Preference Liquidity Event 99

Startup Professionals Musings

AUGUST 16, 2015

As an angel investor to startups, I’m still surprised to find entrepreneurs who expect investors to give them money, and assume no strings attached. In any case, your startup is now part of some investor’s portfolio, so you need to treat the situation like reporting to a new boss, and not like a new freedom.

Term Sheet 120

Term Sheet Advisory Board Liquidation Preference Angel Investor 120

The Startup Lawyer

MARCH 3, 2014

If you want to discuss liquidation preferences, vesting schedules, or anything startup-related, I’ll be holding an office hour session this Friday March 7th from 130-230pm at UP Global’s SXSW Startup Oasis. Startup Lawyer'

Liquidation Preference 65

Liquidation Preference Vesting Global Startup 65

Feld Thoughts

SEPTEMBER 9, 2015

Some will demonstrate strategically justifiable metrics and have fantastic ‘up round’ exits; others may see liquidation preferences kick in which will negatively impact founders and employees; others may fulfill the adage “IPO is the new down round” , which has been the case for more than half of the public companies on our list.

Liquidation Preference 70

Liquidation Preference Burn Rate Balance Sheet .Net 70

Scott Edward Walker

DECEMBER 29, 2011

Moreover, I’m publishing an eBook with Hyperink entitled The Startup Law Playbook , which should be available shortly. Legal Checklist for Startups 2. How To Hire A Superstar Engineer For Your Startup 5. How To Launch A Startup And Avoid Ending-Up In Jail 6. What Is A Liquidation Preference?

Antidilution 66

Antidilution Liquidation Preference Term Sheet New York City 66