Both Sides of the Table
JULY 25, 2011
But know that every term in your term sheet is there as a result of some dispute of the past between shareholders or between shareholders & management. 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.
The Equity Kicker
NOVEMBER 9, 2016
Liquidation preferences are a useful tool because they exploit a difference in the way investors and management see the future. Generally speaking management teams have more confidence in their success than investors do. These differences create the space for win-win solutions and without them negotiations are a zero sum game.
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Berkonomics
JANUARY 6, 2022
Most sophisticated investors will take either a promissory note or preferred stock, both of which come before founder or management stock in a sale or liquidation. One tool often used: the “cutout” for management. That further reduces the amount available to founders if not still in the ranks of management.
ithacaVC
NOVEMBER 18, 2011
In my earlier post on management carve out plans (see it here ), I gave a detailed description of what these plans are and why boards of VC-backed companies often use them. get both the carve out amount and the equity value; I guess double dipping is only for VCs that have participating preferred stock ).
ithacaVC
APRIL 25, 2014
The model includes a simple waterfall analysis using both participating and non-participating preferred (see line 44 and then columns M and O). The larger the preferred stock liquidation preference the larger the impact of participating preferred. Dealing with VCs Management Startup Life'
Early Growth Financial Services
FEBRUARY 3, 2015
Today, we’re tackling participating versus non-participating preferred stock, a fundamental economic term in VC deals that goes to the heart of the business agreement between investors and management in connection with a sale of the company. management). management).
ConversionXL
MARCH 19, 2012
These learned preferences can just as easily involve characteristics that, from an objective standpoint, do not make a product any better and might even make them worse — particularly when it relates to texture. Overwhelmingly, both halves of participants preferred the nice plump chicken, but their reasoning was different.
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