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Anatomy of a Term Sheet: Right to Maintain Proportionate Ownership (a/k/a Preemptive Rights)

VC Ready Blog

As a preliminary matter, note that the “Right to Maintain Proportionate Ownership” is more commonly referred to as “Preemptive Rights” or the “Right of First Offer.” Note that limiting the scope of the Preemptive Rights is considerably less important where the investors are subject to a Pay-to-Pay.

Anatomy of a Term Sheet: Index

VC Ready Blog

5. Voting Rights and Protective Provisions. 8. Redemption Rights. 10. Registration Rights. 11. Management Rights and Investor Director Approval. 12. Right to Maintain Proportionate Ownership (a/k/a Preemptive Rights). 14. Right of First Refusal, Right of Co-Sale and Lock-up.

Does Crowdfunding Work for Early Stage Growth Companies?

VC Deal Lawyer

Investors get no rights in the end product. You Want to Avoid Giving Non-Accredited Investors Preemptive Rights. based. Thanks.

Anatomy of a Term Sheet: Pay-to-Play

VC Ready Blog

NOTE: This is the seventh post in our series about standard terms in early stage equity financings. These posts refer to the model Series A Term Sheet put out by the National Venture Capital Association (NVCA) and available for download here. * * * * * * * * * *. Smaller investors, by contrast, are most likely to object to a Pay-to-Play.

Anatomy of a Term Sheet: Right of First Refusal, Right of Co-Sale and Lock-Up

VC Ready Blog

While the Investor Rights Agreement deals with the rights of the investors vis-à-vis the company, the Right of First Refusal and Co-Sale Agreement gives the company and the investors certain rights vis-à-vis the company’s common stockholders. Right of First Refusal. Right of Co-Sale. Lock-Up.