Agile VC

APRIL 17, 2011

How They Do It: Aggregate data from travel data warehouses like ITA as well as indexing travel providers websites, provide this information to consumers in a highly customizable search engine. liquidation preference, 6% accumulated dividend (1). Series A-1 Preferred. liquidation preference, 6% accumulated dividend.

Pre-Money Valuation 113

Pre-Money Valuation Liquidation Preference Dividend Common Stock 113

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

The Equity Kicker

AUGUST 1, 2012

between them, making the aggregate exit value of these acqui-hires 4.2x, which tells us that if the investors on average had a 24% stake they would have broken even on these deals. Lightbox and Karma had raised money $5.7m

San Francisco 110

San Francisco Hiring Liquidation Preference Aggregator 110

Startup Company Lawyer

JANUARY 9, 2011

Tweaking convertible debt so that common stock (instead of preferred stock) is issued for the conversion discount in order to limit liquidation preference overhang. Convertible debt with a price cap preserves the investor’s “equity&# ownership, but gives the investor extra liquidation preference.

Liquidation Preference 57

Liquidation Preference Finance Preferred Stock Common Stock 57

ithacaVC

FEBRUARY 23, 2011

As the investors’ aggregate liquidation preference (ALP) increases typically the need for a MCOP also increases. The ALP is the total amount of $ that preferred stock holders are owed on a sale of the company under their liquidation preferences. A few key points to consider: 1.

Liquidation Preference 55

Liquidation Preference Management Preferred Stock Dividend 55

abovethecrowd.com

APRIL 20, 2016

Many have noted that the aggregate shareholder value created by all of the Unicorns will vastly overshadow the losses from the inevitable failed unicorns. This is because these companies have raised so much capital that the early investor is no longer a substantial portion of the voting rights or the liquidation preference stack.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

ithacaVC

SEPTEMBER 20, 2011

That means, assuming a 1X liquidation preference, that the common stock should be worth zero NOW simply based on the fact that the aggregate liquidation preference exceeds the M&A revenue multiples. Furthermore, it is in an industry where M&A transactions typically happen in the 3-4X revenue range.

Liquidation Preference 49

Liquidation Preference Common Stock Stock Options Valuation 49