ithacaVC

DECEMBER 14, 2011

Sometimes, after getting back the LP, the preferred holder then converts to common and gets its prorata share of proceeds left after all LP has been paid (this is called participating preferred). So, after the Series B round the company would have $13mm of aggregate liquidation preference ($3mm plus 2*$5mm).

Liquidation Preference 49

Liquidation Preference LP Preferred Stock Liquidity Event 49

Scott Edward Walker

JUNE 9, 2019

Accordingly, I thought it would be helpful for founders to discuss these rights and to point out the problems they create for startups. I liken it to participating preferred — which founders also do not typically understand until it is too late. Pro Rata Rights. The post WHAT ARE SUPER PRO RATA RIGHTS?

Preferred Stock 56

Preferred Stock Term Sheet Dilution Stock 56

Startup Company Lawyer

FEBRUARY 21, 2010

Due to aggregate liquidation preferences that may exceed the acquisition price in an M&A deal, common stock may be rendered worthless. I was speaking at an event last month to a group of CEOs and was surprised by the number of CEOs that were worried about the value of their common stock in a M&A transaction.

Retention 31

Retention Liquidation Preference Employee Common Stock 31