Common Stock Distribution Sales 
Both Sides of the Table
JULY 22, 2010
This states how the proceeds from a sale or dissolution of the company will be distributed. This means that participation truly only applies in downside scenarios and once your exit outcome is above a certain price investors would still be better off converting to common stock and not taking their preference.
YoungUpstarts
AUGUST 25, 2015
Owners of corporations also pay taxes when they are paid dividends or profit from sale of the stock, which is why it is common to say that corporations are “double-taxed.” An LLC offers greater control over how earnings are used and distributed, but even LLCs have to be reasonable in how they distribute (i.e.
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Startup Company Lawyer
MARCH 14, 2010
If I represent investors in a later Series A financing, I would probably use the existence of the drag-along as an excuse to implement a more aggressive drag-along provision — which does not require the approval of the holders of common stock to trigger. Co-sale rights. Changes in preferred and merger/sale of assets only.
David Teten
JANUARY 19, 2021
Eligible for favorable treatment under Qualified Small Business Stock exemption, if structured as equity. This applies if the investment converts into common stock; details are beyond this essay’s scope. Flexible VC creates early liquidity which can be either reinvested or distributed to LPs. Early liquidity. Governance.
www.inc.com
SEPTEMBER 24, 2011
Sales & Marketing | Wednesdays. SALES & MARKETING. Graham also pushes for common stock, the right to participate in future funding rounds to preserve the size of the stake, and a guaranteed seat on the board. CDW your 1-stop resource for configuration, activation & distribution. Finance | Tuesdays. Newsletters.
Growthink Blog
JANUARY 24, 2011
The liquidation preference means what is sounds - namely that preferred stock holders with this right get all of their money back (i.e. liquidate their shares) before any distribution of proceeds in the event of a sale of a company. This is an extremely valuable preference that can best be shown by example.
Tim Keane
JANUARY 12, 2010
It also assumes the entire value of the investment is captured for investors at a sale of the company in the time specified in the term-sheet. This results in a range of sale prices; in this example from $118.6MM to $21MM. In most cases, the preferred dividend is paid before any dividend is paid to the common.
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