Both Sides of the Table

SEPTEMBER 5, 2012

Was Paul Graham right in his “high resolution” financing post? Because convertible debt deals often have both a ‘full ratchet’ and often have ‘multiple liquidation preferences’ “ Yup. You rarely find full ratchets in early-stage deals any more. Some thoughts on raising angel money.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

Both Sides of the Table

DECEMBER 11, 2022

Almost no financings, many VCs and tech startups cratered for the second time in less than a decade following the dot com bursting. SEEING THINGS FROM THE VC SIDE OF THE TABLE While I was a VC in 2007 & 2008 those were dead years because the market again evaporated due the the Global Financial Crisis (GFC).

Valuation 466

Valuation San Francisco Ratchet Liquidation Preference 466

Both Sides of the Table

SEPTEMBER 18, 2014

At an accelerator … Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago. Truthfully.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Feld Thoughts

JUNE 10, 2022

I like the quote she pulled out of me in our conversation. Rather, when you have a choice between a financing at a lower valuation and a financing with all kinds of crazy structure to try to maintain a previous valuation, negotiate the best price you can but do a clean financing with no structure.

Down Round 162

Down Round Ratchet Liquidation Preference Participating Preferred 162

Tim Keane

JANUARY 12, 2010

For angel groups, the distinction between groups and VCs on this issue is dwindling, especially as angel groups do bigger rounds of financing.   Note that this applies only to earl stage Series A-type equity financings and assumes no cash dividends are paid to investors.   First , dividends.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Both Sides of the Table

MAY 30, 2015

This is called a “full ratchet,” which is also historically a term that VCs would be crucified for trying to get away with but I’ll avoid talking about that in this post.]. On VC financings this term is explicit so entrepreneurs understand they’re getting screwed. It’s the silent screwing that stings.

Liquidation Preference 150

Liquidation Preference Ratchet Angel Investor Entrepreneur 150

David Teten

JANUARY 13, 2015

There’s a dialect and lexicon in African American households that many people are unfamiliar with, so when these words creep out of your mouth during professional conversations and pitches, your intelligence is often being unfairly downgraded – it sadly is! I know people who are very smart, but still sometimes say, “that’s mines”.

Venture Capital 60

Venture Capital Advisory Board Greece Cofounder 60