Both Sides of the Table

FEBRUARY 14, 2016

I’d like to explain as best I can my opinion on what is going on because most of what I hear from entrepreneurs is not only wrong but is reminiscent of what I heard in 1997-2000. ” “This will be great for VCs and bad for entrepreneurs.” What is the True Sentiment of VCs? ” “Sure, prices are dropping.

Valuation 150

Valuation Down Round Startup Later Stage 150

Feld Thoughts

JUNE 2, 2015

The other day, Mark Suster wrote a critically important post titled One Simple Paragraph Every Entrepreneur Should Add to Their Convertible Notes. As an angel investor, I have never asked for a liquidation preference on conversion that is greater than the dollars I’ve invested. Go read it – I’ll wait.

Liquidation Preference 70

Liquidation Preference Cap Table Angel Investor Post-Money Valuation 70

Scott Edward Walker

JULY 27, 2011

There is, however, another set of rights with which many entrepreneurs may not be familiar: State law rights. There are, however, certain formal procedural requirements that the stockholder must comply with, including making a written demand upon the corporation, “under oath” and stating a “proper purpose.”

Delaware 49

Delaware Liquidation Preference Redemption Los Angeles 49

ithacaVC

APRIL 25, 2012

If you give an actual number and it is too high, you have just given that VC a reason to say no (as in “why do I want to deal with an entrepreneur whose expectations are out of whack with my reality”). That demand will accelerate the relationship building and the valuation discussion.

Valuation 49

Valuation Pre-Money Valuation Liquidation Preference Preferred Stock 49

Spencer Fry

APRIL 17, 2017

What I worry about is the demand on every one of your potential customer’s attention and time. As a bootstrapper, you have nobody above you on the cap table (note: investors sit above you in their liquidation preference), so it’s your way or the highway. More respect from other entrepreneurs. Competition is everywhere.

Bootstrapping 63

Bootstrapping Cap Table Liquidation Preference Cofounder 63

Professor VC

JULY 25, 2013

This is the feeling you get from watching the venture capitalists talk about the entrepreneurs and other investors in the film. In investment parlance, it strictly means that new classes of stock have equal rights with prior classes in terms of liquidation preference, voting rights, etc.

Term Sheet 46

Term Sheet Silicon Valley Syndication Syndicate 46

Startup Professionals Musings

SEPTEMBER 26, 2015

Most entrepreneurs looking for an investor can tell you how much money they need, but few have given much thought to what they are willing to give up for it. Investors typically demand preferred stock, to give themselves certain voting and liquidation privileges over later shareholders. Board of directors participation.

Term Sheet 120

Term Sheet Demand Preferred Stock Liquidation Preference 120

abovethecrowd.com

APRIL 20, 2016

Many modern entrepreneurs have limited exposure to the notion of failure or layoffs because it has been so long since these things were common in the industry. Examples of dirty terms include guaranteed IPO returns, ratchets, PIK Dividends, series-based M&A vetoes, and superior preferences or liquidity rights.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Up and Running

MARCH 29, 2017

I knew I wanted to be an entrepreneur long before I could even spell entrepreneur. I’d always been an entrepreneur, so having my first taste of a full-time job was something I was both happy to do and gave me a great sense of what that “other life” would look like. See Also: What Do Venture Capital Firms Want?

Term Sheet 60

Term Sheet Venture Capital Liquidation Preference Valuation 60