Both Sides of the Table

JULY 22, 2010

Things like “ participating preferred stock &# in legalese unsurprisingly never actually call out, “hey, this is the participating preferred language.&# We got a3x participating liquidation preference with interest (not participating with a 3x cap, but 3x participating. 4 * $4 million) and not $4 million.

Valuation 405

Valuation Liquidation Preference Pre-Money Valuation Term Sheet 405

Both Sides of the Table

SEPTEMBER 5, 2012

Because convertible debt deals often have both a ‘full ratchet’ and often have ‘multiple liquidation preferences’ “ Yup. Convertible Notes Also Can Have Multiple Liquidation Preferences. Convertible notes often have multiple liquidation preferences. That’s right.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

VC Cafe

OCTOBER 31, 2022

Liquidation preferences – in addition to lower valuations, investors are looking for protective provisions. That means that in these down rounds, some investors are asking to 2-5x liquidation preferences. Reduce burn, keep on shipping and focus on sales efficiency. Keep your head up! Things will get better.

Founder 173

Founder Technical Review Down Round Liquidation Preference 173

crowdSPRING Blog

MARCH 13, 2014

Good read for entrepreneurs & startup employees on liquidation preferences – crowdspring.co/1neVvzy. My guess: poor results & low demand – crowdspring.co/1gY63vJ. New Jersey Votes to Block Tesla’s Direct Sales – crowdspring.co/1gnUjAX. Does A Billion-Dollar Valuation Buy Employee Happiness?

Social Media 96

Social Media Small Business Design Media 96

Startup Company Lawyer

MARCH 14, 2010

The primary rights in these documents, ranked in order of importance in my opinion are: Non-participating preferred liquidation preference. The liquidation preference would not apply in this situation, and any distribution to stockholders would trigger the dividend preference. Co-sale rights.

Finance 70

Finance Software Review Term Sheet Liquidation Preference 70

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.

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

Startup Professionals Musings

SEPTEMBER 26, 2015

Investors typically demand preferred stock, to give themselves certain voting and liquidation privileges over later shareholders. Preferred shares are not possible with a limited liability corporation (LLC), so expect to convert to a C-corp to get an equity investment. Investor liquidation priority.

Term Sheet 120

Term Sheet Demand Preferred Stock Liquidation Preference 120