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.
Both Sides of the Table
JULY 29, 2010
The downside is that people need to buy their stock. I talked also about 409a valuations and why common stock purchases cost less than preferred stock purchases. But if you do this early (pre VC) then the price points are pretty low. Do it early. Bad behavior but prevalent. Minutes 11-16 in the video. <<
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Both Sides of the Table
SEPTEMBER 5, 2012
They are either a sign of naive founders or naive investors (because they will quickly develop a reputation in the market and because future investors in that company will all demand your terms, which therefore will include a full ratchet). So they'll feel cheated. The third option is the one I listed below, which is what I have done.].
Startup Professionals Musings
NOVEMBER 30, 2015
A C-corporation is more complex and expensive, and is recommended only if you expect to pitch to professional investors who demand preferred stock, or to more than 100 potential shareholders. In the United States, this is a limited liability corporation, or LLC.
Startup Company Lawyer
AUGUST 31, 2012
” As a result, Ted introduced the Series Seed preferred stock documents as an alternative to convertible debt for early stage investments. At the maturity date, there is a risk that investors may demand repayment. The problem. Why convertible equity is better than convertible debt. Convertible debt may need to be repaid.
ReadWriteStart
JUNE 1, 2020
In very few specific cases, depending on the nature of the business, the business model might demand a considerable gestation period or extensive research and development. The shares given out can either be common stocks or preferred stocks. ? Debt investment.
Startup Company Lawyer
MARCH 14, 2010
To differentiate it from typical “Series A&# preferred stock, which comes with certain expectations with regard to rights. There is no real rule to what a particular series of preferred stock is called. The only way that the Series Seed documents will be widely used is if investors demand use of the documents.
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