Demand Preferred Stock Sales 
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
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). What happens in a sale or acqui-hire? So they'll feel cheated. Is there way around this?
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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. A royalty based investment is an exciting mode of funding.
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. Co-sale rights. Why is it called Series Seed? What rights does the Series Seed have? Voting agreement.
Startup Professionals Musings
JANUARY 15, 2021
Make sure the government waits for a stock sale to collect taxes. Facilitate an upgrade of founder’s common to founder’s preferred. Investors typically demand preferred stock to give them more control and first payouts, but these advantages can be at least partially offset (up to 20 percent) if you plan ahead.
Startup Professionals Musings
SEPTEMBER 26, 2015
For later investments, the price is equity, with a percentage of the owner stock to be assigned to the investor. Type of stock assigned to the investor. Investors typically demand preferred stock, to give themselves certain voting and liquidation privileges over later shareholders. Investor liquidation priority.
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