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Accepting Outside Investors? Here Are 5 Things to Watch Out for in Your Contract

Up and Running

The version of “anti-dilution protection” that most benefits outside investors is commonly called a “full ratchet.” As a middle ground on the “anti-dilution clause” you should be pushing for what’s called a “partial ratchet.” As the small business owner, the goal is just to understand how to negotiate the clause to serve you best.

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Term-sheets and Valuations: Thinking about Negotiations - Startups.

Tim Keane

Good investors use the valuation discussions to gauge the business savvy of the management team and to understand their ability to appreciate and deal with economic market forces that set values.   For individual angels and others investing their own money, this may be more fluid than for someone with responsibility for a managed fund.