Remove Distribution Remove Liquidation Preference Remove Metrics
article thumbnail

In 15 Years From Now Half of US Universities May Be in Bankruptcy. My Surprise Discussion with @ClayChristensen

Both Sides of the Table

Obviously that barrier has been brought down with low-cost ability to capture, stream and distribute content over the Internet. He believes that one of the financial metrics taught at business schools and reinforced by Wall Street has accelerated offshoring of industries. “Online education is truly going to kill us.”

article thumbnail

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

Tim Keane

.   At the financial level , and assuming a harvest of the investment in the company without the need for further financing, two terms stand out as driving economics: the dividend and the liquidation preference. Second a liquidation preference and a participation.   First , dividends.

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Trending Sources

article thumbnail

Startup Fairy Tales and Other Tall Tales That Venture Capitalists Tell

Growthink Blog

It is driven by the following: • The Best Metric for the Health of a Company is Cash Flow. At the end of the period, all profits and proceeds are distributed to the various partners on a pre-determined split. This is very counter-intuitive but critical insight for emerging company entrepreneurs and those that back them to grasp.

article thumbnail

On the Road to Recap:

abovethecrowd.com

Anything that hints of a down round brings questions about the success metrics that have already been “booked.” If you really want to liberate your own common shares and those of your employees, then you want to convert the preferred to common and remove both the control and the liquidation preference over your shares.

IPO 40
article thumbnail

What is an employee retention or M&A carveout plan?

Startup Company Lawyer

Due to aggregate liquidation preferences that may exceed the acquisition price in an M&A deal, common stock may be rendered worthless. If you can’t figure this out yourself, you should probably build a liquidation preference spreadsheet to model how liquidation preferences work depending on M&A transaction value.