VC Cafe

OCTOBER 31, 2022

TVPI = total value to paid in capital (paper gains) DPI = distributed to paid-in capital (real cash gains, paid out). 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.

Founder 174

Founder Technical Review Down Round Liquidation Preference 174

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

ithacaVC

DECEMBER 14, 2011

Continuing with the “No Mess” theme of commenting on things that give VCs pause, I thought it would be good to touch on liquidation preference. Specifically, “too much” liquidation preference (I will use “LP” for liquidation preference). 10 million) to Series B LP. ($4

Liquidation Preference 49

Liquidation Preference LP Preferred Stock Liquidity Event 49

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

Growthink Blog

JANUARY 24, 2011

One very popular "preferred right" or "preference" that adds very significant value to outside investors and is common in venture capital investments is a liquidation preference. The liquidation preference means what is sounds - namely that preferred stock holders with this right get all of their money back (i.e.

Preferred Stock 93

Preferred Stock Stock Common Stock Liquidation Preference 93

Both Sides of the Table

MARCH 3, 2013

Obviously that barrier has been brought down with low-cost ability to capture, stream and distribute content over the Internet. The numerator (return) encourages more sales, which is fine. We talked about Liquidation Preference, Voting Rights, and all of the other valuable terms crowd-funding investors don’t understand.

Bankruptcy 403

Bankruptcy Offshore Liquidation Preference Balance Sheet 403

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