Remove Forecast Remove Ratchet Remove Revenue
article thumbnail

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

Up and Running

What this means, is that he gets paid not as a portion of the profit, but as a portion of the overall revenue, regardless of the profit. The version of “anti-dilution protection” that most benefits outside investors is commonly called a “full ratchet.” Liquidation preference.

article thumbnail

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

Tim Keane

3]   However, if they are built bottom up, they demonstrate and make explicit a range of business model assumptions the entrepreneur is using to think about his business and its revenue model.   In a bottom up approach, the forecast is built from actual user projections. This is why a bottom up approach is more credible.