Both Sides of the Table

SEPTEMBER 28, 2013

The don’t understand VC liquidation preferences or multiple return expectations. Good press and industry mojo wasn’t enough to overcome the financial metrics of the business and the offers came in at more like $10 million. You take the meeting but you’re not really pursuing it. It was not.

Startup 417

Startup Dilution San Diego Stock Options 417

Gust

SEPTEMBER 17, 2014

Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago. There were no metrics. Him: On metrics.

Liquidation Preference 153

Liquidation Preference Valuation Term Sheet Stock 153

K9 Ventures

JUNE 5, 2015

As the check size increases, investors tend to look for more traction, established revenue models, proven unit-economics, and other metrics that were previously associated with later stage companies. So if the Micro-VCs are looking for Series A-like metrics, what does a company do when it’s just getting started?

Seed Stage 48

Seed Stage Venture Capital Early Stage Valuation 48

Growthink Blog

MAY 23, 2011

It is driven by the following: • The Best Metric for the Health of a Company is Cash Flow. Yes, you heard me right – multiple research studies, including from the Kauffman Foundation , have shown that when you remove a follow-on venture capital round from a founder or angel investor-funded company, that expected returns skyrocket.

Angel Investor 112

Angel Investor Venture Capital Sweat Equity Cram Down 112

Feld Thoughts

SEPTEMBER 9, 2015

Some will demonstrate strategically justifiable metrics and have fantastic ‘up round’ exits; others may see liquidation preferences kick in which will negatively impact founders and employees; others may fulfill the adage “IPO is the new down round” , which has been the case for more than half of the public companies on our list.

Liquidation Preference 70

Liquidation Preference Burn Rate Balance Sheet .Net 70

abovethecrowd.com

APRIL 20, 2016

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

IPO Term Sheet Silicon Valley Valuation 40

Board Effect

MAY 10, 2019

Cap tables list a company’s authorized and outstanding shares, the parties to which those shares have been assigned, and the various metrics relevant to managing them. Such metrics can include an investor’s liquidation preference, option exercise windows and expiry dates, and shareholders’ fully diluted ownership percentages.

Cap Table 40

Cap Table Liquidation Preference Dilution Liquidity Event 40

abovethecrowd.com

MAY 20, 2013

There are common stock, common options, and as many as three to five different layers of preferred stock, each with a specific liquidation preference. Anyone can create any number they want (within reason), as there is no one specific formula or metric for such work.

Merger 53

Merger Institutional Investors Liquidation Preference Preferred Stock 53

Startup Company Lawyer

FEBRUARY 21, 2010

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.

Retention 31

Retention Liquidation Preference Employee Common Stock 31

aweissman.com

JUNE 5, 2011

The fitness function of a venture capitalist — meaning the metrics of performance, the report card — is pretty pure. The fitness function of a venture capitalist — meaning the metrics of performance, the report card — is pretty pure. skip to main | skip to sidebar. aweissman.com. Jun 5, 2011. at 10:10 AM.

Liquidation Preference 29

Liquidation Preference Angel Investor Incubator Early Stage 29

K9 Ventures

OCTOBER 19, 2015

I like to think of it as looking at the derivative (in a mathematical sense, not a financial sense) is often more revealing than looking at the raw change in a metric. I imagine that that’s almost like a new thing for several of the wall-street type investors since they typically only invested in common stock in liquid markets.

Venture Capital 48

Venture Capital Liquidation Preference Valuation Portfolio 48