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Tim Wolters on The Liquidation Preference

Tim Wolters – the CTO of Collective Intellect – is in the middle of a financing and blogging about some of the terms.  Today’s is the liquidation preference.  It’s interesting to compare it to what Jason and I wrote in 2005 about liquidation preferences in our Term Sheet series.

Tim Wolters – the CTO of Collective Intellect – is in the middle of a financing and blogging about some of the terms.  Today’s is the liquidation preference.  It’s interesting to compare it to what Jason and I wrote in 2005 about liquidation preferences in our Term Sheet series.

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Annotated Term Sheet

Rick Segal has the helpful VC post of the day up on his site at Post Money Value titled Annotated Term Sheet and the Secret Prize.  Rick links to annotated term sheet for an early stage VC investment from lawyer Craig Brown at  Fasken Martineau DuMoulin LLP.  Having just read through this, it nicely compliments the […]

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Do Venture Capitalist Ever Use Their Redemption Rights?

Q: Have you experienced a company which grows along nicely, but does not offer a liquidity event? In the funding agreement, there is a clause for redemption rights. Is this used so that the VC can get out of the investment? A: (Jason). Yes, we’ve experienced companies growing nicely without liquidity events. And yes, we […]

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How Do VCs Discount For Lack Of Marketability of Stock?

Question: While valuing a private company and arriving at a valuation do VCs take into consideration a discount for lack of marketability. If at all, how do they objectively arrive at a figure for such discounts? All of our deals have a lack of marketability in their securities. Startup companies, by definition, don’t have a […]

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