Note: This is an advanced extension of our venture capital term sheet series. It is intended for founders and executives who have already internalized the conceptual purpose of liquidation preferences—as downside protection...
Author: Khaled El Fauri
Series 2 · Term Sheets, Deconstructed · Post 7 of 9 · 8 minutes Anti-Dilution: Weighted Average vs Full Ratchet In short. Anti-dilution protection lowers the conversion price of an investor’s preferred shares when...
You have spent the last few weeks deconstructing the individual gears of the venture capital machine. You now understand the linguistic traps of pre-money versus post-money valuation, the “silent dilution” of the...
In the previous installments of this series, we have focused heavily on the “Economics” half of the venture capital term sheet. We have dissected how valuation is measured, how dilution occurs on a fully diluted...
In our ongoing deconstruction of the venture capital term sheet, we have traveled from the psychological heights of headline valuation to the granular depths of the “fully diluted” capitalization table. You should...
In short. An investor holding non-participating preferred shares takes one of two amounts at a sale: its money back, or its percentage of the price. With participating preferred it takes both: its money back first, then its...
In our previous discussions, we have deconstructed the headline valuation and the various ways your ownership is calculated on a “fully diluted” basis. By now, you likely have a clear view of what percentage of...