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Eric A Koester

Eric Koester’s Legal Guides

23 total

  • Understanding the Series A Term Sheet: Summary

    For many high-tech businesses looking to raise funding, receiving a term sheet from a Venture Capital Firm represents a major accomplishment. But understanding and finalizing that term sheet is the real accomplishment. This guide has details to help understand a Series A Term Sheet.

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  • What to Expect in Negotiations of a Venture Capital Term Sheet

    Be Pragmatic Negotiating a term sheet with a venture capital firm may seem like a challenge. And, there will be some challenging aspects to the negotiations. However, remember that the venture capi

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  • Startup Venture Capital Term Sheet: Valuation

    What is Valuation? Valuation refers to the value of the Company as established by agreement between the Company and the investors. Investors typically refer to “pre-money valuation” and “post-money

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  • Venture Capital Term Sheet: Dividend Preference

    Why would a term sheet include dividends? A typical term sheet will include a non-cumulative dividend on the preferred stock — usually set at between 8 and 10% of the purchase price per annum. While

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  • Venture Capital Term Sheet: Liquidation Preference (PART 1: General)

    What is a Liquidation Preference? The vast majority of term sheets will include a liquidation preference for the Preferred Stock – basically ensuring that the investors are paid out first if the comp

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  • Venture Capital Term Sheet: Liquidation Preference (PART 2: Preference Multiples)

    Recap: What is a Liquidation Preference? The vast majority of term sheets will include a liquidation preference for the Preferred Stock – basically ensuring that the investors are paid out first if t

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  • Venture Capital Term Sheet: Liquidation Preference (PART 3: Participating Preferred Stock)

    Recap: What is a Liquidation Preference? The vast majority of term sheets will include a liquidation preference for the Preferred Stock – basically ensuring that the investors are paid out first if t

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  • Venture Capital Term Sheet: Liquidation Preference (PART 4: Capped Participating Preferred Stock)

    Recap: What is a Liquidation Preference? The vast majority of term sheets will include a liquidation preference for the Preferred Stock — basically ensuring that the investors are paid out first if t

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  • Venture Capital Term Sheet: Redemption Rights

    What are Redemption Rights? The term sheet may include a provision to require the Company to redeem (“buy back at the original purchase price plus an annual carrying cost”) the preferred stock. Inve

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  • Venture Capital Term Sheet: Drag-Along Rights

    What are Drag-Along Rights? The primary purpose of drag-along rights are to ensure that the investor’s shares won’t be held hostage in the event of a favorable acquisition or merger event. Drag-alon

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