Venture Capital Term Sheet: Voting Rights
Jan 01, 2009
What are Voting Rights? Venture preferred stock typically has voting rights, computed based on the number of shares of common stock into which the preferred stock can be converted. In addition, the ...
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Venture Capital Term Sheet: Co-Sale Rights
Jan 01, 2009
What are Co-Sale Rights? In order to prevent a situation where, following an investment, the founders jump ship and sell their shares to a third party investor, most venture financings will include a...
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Venture Capital Term Sheet: Registration Rights
Jan 01, 2009
What are Registration Rights? Registration rights are an important right to investors since they provide a contractual right for investors to demand that the company register their shares with the U....
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Venture Capital Term Sheet: Drag-Along Rights
Jan 01, 2009
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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Venture Capital Term Sheet: Redemption Rights
Jan 01, 2009
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: Liquidation Preference (PART 4: Capped Participating Preferred Stock)
Jan 01, 2009
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)
Jan 01, 2009
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 2: Preference Multiples)
Jan 01, 2009
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 1: General)
Jan 01, 2009
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: Dividend Preference
Jan 01, 2009
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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