The enterprise in venture capital investment evaluates the 3- that uncover secre
From;    Author:Stand originally
Interpret the another article Liquidation Preferences from Brad Feld. A bit as dry as a chip. Of course you also have an option at the moment, or choice is painful now, when or chooses happen to to sign financing agreement, be done to get confused and disoriented by pile law file, next muddled muddled understands, below autograph of ground of Duo shiver Suo " sell oneself or a member of one's family engraves " . :)

Talk above allPreferential the authority that beg countervailconcept. (refer to " achieve cast an enterprise to evaluate uncover close (1) " ) preferential the way of a standard that the authority that beg countervail is venture capital investment (and have the room that negotiate rarely) . It is the protection of investment floor level that home of venture capital investment expects to get, it is the bottom line that they have any equity invest.


The project of venture capital investment of great majority is withPreferentialthe form operates. Call preferential, because,be common stock of their precede over, common stock is the commonnest share in a company (textual be " sweetgrass flavour " , annotate sees " the 10 big lie of home of venture capital investment " ) normally project of venture capital investment, common stock of hold of the person that do poineering work, employee acquires common stock or use those who buy common stock period authority, and what home of venture capital investment takes is preferential. This kind preferential always contain include preferential a series of special rights that seek countervail to counterpoise inside. Preferential the authority that beg countervail is to point to in happen set when showing a chance, home of venture capital investment enjoys a kind of option, or scores gain of preferential pay off, or will be preferential changeover is common stock and certain proportional property regards hold company as investment redound.


E.g. , apical venture capital (apical) software of horse of invest in carry on one's shoulder (horse of carry on one's shoulder) , one is built up from nothing by father founding company. Software of horse of carry on one's shoulder is in had gone up in existing market in 12 months in the past put in a kind of product, sale reachs 3 1 million dollars. Acme is to value of estimate of the company before investment 10 million, investment 5 1 million. Invest the one part of arrangement as this, 10 million lis when the appraise before acme and author of horse of carry on one's shoulder agree to invest from the company is worth take out the share of 20% to regard the share that receives employee newly as period authority (refer to " achieve cast an enterprise to evaluate uncover close (2) " ) . The result is horse of apical hold carry on one's shoulder the share of 33.3% , father hold 46.7% , 20% for employee obligate. In this example, what acme buys is to contain preferential the A series of the authority that beg countervail (note 1) preferential.

Now, we consider two kinds of results respectively.
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