Posts Tagged 'liquidation preference'

The Liquidation Preferences Debate

March 16 2011 No Commented

The terms and conditions under which angel investors fund startup entrepreneurs are defined by non-binding term sheets.  Liquidation preferences are a commonly negotiated term and come in several flavors: 1X non-participating liquidation preference – At exit, this preference give investors the option of getting their money back or participating pro rata in the exit with […]

Seasoned Angel often Favor Preferred Shares

April 7 2010 No Commented

Seasoned Angel often Favor Preferred Shares Professional investors, angels and venture capitalists alike, often stipulate that companies in which they invest establish a second class of stock (preferred, in addition to ordinary or common shares) and that the investors then purchase preferred securities.  What are the advantages to investors of preferred shares? The shareholder agreements […]