Term Sheet: Liquidation Preference

The liquidation preference determines how the pie is shared on a liquidity event. There are two components that make up what most people call the liquidation preference: the actual preference and participation. To be accurate, the term liquidation preference should only pertain to money returned to a particular series of the company’s stock ahead of other series of stock.

 

(Full Post: http://www.feld.com/wp/archives/2005/01/term-sheet-liquidation-preference.html)


brad.jpg

Brad Feld

Brad Feld has been an early stage investor and entrepreneur since 1987. He is currently a Managing Director at Foundry Group. Prior to co-founding Foundry Group, he co-founded Mobius Venture Capital and, prior to that, founded Intensity Ventures. Brad is also a co-founder of TechStars.

Twitter  |  Blog  |  Company Profile 




Filed Under:
Collection: Funding
Category: Term Sheet Terms