Entries tagged with “valuations”

Multiple X Preferences

Posted by Dave Broadwin on January 20, 2009
In the rogue’s gallery of investor protective provisions that come out of their cave in bad times, the multiple X preference is among the first. A preference is a provision that gives an investor a return in the event of a sale of the business before any money goes to the common stockholders. So, in a typical (and very commonly seen in good times as well as bad) 1X participating preferred, the investors get a payment in an amount equal to their investment plus accrued and unpaid dividends before the common get anything. After receiving this payment, the investors participate with the common... More

Knowing Current Market Terms for Venture Investments

Posted by Dave Broadwin on September 05, 2008
One area in which you might think that first-time entrepreneurs are at something of an information disadvantage to venture capitalists (or sophisticated angel investors) is knowledge of what are and what are not current market terms.  You would think that these seasoned investors would know what is being agreed to at any given time in the market.  However, it turns out that some do and some don't, and some have strong opinions that are not supported by empirical evidence.  For this reason, if you are seeking funding, you need to check the facts for yourself. I was recently told by... More
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