As a startup founder raising funds from venture capital investors, you’ll encounter a variety of terms and concepts that can significantly impact your company’s future. One crucial term is “liquidation preference.” In this blog, we’ll discuss what liquidation preference is, the types of liquidation preferences, why investors want them, their prevalence in venture capital deals, implications for startup founders, and …
Understanding Dividends in a Venture Capital Deal
As a startup founder raising venture capital, it’s essential to understand the financial terms that may be included in your investment agreement. One such term is dividends, which can affect your company’s cash flow and the way profits are distributed among shareholders. In this comprehensive guide, we will explore what dividends are, why they might be included in the terms …
What is a Qualified Financing Round for Startup Founders
When raising venture capital, startup founders will likely come across the term “qualified financing round.” As a founder, understanding the concept of a qualified financing round is crucial to navigating your fundraising journey. This blog will provide a comprehensive overview of what a qualified financing round is, its implications, and how it impacts your startup’s fundraising process. Definition of a …
Understanding Participating Preference Shares: A Guide for Startup Founders
As a startup founder gearing up for a fundraising round, it’s crucial to familiarize yourself with the different types of shares that venture capital investors may request in exchange for their investment. One such type of share is the participating preference share. In this blog, we will explore the concept of participating preference shares, their benefits and drawbacks, and their …
What are Non-Cumulative Preference Shares?
As a first-time startup investor, it’s essential to grasp the various types of shares that companies can issue during a fundraise. One such share type is non-cumulative preference shares. In this blog, we will discuss the basics of non-cumulative preference shares, their advantages and disadvantages, and how they differ from other types of shares, particularly cumulative preference shares. What are …