Term Sheet Definitions PE条款清单Word下载.docx
- 文档编号:20006198
- 上传时间:2023-01-14
- 格式:DOCX
- 页数:8
- 大小:18.49KB
Term Sheet Definitions PE条款清单Word下载.docx
《Term Sheet Definitions PE条款清单Word下载.docx》由会员分享,可在线阅读,更多相关《Term Sheet Definitions PE条款清单Word下载.docx(8页珍藏版)》请在冰豆网上搜索。
“4on6”=
$6Mpre-moneywith$4Mround=
$10Mpost-money;
VCsown40%ofthecompany
Control,Ownership&
EconomicPower
5KeyTermstoNegotiate:
BoardofDirectors
Vesting
OptionPool
ParticipatingPreferredStock
Anti-DilutionProtection
Boardofdirectors(continued)
Notsubjecttopubliccompanyregulations
Pre-money--usuallyconsistsofemployeesonly
Post-money--amixofVCs,employees,outsiders
Compositionpost-money
Aimfor“2-2-1”?
Vesting
Percentageofcompany’stotalstockpost-moneythatwillbereservedforfuturehires
VC’spreferredstockisaddedintocalculationon“as-converted”basis(1:
1)initially
TypicalAround:
15-25%
Poolalwayscomesoutoffounders’,notVC’sshare
Typical“CapTable”post-money:
VC1
35%
Vc2
15%
total
50%
common
founder
opinion
Haveyoualreadylosteffectivecontrol?
Poolisnecessity;
don’tcheapout.
ParticipatingPreferred
1.“Liquidationpreference”:
VCsget100%oforiginalmoneybackbeforeCommongetsonepenny
2.Then,VCs“participatein”(take)proratashareofleftoverswithCommon
Co.has$60pre-moneyvaluation
VCputsin$40
Co.has$100post-money
VCowns40%(4/10)
2yearslater,Co.soldfor$160...
$160proceeds
VCgets:
$40backrightoffthetop(investmentreturned),plus
$48=40%of$120(VC’spercentageownershipofleftoverassets)
$88total(55%ofCo.value)
Commongets:
$72=$160-$40-$48
$40=“VC’spreference”
$48=“VC’sparticipation”
$72total
45%ofCo.value,despite
60%ofCo.ownership
VC’sprotectionineventof“downround”sothatARoundinvestors’“conversionratio”isequaltosubsequentinvestors’.
2flavors:
“fullratchet”and“weightedaverage.”
FullRatchet:
draconian;
“ifonlyonenewshareisissued”inBround,allAroundinvestorsentitledtoBround’sconversionratio.
WeightedAverage:
Lessharsh;
takesintoaccountthetruedilutiveeffectofthesubsequentdownround.
•broad-based(founderfriendly)
•narrow-based(almostlikefullratchet)
Broad-BasedWeightedAverage
广泛基础加权平均
一种在企业进行后续发行时保护现有优先股股东的反摊薄条款。
广泛基础加权平均条款适用于所有以往发行的股票及当时进行的发行
Preferredstocktypicallyisissuedwithwhatisoftenreferredtoasstructural(nonprice
based)anti-dilutionprotection,whichprotectsagainsttheeffectsofstock
dividends,stocksplits,reversesplits,andotherrecapitalizations.Thisisthemostbasic
formofanti-dilutionprotection.
Anotherformofnon-pricebasedanti-dilutionprotectionisarightoffirstrefusal
(alsocalledapreemptiverightorarighttoparticipate).Theseprovisionsallowthe
preferredstockholdertopurchaseaproratashareoffutureissuancesofstockbythe
company(orsalesofstockbythefounders),therebypermittinganinvestortomaintain
hisorherpercentageownership.Theseprovisionsareparticularlyimportantin
protectinganinvestor’sownershippercentageinan“upround”offinancing.
itiscommonfortheserightstobeaccompanied
byanexceptionforthesaleofstocktostrategicpartners,consultants,employees,or
directors.
Furthermore,in
exchangeforgrantingsuchrights,anentrepreneurmayrequestthattherightbe
reciprocal(i.e.,thatthecompanyorentrepreneurhasarightoffirstrefusalonsalesofthe
preferredstockbytheinvestor).
Anti-Dilution(pricebased)
Thevaluationofearlystagecompaniesishighlyuncertain.Asaresult,an
investorcouldbeinvestinginacompanywhosevalueadjustsdownwardbeforethe
companystabilizesandresumespositivegrowthinvalue.Forthisreason,investorsoften
seekpriceprotection—thatis,protectionfromthedilutiveeffectsofalaterroundof
financingthatispricedbelowthepriceatwhichtheyboughtintothecompany.There
aretwocommonformsofpriceprotection:
full-ratchetanti-dilutionprotectionand
weightedaverageanti-dilutionprotection.
Full-ratchetanti-dilutionlowerstheconversionpricetothepriceatwhichany
newstockissold.Thistypeofprotectionisgenerallyconsideredtobeasevereformof
anti-dilutionprotectionbecauseitforcesthecommonshareholderstoabsorbmostofthe
dilution.Forexample,assumethattheSeriesAinvestorboughtpreferredsharesat$1.00
pershareand,later,SeriesBinvestorsboughtsharesat$0.50pershare,thenthe
conversionpriceofthepreferredsharesownedbySeriesAinvestorswouldbeadjusted
downwardto$0.50.Ineffect,theadjustmentintheconversionpriceallowstheSeriesA
investorto“pay”thesameforitssharesastheSeriesBinvestor.3Importantly,this
pricingadjustmentoccursregardlessofhowmanysharesareissued(ortheamountof
moneyraised)intheSeriesBround.Thus,acompanyseekingtoissueasmallnumberof
sharesinordertoraisetheneededcapitalwillbeforcedtoadjusttheshareownershipof
allpreferredshareholders.
Table1
Conversion
Priceof
Preferred
Shares
Issued
(000'
s)
Common
SharesAfter
Percentof
Company
Owned
Capitalization−NoDilutionProtection
FirstRound
CommonShares7,5007,50075.00%
SeriesAPreferredShares2,5002,50025.00%
SeriesAConversionPrice$1.00
SecondRound
CommonShares7,5007,50062.50%
SeriesAPreferredShares$1.002,5002,50020.83%
SeriesBPreferredShares$0.502,0002,00016.67%
SecondRoundCapitalization–Full-RatchetDilutionProtection
CommonShares7,5007,50051.72%
SeriesAPreferredShares$0.502,5005,00034.48%
SeriesBPreferredShares$0.502,0002,00013.79%
WeightedAverageAnti-DilutionProtection
Anotherfrequentlyencounteredformofdilutionprotectioninearlystagedealsis
weightedaverageanti-dilution.Weightedaverageanti-dilution(WAAD)isgenerally
thoughttobemorefavorabletotheentrepreneurwhotypicallyholdscommonshares.As
shownintheformulabelow,WAADadjuststheconversionpriceoftheSeriesAinvestor
byconsideringboththesizeandpriceofthedilutiveroundoffinancing.Statedanother
way,theformulaallowstheconversionpricetobeadjustedaccordingtotherelative
percentageofownershipthatisbeingsoldatthelowerprice.Therefore,ascanbeseen
inTable2,thedilutiveimpactoncommonshareholdersisgreatlyreduced.
Theformulahasseveralformsandwillsometimesincludeforpurposesof
dilutionprotectionthenumberofstockoptionsoutstanding.Whenoptionsaretaken
into
accounttheprotectionissaidtobe“broadbased”andwhentheyareexcludeditissaidto
be“narrowbased.”Anexampleofaweightedaverageformulaisasfollows:
Price-BasedAnti-DilutionProtectionTerms
Investor-Favorable
Middle-of-the-Road
Entrepreneur-Favorable
Fullratchet
Weightedaverage,Pay-to-playprovision
None(structuralantidilution
protectiononly)
NonPrice-BasedAnti-DilutionProtectionTerms
Unqualifiedrightoffirstrefusaloncompanyissueorshareholdersales
Rightterminateson
qualifiedpublicoffering
(“QPO”)5
Mustholdminimum
numberofpreferredshares
(e.g.,15%)inorderto
exerciserightoffirstrefusal
oncompanyissues
RightterminatesonQPO
(e.g.,25%)inorderto
Rightterminatesoninitial
publicoffering(“IPO”)
Aqualifiedpublicoffering(or“QPO”)isgenerallydefinedasaninitialpublicofferingwhich
(1)is
firmlyunderwritten,
(2)mustraiseaspecificamountofmoneyand(3)willbeatacertainminimumprice
(e.g.,threetimestheconversionpriceofthepreferredstock).
LiquidationPreference
Thebasicideabehindtheliquidationpreferenceisthattheholderofpreferred
shares,uponaliquidation,dissolution,orsaleofthecompany,mustbepaidsome
stipulatedamountpriortothedistributionofanyproceedstothecommonshareholders.
Liquidationisusuallydefinedtoincludeaconsolidationormergerinwhichthe
company’sshareholderswillholdlessthanamajorityofthesurvivingentity’ssharesora
saleofsubstantiallyallofthecompany’sassets.Aconventionalliquidationpreferenceis
considereda“single-dip”preference.Withaconventionalliquidationpreference,the
preferredstockholdermustchoosebetweenreceivingtheliquidationpreferenceor
convertingtocommonstockinordertoshareproratainthetotalproceeds.Forexample,
consideraSeriesAinvestmentofpreferredshares,representing50%ofthecompany,
soldtoinvestorsforatotalof$3million.Thepreferredshareshavealiquidation
preferenceequaltotheoriginalpricepaidforthoseshares,or$3million.Sometime
thereafterthecompanyisliquidatedfor$5million.Havingachoicebetweenreceiving
$3millionor50%of$5million,theSeriesAinvestorschoosetheformerandthe
commonshareholdersreceivetheremaining$2million.
Onecanseefromthisexamplethatthepreferredshareholdersreceivevalu
- 配套讲稿:
如PPT文件的首页显示word图标,表示该PPT已包含配套word讲稿。双击word图标可打开word文档。
- 特殊限制:
部分文档作品中含有的国旗、国徽等图片,仅作为作品整体效果示例展示,禁止商用。设计者仅对作品中独创性部分享有著作权。
- 关 键 词:
- Term Sheet Definitions PE条款清单 PE 条款 清单