Beware of "participating preferred" liquidation preferences - investors get their money back PLUS share in remaining proceeds. This significantly reduces founder upside in modest exits, which can reinforce wealth gaps. #TermSheets #EquityStructure #EconomicJustice
Negotiating Investment Terms as a Founder: The Art of Protecting Your Vision
The capital you raise is only one piece of the startup puzzle.
tinyurl.com
April 11, 2025 at 3:30 PM
Beware of "participating preferred" liquidation preferences - investors get their money back PLUS share in remaining proceeds. This significantly reduces founder upside in modest exits, which can reinforce wealth gaps. #TermSheets #EquityStructure #EconomicJustice