Venture Hacks

How common is accelerated vesting on change in control (AVCoC)? Noam Wasserman from HBS has the answer in Unlocking Your Golden Handcuffs:
“I recently got an email from a serial entrepreneur who has been brought on as the head of finance and operations in a mobile-services start-up. One of his questions was: How often [...]

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Suzanne Dingwall Williams is publishing M&A hacks on her excellent blog, Venture Law Lines. She call the series: ‘Selling the Startup’,
Selling the Startup: Can you sell your subscriber base?
“Recently, a new client received a very favourable takeover offer for her business, including its subscriber base. Problem: the privacy policy did not permit her to provide [...]

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Q: Should I sell my company or raise capital and go for it?
Sell if it dramatically changes the lives of the founders and the early team. Every dollar after your “fuck you money” is icing—get your financial independence first and make the icing at your next company. You can also use an earn-out at the [...]

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“AOL almost sold to Compuserve in 1991 for $60M. The VCs wanted to sell. [Steve] Case won by 1 vote. 10 years later, [AOL was] worth $100 billion.”
– Mark Pincus
Summary: Protective provisions let preferred shareholders veto certain actions, such as selling the company or raising capital. They protect the preferred, who are minority shareholders, from [...]

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Summary: Convert your debt into equity if you can’t pay it on time. Determine your lender’s return if you sell the company early. Reserve the right to raise more debt. Finally, reserve the right to amend the debt agreement.
Previous convertible debt hacks have discussed

The benefits of debt in a seed round
The economics of debt vs. [...]

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Summary: Seed investors often argue that debt doesn’t incent them to (1) help the business and (2) increase the share price of the eventual Series A. Actually, (1) debt does incent investors to help the business and (2) equity may also incent investors to decrease the Series A share price. That said, you can make [...]

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“We talked to a lot of different angel investors and venture capitalists, but no one really ‘got’ what we were doing — that is until we met Google.”
– Dennis Crowley, Founder of Dodgeball, May 2005
“It’s no real secret that Google wasn’t supporting dodgeball the way we expected. The whole experience was incredibly frustrating for us [...]

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