The liquidation preference section of the charter describes different investors' places within the capital structure hierarchy. When the company is sold, merged, or shut down (a deemed liquidation event), the proceeds are distributed in order. What is the order?

Investors want key personnel in their portfolio firms to have financial incentives to stay and work hard. How do they do it?

Fill in with - VC, founder. LP: A typical term sheet includes "Transfer restrictions" to prevent ____________ from selling their shares prematurely. VCs also include a buyback right on stocks held by _______.

To balance the cash flow rights of VCs and founders, VCs have ________ when a portfolio company is valued at low valuation, while _________ is (are) imposed to protect founder's cash flow rights when a portfolio company is valued at high valuation.

 

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The order of distribution in a liquidation event as described in the liquidation preference section ... View the full answer