Startup Funding Espresso - Key Terms

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. There are many terms used in terms sheets but there are only a few that have a significant impact. Here are the key ones: Liquidation Preference -- a liquidation preference gives the shareholder their initial investment back first, before splitting the rest of the proceeds. Non-Participating Preferred -- the investors receive preference over the common shareholders. Anti-Dilution -- investors retain their ownership percentage through subsequent rounds of funding. If they maintain their full ownership, then this is called Full-Ratchet Anti-Dilution. In a Weighted Average Anti-Dilution, the founders get diluted but not as much. Pay to Play -- a pay-to-play clause incentivizes investors to continue investing in subsequent rounds. If not, they lose some portion of their ownership stake. Warrants -- a security that gives the holder the right to buy stock over a certain timeframe and at a specific price. These are key terms to look for in a terms sheet. Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.Let's go startup something today.-----For more episodes from Investor Connect, please visit the site at: http://investorconnect.orgCheck out our other podcasts here: https://investorconnect.org/For Investors check out: https://tencapital.group/investor-landing/ For Startups check out: https://tencapital.group/company-landing/ For eGuides check out: https://tencapital.group/education/ For upcoming Events, check out https://tencapital.group/events/ For Feedback please contact [email protected]