4.104 Venture Terms: Economics

This course covers the fundamental economic terms in venture capital financings. What is preferred stock and why is it used? What are the fundamental economic terms of a deal, including the pre-money valuation and the raise? Who bears dilution from convertible notes and options? What is liquidation preference and the difference between non-participating, participating, and capped participating preferred? What are some “forced economic” terms in deals that companies should avoid? What terms do investors require in order to maintain their ownership in down rounds and future financings, including pro rata rights and anti-dilution? COURSE RELEASED NOVEMBER 9, 2020

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