Dragging Me Along Softly.
Like Tim Wolters I'm finding these terms increasingly frequent/intriguing - my favourite is the "drag along" : a term I hadn't heard till XMAS lunch (well it was a bit before xmas lunch / early december, but i wanted to add pseudo-drama) esp after the TechCrunch/Filmloop conversation.
The Tim Wolters VC Snapshot of Interesting Clauses
* pre-money valuation
* option pool size
* liquidation preferences
* dividend
* seniority to previous round
* no shop clause
* redemption
* drag along rights
* anti-dilution
TechCrunch : "The FilmLoop founders made it clear that they thought they had a good chance at success and did not want to sell. However, ComVentures’ ownership percentage, plus certain rights they have (called “drag along rights”), can force the other investors and the company founders to sell."
David Cowan (comments on same TC post) : "Drag along rights do NOT entitle the VC to force a sale of the company. Control of a class of preferred stock does NOT entitle the VC to force a sale of the company. I cannot think of any term I’ve ever seen in a venture capital investment that would explain how a VC could have forced this sale."
The Tim Wolters VC Snapshot of Interesting Clauses
* pre-money valuation
* option pool size
* liquidation preferences
* dividend
* seniority to previous round
* no shop clause
* redemption
* drag along rights
* anti-dilution
TechCrunch : "The FilmLoop founders made it clear that they thought they had a good chance at success and did not want to sell. However, ComVentures’ ownership percentage, plus certain rights they have (called “drag along rights”), can force the other investors and the company founders to sell."
David Cowan (comments on same TC post) : "Drag along rights do NOT entitle the VC to force a sale of the company. Control of a class of preferred stock does NOT entitle the VC to force a sale of the company. I cannot think of any term I’ve ever seen in a venture capital investment that would explain how a VC could have forced this sale."
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posted by redbarren at 6:40 PM
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