Re:Uber Founder Travis Kalanick Resigns as C.E.O.
by nradov on Wednesday June 21, 2017 @03:23AM
(#14601618)
I think you mean a big haircut for the later stage investors. Even if Uber has a down round, the earliest investors will probably still have positive returns (at least on paper).
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Re:Uber Founder Travis Kalanick Resigns as C.E.O.
by JumpCrisscross on Wednesday June 21, 2017 @06:45AM
(#14602577)
> Even if Uber has a down round, the earliest investors will probably still have positive returns
No, they could be crammed out by later investors' liquidation preferences. Depends on how down the down is.
Re:Uber Founder Travis Kalanick Resigns as C.E.O.
by hobbyjogger on Wednesday June 21, 2017 @01:39PM
(#14606069)
You are confusing a down round with a small exit event (here and in other places in this thread). Liquidation preferences don't come into effect until a sale of the company - so no one is "crammed out" by them in a down round.
Though these two types of events are obviously correlated (a down round makes a smaller exit more likely) they are not the same and should not be confused. A financing at a valuation that is a billion dollars less than the last round would be a down round, but a sale of the company at that same valuation would still far exceed the liquidation overhang.