Re:Silicon Valley's best kept secret: Founder liquidity
by Finbarr on Wednesday June 12, 2024 @09:51AM
(#40658159)
Yes, as I mentioned it only applies when you have 10 sellers.
Re:Silicon Valley's best kept secret: Founder liquidity
by throwaway-blaze on Wednesday June 12, 2024 @11:41AM
(#40659364)
Founders never have preferred shares, at least not the same class of preferred (with the same preferences) as investors.
Re:Silicon Valley's best kept secret: Founder liquidity
by janjongboom on Wednesday June 12, 2024 @12:00PM
(#40659594)
Not never. E.g. all the capital we as founders put in the business before we raised our seed round was converted into Series Seed Preferred shares at the same rights as angels / seed VC. Small portion of total equity but still.
In our case, we offered all vested employees the option of selling in the same round on the same terms.
I personally don’t recall any disclosure requirements at 10 people; however, we didn’t have that many participate so perhaps it didn’t apply.
In general, Founders Preferred does layer on the preference stack but also hopefully by a relatively trivial amount to the overall funding size.