3 ms·
VCs purchase a different class of stock than you have as a founder, called preferred shares. It is standard to require a majority of the preferred shares to aut
by rsweeney21 8y ago
VCs purchase a different class of stock than you have as a founder, called preferred shares. It is standard to require a majority of the preferred shares to authorize a sale of the company.
See this article for a standard, clean series A term sheet. https://blog.ycombinator.com/a-standard-and-clean-series-a-term-sheet/ https://blog.ycombinator.com/a-standard-and-clean-series-a-t...
- CalChris 8y agoApproval of the Preferred Majority required to ... including a Company Sale. However, that is a Series A term sheet. When you turned down YC, wasn't that at the seed stage? You would have still retained control until you converted later. But are you saying that even only accepting a SAFE puts you on an inevitable path?
- rsweeney21 8y agoIf you raise seed funding, the expectation is that you will continue to raise money to fuel your growth. Even if your SAFE or convertible note doesn't have those terms in it, your first priced round will and all previous investors will inherit those rights through their preferred stock.
- CalChris 8y agoExpectation is one thing and Term is another. Is it possible to raise seed funds with the expectation of early profitability? This is very much like your approach but still with a seed investment just without Series A handcuff terms. Google did something like this. They wanted to avoid VC as much as possible and when they did get an A round it was on their terms.