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What information asymmetry? Liquidation preferences are perfectly fair, and not at all a mystery. Especially in the year 2019 when there has been an enormous am
by harryh 7y ago
What information asymmetry? Liquidation preferences are perfectly fair, and not at all a mystery. Especially in the year 2019 when there has been an enormous amount written about them on the internet.
- deogeo 7y agoThe parasites writing these contracts are counting on people not taking the time to become experts in shady startup contracts. As evidenced by this article, it's working.
- harryh 7y agoThe contracts in question aren't shady in the majority of cases. Again, liquidation preferences are perfectly fair.
- ElKrist 7y agoHonest question here: as an employee (non-founder) do you have a say in liquidation preferences of future rounds of investment?
- harryh 7y agoIt depends on whether your role in the company means that you are part of negotiating the deal. If you are the CEO: then probably yes. If you're an IC engineer: then probably not. Relatedly, most of these deal terms are pretty standardized. In the vast majority of cases there aren't a lot of negotiations around liquidation preferences, only negotiations around valuations. The exceptions to the rule tend to happen for very large or late stage fundraises.
- randyrand 7y agoWhen I was awarded options I was not given any paperwork other than the grant and basic info about it. How is anyone to know what documents have been written without a database of the relevant documents? It’s bullshit to keep relevant paperwork a secret.