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What is the right way to ask about liquidation preferences? Asking about “shares outstanding” or “fully diluted shares” does not seem sufficient.
by divbzero 5y ago
What is the right way to ask about liquidation preferences? Asking about “shares outstanding” or “fully diluted shares” does not seem sufficient.
- lizknope 5y agoI don't think there is. I replied to someone else in this thread with a similar question. I got very awkward responses from our management and it was clear they wanted to avoid all questions about where possible investments would come from and how much that would dilute the company. I didn't even know about liquidation preferences until I left that company. It is definitely something I would ask about before I ever joined another startup.
- divbzero 5y agoI understand the hesitation to predict future funding or dilution, but would hope to get straight answers about liquidation preferences in the current cap table. The startups I’ve received offers from were very upfront when I asked about shares outstanding and also willing to give order of magnitude estimates of where they were in terms of growth. I never thought to probe further about cap table and liquidation preferences. It turned out that the startup I’ve worked at the longest did have a sane cap table thanks to the founders finding good investors, but I didn’t learn those details until long after I joined.