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1
Intro
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The Economics of Term Sheets with Scott Kupor Managing Partner, Andreessen Horowitz
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The Alphabet Soup of Term Sheets: Part One (Economics)
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The Alphabet Soup of Term Sheets: Part Two (Governance)
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Pre-money
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x $ invested
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Participating/Non-participating Liquidation Preference
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M invested
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M x 33% = $1.8M
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BBWA = Broad Based Weighted Average Anti-dilution
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Full Ratchet = Price Reset
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Cap Table
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M valuation
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Option Pool = 20%
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M post-money valuation
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$4M vs $2M
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Liquidity Event
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Payoff Matrix
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Participating Preference
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$10M sales price х 33.3% ownership
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M X 33.3% = $5M
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Economic ownership
Description:
Demystify the economics of term sheets in this 22-minute video featuring a16z Managing Partner Scott Kupor. Explore key concepts and terminology used in venture capital term sheets, including pre-money valuation, liquidation preferences, anti-dilution provisions, and cap tables. Gain insights into how different clauses can impact your company's future and learn to interpret their potential consequences. Understand the economic ownership implications of various terms and how they affect payoff scenarios in liquidity events. Equip yourself with essential knowledge to navigate the complexities of VC funding and make informed decisions when negotiating term sheets for your startup.

The Economics of Term Sheets

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