In this second of a two part AlphaTakes video series, Matt Storms discusses the second half of the Series A Preferred Stock term sheet for an emerging technology company, using the Series A term sheet published by the National Venture Capital Association.
Here are the key takeaways from this video:
- The three most common alternatives to anti-dilution provisions:
- Weighted average
- Full ratchet
- No anti-dilution provisions
- Several provisions are not typically heavily negotiated in Series A financings:
- Pay to play requirements
- Attorneys’ Fees
- Registration rights
- Participation rights
- Drag-along rights
- No shop requirements
- Keep an eye on the big picture