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can you explain a bit about how preferred shares wipe out employee options? thats only in the scenario the company exits for far fewer than its current valuatio
by Xyik 10y ago
can you explain a bit about how preferred shares wipe out employee options? thats only in the scenario the company exits for far fewer than its current valuation?
- jzl 10y agoGoogle "preferred participating". Not all preferred offerings are participating but some are. Also, define "current". What matters the most is its valuation at exit relative to its valuation in the final few funding rounds.
- svachalek 10y ago1. Usually debts are paid off first, then preferred shareholders get their money back, before regular shareholders get a chance to sell. I got a 1099 for $0.00 one year thanks to this! 2. When new shares are issued, usually preferred shareholders get shares for free to maintain their percentage in the company. Other existing shareholders do not, of course.