VC - Chapter 4

Question after the introductory video of term sheets:

How can you describe a term sheet best? (Rough descrption sufficient)

Talking about different levels of information between VC and founder:

What are some of the usual questions for both sides which are due to the information asymmetry between the two?

New institutional Economics:

There are 4 aspects describing the NIE and 4 basic underlying assumptions, list them up!

Principal-Agent-Theory:

What are three significant reasons for the Theory?

Principal-Agent-Theory:

What measures can both sides take to work against the negativ effects of the P-A-Theory before the deal between VC and founder?

Principal-Agent-Theory:

What measures can both sides take to work against the negativ effects of the P-A-Theory after the deal between VC and founder ?

What are the four different types of stock?

List them up and explain the rights coming with the different types!

coming to the topic of stocks:

The Valuation of the company is driven by the stocks . What are the 4 key aspects to bear in mind so that every party is “on the same page”?

Informational Slide:

The Capitalization Table!

What is vesting?

Explain via dynamic between company and employee!

Why vesting:

What are two reasons from a theory perspective?

What is a liquidation preference ?

Explain via the two split parts!

Theoretical perspective:

Why do VCs want a liquidation preference?

Informational slide:

A simplified Modell of a liquidation preference:

Theoretical Perspektive:

Who does anti-dilution protect and what from?

What are the reasons?

Anti-dilution:

Two scenarios to differentiate and the effects for the VC?

What are the methods to fight the effects?

Informational slide:

Simplified Modell of a diluted VC by a second VC round in two scenarios:

Economic terms of a term sheet

Control terms of a term sheet