Comment by libertymcateer | Hacker News Reader

Comment by libertymcateer | Hacker News Reader

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@sama's terms are fairly equitable. I am a corporate lawyer with a substantial practice in startups and software (I also code in node, and used to work in LAMP and ANSI C way back in the day). I do a fair number of startup investment rounds.

These are reasonable terms. They don't bend over backwards for the company, they are not a land-grab by the investor. Are there 50 other ways from Sunday to also have equitable terms? Yes - every deal is different, which is why you need a lawyer, and depending on the context, different terms can be equitable. In general, though, this is pretty "content-neutral."

Note: I am not your lawyer. If you need a lawyer - get a lawyer. But yes, my handle is my actual name (so you can look me up to see that I am not just an armchair IANAL). As far as I know, I am the only lawyer named Liberty around.

> As far as I know, I am the only lawyer named Liberty around.

I love this.

> MegaButts

I love this.

I'm pretty into this.

And about this you cannot lie, even though you're a lawyer.

So is @abalone correct in thinking its just the multiple in Snap's case that made the situation onerous then?

What multiple? I honestly haven't seen it. What I did see was this, however:

> Those terms gave Lightspeed the right of first refusal to invest in a future round of funding and the ability to increase its share of the company in that round. Lightspeed could also take 50 percent of the future round.

That is the issue and that would make a target less desirable for VC investment.

By multiple, do you mean the voting leverage? Because note that this happened after Lightspeed invested and allowed the VC to invest, rather than blocking it. To be very clear: the 10:1 voting ratio was decidedly not what blocked outside VC. The ROFR blocked outside VC. The 10:1 founder voting ratio was the solution.

Typically, "multiple" in this context means a liquidation preference - if one existed here, it was not detailed in the NYTimes article. My bet is you could probably find this information in the S1, (located here: https://www.sec.gov/Archives/edgar/data/1564408/000119312517... ) but if you want me to read that, you will have to pay my hourly.

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