Liquidation Preference

A liquidation preference is a right that one class of stockholders may have to be paid ahead of other class(es) of stockholders in the case of a liquidation of the company.

Preferred Stock

Preferred Stock (like Common Stock) is a security that represents ownership in a corporation. In addition to the ownership interest, Preferred Stock has rights that Common Stock does not.

Drag-along Rights

Drag-along rights enable majority shareholders to “drag along” minority shareholder shares in an acquisition.

Common Stock

Units of equity ownership in a corporation entitling their holder to a share of the corporation’s success through dividends and/or capital appreciation.

Understanding an M&A Term Sheet Blog Post

Congratulations! You just received an offer to acquire your company.  A serious buyer will present you with a term sheet that covers the basic terms of the transaction.  Do not…

Choosing the Correct Business Entity: The Basics Blog Post

This article briefly introduces each of the principal business forms in the United States, namely corporations, partnerships, LLCs and sole proprietorships. More detailed considerations and strategies in making an appropriate…

Understanding The Valuation Cap Blog Post

You’re a founder who wants to get things moving, but you need some funds. You’ve heard of some of the virtues of SAFEs and convertible notes, including eliminating the need…

Primer on Convertible Debt Blog Post

Convertible debt is a structure with debt-like features, and converts into the issuer’s equity in certain circumstances. Our forms of Series Seed debt documents are available on Cooley GO Docs…