The Anatomy of a Unicorn – part 2

Previously, we discussed the main ways of handling founder and investor preferences when structuring a company, as seen in some of the world’s leading unicorns. For your convenience, we have put together a table comparing the key similarities and differences in various provisions of the COIs of Uber, Facebook prior to its IPO, Snapchat, AirBnB and Palantir.   Uber Facebook Snapchat AirBnB Palantir Two Classes of Common Stock for Founders Yes Yes Yes Yes Yes Liquidation preference Non-participating preferred Non-participating preferred Non-participating preferred (for Series A, A-1, B, C) Non-participating preferred Non-participating preferred Multiple in liquidation preference 1.25x for Series C-2 and C-3 Preferred 1x 1x 1x 1x Investor relations in liquidation preference Pro rata Pro rata Pro rata Pro…

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Board of Directors and Legal Duties

If you just joined as a new member of the board of directors of a startup, or you are VC that hops from board to board you should know your legal duties as a director. We usually try not bore you with arcane legal concepts from the common law and Delaware corporate law, but you must familiarize yourself with the term fiduciary and fiduciary duties. Under Delaware law each director is a fiduciary and has fiduciary duties to shareholders and the company. In practice this means that as fiduciary, a director must not put his personal interest before the interst of the company and the shareholders. In the real world you only care about your own wealth maximization, however, when…

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