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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The Anatomy of a Unicorn – part 1

Everyone is aware of the dramatic growth and success attributed to companies such as Uber and Snapchat. However, not everyone may be aware of the structures used by those companies that allow for such development and progress. We did the heavy lifting for you and compared certificates of incorporation of five leading unicorns: Facebook, prior to its IPO, Palantir, Snapchat, Uber, and AirBnB. Our findings have revealed that key to the anatomy of the unicorns lay in similar founder preferences and down road economic protections for the companies’ investors. We will briefly discuss these founder and investor preferences, as found in the certificates of incorporation. Founder Preferences A unicorn tends to have a founder-friendly anatomy. This is accomplished by giving founders…

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