Common Unicorn Deal Terms: It’s Not All About Valuation

In this interview with Jeremy Glaser, who is a partner at the law firm Mintz Levin and also serves as Co-Chair of the firm’s Venture Capital & Emerging Companies Practice, we discuss common unicorn deal terms in a financing. It’s not all about valuation.

Jeremy says, “You’re right about the importance of terms versus valuation. The example I love to give people is what’s happened with the unicorns, these companies that had billion-dollar valuations. There was so much focus on having a billion-dollar valuation that, unfortunately, a lot of companies didn’t focus on the terms of those financings. In particular, the term that was most painful, given what’s happened in the public markets, is the anti-dilution protection, or what we call a ratchet.”

Also see, How to Build a Unicorn from Scratch and Walk Away with Nothing.

For more strategic insights on startups, visit questfusion.com.

This is Patrick Henry, CEO of QuestFusion, with The Real Deal…What Matters.

This article originally appeared in QuestFusion.