A Striking Explanation of VC Mechanics — Wrap-up

There are many articles out there explaining the mechanics of investment rounds. However, there are a range of founders who are still not confident enough about such VC and investment mechanics.

That’s why Iskender Dirik (MD at Microsoft Startup Growth Partners and Venture Partner at EQT Ventures), Christopher Mohrmann (Investment Associate at Bauer Venture Partners) and Peter Möllmann (Partner at Schnittker Möllmann Partners) decided to create a very striking, visual explanation of the most important mechanics via infographics. 
The set comprises 5 infographics:

1. Basic Calculations in Financing Rounds

The very basic calculations of investment rounds, considering pre- and post-money valuations, stake and number of issued shares, share prices, etc.

🡲 Click to see the “Basic Calculations in Financing Rounds” infographic

2. Liquidation Preferences

The mechanics of a (1) 1x non-participating and (2) 1x participating liquidation preference

🡲 Click to see the (1) “Non-Participating Liquidation Preference” infographic
🡲 Click to see the (2) “Participating Liquidation Preference” infographic

3. Anti-Dilution

The explanation of a Downround Protection

🡲 Click to see the “Anti-Dilution” infographic


The illustration of ESOP-mechanics

🡲 Click to see the “ESOP” infographic