* . *
  • About
  • Advertise
  • Privacy & Policy
  • Contact
Wednesday, May 28, 2025
Earth-News
  • Home
  • Business
  • Entertainment
    First look: Disney shows star villains, Little Mermaid, tech – Yahoo

    Unveiling Disney’s Dark Side: A Sneak Peek at Iconic Villains, The Little Mermaid, and Cutting-Edge Technology!

    Fans Call Out Disney For Cutting Favorite ‘Lilo & Stitch’ Character: ‘It Makes Me Want to Cry’ – Yahoo

    Disney Fans Heartbroken Over the Cut of Beloved ‘Lilo & Stitch’ Character: ‘It Makes Me Want to Cry

    Oh My Girl’s sister group USPEER from WM Entertainment introduces individual members with high-energy clips for ‘Speed Zone’ debut – allkpop

    Get Ready to Meet USPEER: Oh My Girl’s Sister Group Unveils Dynamic Members in ‘Speed Zone’ Debut Clips!

    Ways to save money on entertainment and travel this summer – CBS News

    Smart Strategies to Slash Your Summer Entertainment and Travel Costs!

    ‘Devil Wears Prada 2’ Sparks Debate Over Miranda Priestly’s Fate – Yahoo

    Will Miranda Priestly Rise Again? The Controversy Surrounding ‘Devil Wears Prada 2

    CT Senate backs panel to support struggling live entertainment venues – WSHU

    CT Senate Approves New Initiative to Aid Struggling Live Entertainment Venues

  • General
  • Health
  • News

    Cracking the Code: Why China’s Economic Challenges Aren’t Shaking Markets, Unlike America’s” – Bloomberg

    Trump’s Narrow Window to Spread the Truth About Harris

    Trump’s Narrow Window to Spread the Truth About Harris

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Trending Tags

    • Trump Inauguration
    • United Stated
    • White House
    • Market Stories
    • Election Results
  • Science
  • Sports
  • Technology
    Arqit acquires Ampliphae’s technology IP, enhancing its global encryption portfolio – GlobeNewswire

    Arqit Boosts Global Encryption Portfolio with Strategic Acquisition of Ampliphae’s Technology IP

    Searenergy partners with Tethys Robotics on subsea inspection technology – Windtech International

    Searenergy partners with Tethys Robotics on subsea inspection technology – Windtech International

    China successfully tests new-gen satellite-to-ground data transmission technology – Global Times

    China successfully tests new-gen satellite-to-ground data transmission technology – Global Times

    Wireless Connectivity Technology Market Set to Witness – openPR.com

    Exploring the Future: Wireless Connectivity Technology Market Poised for Remarkable Growth!

    AI can do a better job of persuading people than we do – MIT Technology Review

    Why AI Outshines Us in the Art of Persuasion

    Cold Spray Technology: Parts Production Faster, Cheaper. – Marine News Magazine

    Revolutionizing Manufacturing: How Cold Spray Technology is Transforming Parts Production for Speed and Savings

    Trending Tags

    • Nintendo Switch
    • CES 2017
    • Playstation 4 Pro
    • Mark Zuckerberg
No Result
View All Result
  • Home
  • Business
  • Entertainment
    First look: Disney shows star villains, Little Mermaid, tech – Yahoo

    Unveiling Disney’s Dark Side: A Sneak Peek at Iconic Villains, The Little Mermaid, and Cutting-Edge Technology!

    Fans Call Out Disney For Cutting Favorite ‘Lilo & Stitch’ Character: ‘It Makes Me Want to Cry’ – Yahoo

    Disney Fans Heartbroken Over the Cut of Beloved ‘Lilo & Stitch’ Character: ‘It Makes Me Want to Cry

    Oh My Girl’s sister group USPEER from WM Entertainment introduces individual members with high-energy clips for ‘Speed Zone’ debut – allkpop

    Get Ready to Meet USPEER: Oh My Girl’s Sister Group Unveils Dynamic Members in ‘Speed Zone’ Debut Clips!

    Ways to save money on entertainment and travel this summer – CBS News

    Smart Strategies to Slash Your Summer Entertainment and Travel Costs!

    ‘Devil Wears Prada 2’ Sparks Debate Over Miranda Priestly’s Fate – Yahoo

    Will Miranda Priestly Rise Again? The Controversy Surrounding ‘Devil Wears Prada 2

    CT Senate backs panel to support struggling live entertainment venues – WSHU

    CT Senate Approves New Initiative to Aid Struggling Live Entertainment Venues

  • General
  • Health
  • News

    Cracking the Code: Why China’s Economic Challenges Aren’t Shaking Markets, Unlike America’s” – Bloomberg

    Trump’s Narrow Window to Spread the Truth About Harris

    Trump’s Narrow Window to Spread the Truth About Harris

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Trending Tags

    • Trump Inauguration
    • United Stated
    • White House
    • Market Stories
    • Election Results
  • Science
  • Sports
  • Technology
    Arqit acquires Ampliphae’s technology IP, enhancing its global encryption portfolio – GlobeNewswire

    Arqit Boosts Global Encryption Portfolio with Strategic Acquisition of Ampliphae’s Technology IP

    Searenergy partners with Tethys Robotics on subsea inspection technology – Windtech International

    Searenergy partners with Tethys Robotics on subsea inspection technology – Windtech International

    China successfully tests new-gen satellite-to-ground data transmission technology – Global Times

    China successfully tests new-gen satellite-to-ground data transmission technology – Global Times

    Wireless Connectivity Technology Market Set to Witness – openPR.com

    Exploring the Future: Wireless Connectivity Technology Market Poised for Remarkable Growth!

    AI can do a better job of persuading people than we do – MIT Technology Review

    Why AI Outshines Us in the Art of Persuasion

    Cold Spray Technology: Parts Production Faster, Cheaper. – Marine News Magazine

    Revolutionizing Manufacturing: How Cold Spray Technology is Transforming Parts Production for Speed and Savings

    Trending Tags

    • Nintendo Switch
    • CES 2017
    • Playstation 4 Pro
    • Mark Zuckerberg
No Result
View All Result
Earth-News
No Result
View All Result
Home Technology

Sell for half a billion and get nothing (2021)

March 5, 2024
in Technology
Sell for half a billion and get nothing (2021)
Share on FacebookShare on Twitter

In July 2018, Paddy Power Betfair (now known as Flutter) acquired FanDuel for $465M in cash. On the surface, this looks like a great win for the FanDuel founders and employees. However, because the two lead investors held strong liquidation preference rights, the FanDuel founders and most employees received nothing in this massive deal.

What is Liquidation Preference?

Liquidation preference is one of the most important terms in a term sheet. Liquidation preference determines who gets paid first and how much they get paid when there’s an acquisition.

Because they take on significant risks, investors expect to get “VIP” head-of-line privileges to be paid upon a liquidation event such as an acquisition. Employees wait in line and collect proceeds only after all of the preferred investors take their share.

What Are Liquidation Preference Terms?

There are two components to liquidation preference. The first is the preference multiple, which basically says the investor gets a certain multiple of their investment amount. If the investor invested $5M and got a 2x preference, they would get paid $10M before the common shareholders got paid anything. For founders, obviously a 1x multiple is better than a 3x multiple.

The second component of liquidation preference is participation, which determines whether the investor can take additional proceeds after the preference multiple is paid out. Capped or full participation rights would allow the investor to “double dip” in their payout.

The simplified 3×3 matrix below provides a simplified view of how liquidation preference works. Healthy startups can get terms more in the lower left corner. Marginal startups may find funding, but liquidation preference terms will likely trend towards the upper right corner.

How Liquidation Preference Hurt FanDuel Founders

When the FanDuel founders raised funds, two key investors received a liquidation preference that entitled them to the first $559M in an acquisition. Founders and employees would be paid only if the acquisition exceeded $559M. Because the Paddy Power Betfair was for just $465M, the founders received nothing.

To help founders visualize how liquidation preference could affect their startup, we have a liquidation preference scenario calculator available in our free members area.

 

Why Founders Couldn’t Stop the Deal

But wait. If this was such a horrible deal for the founders, why did they do the deal? The reality was the founders couldn’t stop the deal because they also granted the same two lead investors drag along rights. This drag along right forced the other shareholders to accept the decisions made by these two investors. Imagine how the founders felt when they received the notice below that the drag along right was being exercised and they could do nothing to stop getting short-changed.

Lessons Learned: Build a Very Fundable Startup

Every founder should learn from this disastrous scenario the importance of building a very healthy, fundable startup. A healthy, vibrant startup draws more investors during fundraising. The competition gives founders the leverage to negotiate for more founder-friendly terms. Healthy startups get better valuations, better terms, and raise funds with much less effort.

Building a healthy startup requires great execution. Great execution involves doing dozens of tasks and processes the right way. Learn how to execute well with our premium startup training. If you are new to our startup training, we recommend starting by watching the 7 Keys to Triple Your Startup Payout, located in our Basic Tier.

For more detail on liquidation preferences, refer to chapter 11 in our book. Good luck building your own healthy, fundable startup!

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : Hacker News – https://www.fundablestartups.com/blog/half-a-billion

Tags: billiontechnology
Previous Post

B/R AM: What Players Really Think

Next Post

A moment of financial clarification (2013)

Public health and civil rights organizations ask RFK Jr. to reconsider health agency layoffs – Reuters

Public Health and Civil Rights Groups Urge RFK Jr. to Reevaluate Health Agency Layoffs

May 28, 2025
Identity politics | Definition, Examples, & Facts – Britannica

Understanding Identity Politics: Key Concepts, Real-World Examples, and Insights

May 28, 2025
Arqit acquires Ampliphae’s technology IP, enhancing its global encryption portfolio – GlobeNewswire

Arqit Boosts Global Encryption Portfolio with Strategic Acquisition of Ampliphae’s Technology IP

May 28, 2025
Trump threatens to slash federal funding from California over youth transgender sports participation – Politico

Trump’s Bold Warning: Federal Funding at Risk for California Over Transgender Sports Participation

May 27, 2025
The Dialectics of Ecology and Ecological Civilization – Monthly Review

The Dialectics of Ecology and Ecological Civilization – Monthly Review

May 27, 2025
National Medal Of Science Winner John Dabiri To Present Free Lecture June 2 On How Jellyfish Can Solve Real-World Problems – Los Alamos Reporter

Unlocking Nature’s Secrets: Join John Dabiri for a Free Lecture on How Jellyfish Can Inspire Real-World Solutions!

May 27, 2025
Trump Has Cut Science Funding to Its Lowest Level in Decades – The New York Times

Trump’s Cuts Leave Science Funding at Historic Lows

May 27, 2025
Object 1 Launches New Lifestyle Project – RLI – Retail & Leisure International

Object 1 Unveils Exciting New Lifestyle Project!

May 27, 2025
Google DeepMind CEO ‘warns’ students getting into college: The world you are entering will … – Times of India

Google DeepMind CEO Issues a Stark Warning to Incoming College Students: Prepare for an Uncertain Future!

May 27, 2025
Port City Air impact on Seacoast economy projected to be $1.5 billion over next decade – Seacoastonline.com

Port City Air Set to Boost Seacoast Economy by $1.5 Billion in the Next Decade!

May 27, 2025

Categories

Archives

May 2025
MTWTFSS
 1234
567891011
12131415161718
19202122232425
262728293031 
« Apr    
Earth-News.info

The Earth News is an independent English-language daily published Website from all around the World News

Browse by Category

  • Business (20,132)
  • Ecology (644)
  • Economy (657)
  • Entertainment (21,565)
  • General (15,243)
  • Health (9,700)
  • Lifestyle (661)
  • News (22,149)
  • People (659)
  • Politics (666)
  • Science (15,880)
  • Sports (21,165)
  • Technology (15,646)
  • World (646)

Recent News

Public health and civil rights organizations ask RFK Jr. to reconsider health agency layoffs – Reuters

Public Health and Civil Rights Groups Urge RFK Jr. to Reevaluate Health Agency Layoffs

May 28, 2025
Identity politics | Definition, Examples, & Facts – Britannica

Understanding Identity Politics: Key Concepts, Real-World Examples, and Insights

May 28, 2025
  • About
  • Advertise
  • Privacy & Policy
  • Contact

© 2023 earth-news.info

No Result
View All Result

© 2023 earth-news.info

No Result
View All Result

© 2023 earth-news.info

Go to mobile version