Venture Unlocked: The playbook for venture capital managers cover image

Mitchell Green of Lead Edge Capital on the Moneyball approach to investing, the art of effective cold calling, and managing 700+ strategic LPs

Venture Unlocked: The playbook for venture capital managers

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Navigating Preferred Stock and IPOs in Late Stage Investments

Late stage investors in companies that go public might face challenges as preferred stocks convert to common stocks, potentially leading to down rounds in the public markets. Early stage investors with substantial preferences could be disadvantaged by this conversion, while common shareholders benefit. Some companies may struggle to go public fast enough, which could impact their late stage investors. The absence of IPO rat, ratchets, or thresholds in deals may further complicate matters for late stage investors. Taking companies public without proper preparation could potentially harm late stage investors, as some early stage venture investors may lack sophistication in navigating the capital markets.

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