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Beware the trappings of liquidation preference

A reader asks:: I’m the co-founder and CEO of an e-commerce startup, and I’ve been meeting with different VC firms regarding an initial round of funding. I’ve started doing some reading on term sheets and the issues we will need to address and I’m a little confused with some of the VC terminology. Could you please explain to me what a liquidation preference is and how we should negotiate it?

Scott Edward Walker

(Editor’s note: Scott Edward Walker is the founder and CEO of Walker Corporate Law Group, PLLC, a law firm specializing in the representation of entrepreneurs. He submitted this column to VentureBeat.)

Full Story: http://entrepreneur.venturebeat.com/2010/08/16/beware-the-trappings-of-liquidation-preference/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Venturebeat+%28VentureBeat%29

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