💥Time to Unicorn, Liq Prefs at Seed, PLG vs. Sales-Led, AI Pricing Experiments & More
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Seed Round Liquidation Preferences Stay Standard
Peter Walker’s LinkedIn post analyzes current norms in early-stage venture deals, showing that seed and Series A rounds overwhelmingly use 1× non-participating liquidation preferences. He notes this consistency as evidence that founders shouldn’t fear hidden investor-unfriendly terms at these stages.
1× Non-Participating Remains Standard: Seed and Series A deals almost universally feature 1× non-participating liquidation preferences, with no cumulative dividends, keeping founder and investor interests aligned.
Bridge Rounds Often Have Tougher Terms: Bridge or extension rounds can include higher liquidation preferences, reflecting the higher risk for investors when companies raise unplanned interim capital.
Later-Stage Rounds Diverge: More mature rounds often include investor-friendly terms such as participating preferences or higher multiples, but these are not standard at seed.
✈️ KEY TAKEAWAYS
Early-stage funding rounds maintain simple, founder-aligned terms. Seed deals with preferences above 1× non-participating should be seen as warning signs.