Founders Flash: What Happens When You Sell Your Startup?

In this fourth and final installment of a series called A Startup Takes Flight, Jason Rowley looks at a made-up company — the Internet of Wings, a provider of drone-delivered chicken sandwiches that’s since pivoted into general food delivery — to examine “exit” options for startups.  

Through the series, Jason covered a range of issues startups may face through its financial lifecycle including: the basics of SAFE notes and how they convert to equity with terms like discounts and valuation caps; how VC investors use pro rata terms to maintain their proportional ownership in a startup; and what happens when growth markers aren’t hit, and how anti-dilution protections come into play when a company raises a down round.

Read on to learn what happens when your startup embarks on a liquidity event.

 
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