The Information

Honest Co. co-founder Jessica Alba. Photo by Bloomberg.

Private Tech Database

Honest Company’s Investor ‘Ratchets’

By Alfred Lee · Feb 9, 2016 7:02am PST

The Honest Company is reportedly preparing for an initial public offering in the face of a tumultuous public market. But even if the IPO struggles, many of the retailer’s investors would be cushioned against losses. That’s because they have so-called “ratchet” protections that grant them more shares to make up for drops... The Honest Company is reportedly preparing for an initial public offering in the face of a...

Snapchat CEO Evan Spiegel, left, with his co-founder Bobby Murphy. Photo by AP.

Private Tech Database

The Fine Print of Snapchat’s Financing Terms

By Alfred Lee · Dec 22, 2015 7:00am PST · 3 comments

It’s typical for investors in private tech companies to get lots of protections for the risk they take. But the financing of Snapchat has been anything but typical.An analysis of public documents shows that investors have poured more than $1 billion into the messaging company despite receiving virtually no protections, no stockholder votes... It’s typical for investors in private tech companies to get lots of protections for the...

Private Tech Database

What Tech Employees Are Last To Know

By Cory Weinberg and Alfred Lee · Dec 17, 2015 7:01am PST · 2 comments

News broke this week that Hudson Bay was closing in on a deal to buy Gilt Groupe for $250 million, a 75% drop from the $1 billion value put on the company a few years ago. But for common shareholders, such a deal would turn out to be an even bigger loss than that price implies. One common stockholder estimated they would receive roughly $2... News broke this week that Hudson Bay was closing in on a deal to buy Gilt Groupe for $250...

Honest Co. founder Jessica Alba. Photo by Bloomberg.

Investor-Friendly Deal Terms on Upswing

By Reed Albergotti and Alfred Lee · Dec 15, 2015 7:00am PST · 1 comment

Honest Co. founder Jessica Alba. Photo by Bloomberg.

Private Tech Database

Investor-Friendly Deal Terms on Upswing

By Reed Albergotti and Alfred Lee · Dec 15, 2015 7:00am PST · 1 comment

It used to be that the most favorable terms a private tech investor could negotiate, limiting their potential losses or enhancing potential gains, were most commonly struck in late-stage funding rounds. Now, those terms are finding their way into younger startups, according to venture capitalists and lawyers privy to the negotiations.On Monday,... It used to be that the most favorable terms a private tech investor could negotiate, limiting...

Private Tech Database

The Information’s Private Tech Database

By Alfred Lee, Peter Schulz and Myk C. Klemme · Dec 14, 2015 7:00am PST · 9 comments

To understand why investors pump money into private tech firms at apparently ever-rising valuations, you need to know the terms of the investments. These are things like the payouts investors are guaranteed if the company goes public, is acquired or liquidated. Also important: how many votes an investor gets and the dividends they’re... To understand why investors pump money into private tech firms at apparently ever-rising...

Private Tech Database

A Glossary of Private Tech Terminology

By Alfred Lee · Dec 14, 2015 7:00am PST

The private tech financing world has become increasingly complicated, as has the jargon used to describe different terms. Here’s a list of definitions for commonly used terms. Each of the terms shows up in the accompanying chart. The private tech financing world has become increasingly complicated, as has the jargon used to...