Further demystifying the VC term sheet. (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.) A reader asks: I am following-up on your post last week, Demystifying the language of VC term sheets. My co-founder and I also have a term sheet question. We don’t understand what a price-based antidilution adjustment is and what it’s meant to address. The exact language under that section in our term sheet reads as follows: “Subject to standard and customary exceptions, the conversion ratio for Preferred Stock shall be adjusted on a broad weighted average basis in the event of an issuance below the Preferred Stock price, as adjusted.”
For example, assume that XYZ Inc. raises $2 million in a Series A round at an $8 million pre-money valuation, and the VC receives 2 million shares of preferred stock at $1 per share; the conversion ratio is 1 (1 divided by 1). Full Ratchet. Social Gaming Roundup: Viximo, Funding, SGN, & More. Viximo Reaches New Milestones & Gains New Partners — Social games platform Viximo has reached a new milestone recently, announcing that it has expanded its audience reach to over 100 million. In addition to this, the company has announced two new social network partners, MyYearbook and CafeMom. Game Developers Raise $1.05 Billion in 2010 — According to data compiled by VentureBeat, game companies in 2010 have raised 58% more funding in 2010 for a grand total of approximately $1.05 billion, including Zynga ($150M), Playdom ($33M), Ngmoco ($25M), Booyah ($20M), and a couple dozen more.
SGN Gains 600,000 Users on iPhone — Social mobile developer, SGN is reporting a new milestone for its social iPhone title, MiniTycoon Casino. The free-to-play game is said to be boasting around 600,000 users who have banked near 300 billion chips and sent over 400,000 virtual gifts. Linden Lab Gets A New CEO — Second Life creator, Linden Lab is getting a new CEO this week in the form of Rod Humble. Someone Is Trading Stocks Based on Your Tweets: Tech News « The Year In Online Video Deals And What To Expect In 2011. Editor’s note: Guest author Ashkan Karbasfrooshan is the founder and CEO of video site WatchMojo. In this post he examines looks back at the online video deals of 2010 and what deals could happen in 2011.
You can find his previous guest posts about online video here. With the recent rumor that Google’s YouTube unit was looking at acquiring video content company Next New Networks, it’s clear that anything can happen in the rapidly growing online video space. While some are shocked to see that Google may cross over and own content, the rumor does sound plausible: The combination would allow YouTube to fold in Next New Networks and use it as a talent management platform, basically, and give the video aggregation site the ability to create videos if need be. Loaded with nearly $25M in venture financing, it’s not quite the initial public offering that some of their investors were hoping for, but let’s face it, an exit to Google is nothing to be ashamed of. Conversely: Vertical Integration. John Doerr and Mary Meeker Speak about their New Partnership. Venture capital mega-firm Kleiner Perkins Caufield & Byers has announced that Mary Meeker is joining the firm as a partner, in another sign that the firm is focusing more on this mobile-meets-social-meets-local-meets-global wave of Web disruption.
“Our number one goal is to help the Mark Pincuses of the world build their businesses into Internet treasures, and there has been no greater finder of Internet treasures than Mary Meeker,” said KP’s John Doerr in an early morning call with TechCrunch, just after Meeker broke the news to Morgan Stanley’s technology and Internet practice– a force on Wall Street where she’s made her name over the last 20 years.
In the dot com glory days, Mary Meeker was as famous as an analyst as Doerr was as a VC, so it’s appropriate and seemingly a long time coming that the two would wind up as partners. Meeker said she’d thought about making the change “from the skybox to coaching down on the field,” as Doerr described it, for years. Ask a VC: “We Probably Would Have Been the Last Guys to Do a Round in Twitter” (TCTV)