Concept-of-the-week
Liquidation preferences
You sign a term sheet. $10M Series A at a $40M pre-money. Looks clean: 1x liquidation preference, non-participating. Standard stuff.
Here's what's easy to miss. Most waterfalls pay the latest round first. If your Seed investors hold $2M in preference below Series A, a $12M exit means Series A takes $10M off the top, Seed recovers the remaining $2M, and founders get $0.
The multiple matters less than you'd think. What matters more is whether the preference is participating or non-participating. A participating investor gets their money back and shares in the remaining upside — sometimes called 'double dipping.' A non-participating investor picks one or the other. In mid-range exits, 1x participating can return more than 2x non-participating.
Before you countersign, model three scenarios: a down exit, a modest exit near your valuation, and a clean upside. The headline number is rarely where the real negotiation lives.
What we’re watching
Anthropic’s tender offer
Source: Anthropic
Anthropic closed a secondary tender offer this week, and investors came up short. They had lined to $6 billion to buy employee shares at a $350 billion valuation, the same price as the Series G. Employees sold some, but not nearly enough to fill that demand.
The backdrop matters. Annualized revenue run rate hit $19B in March and cleared $30B by early April. Whether that pace sustains or reflects lumpy enterprise contract timing, employees watching the trajectory had reason to think their equity was cheap at the offer price.
For founders planning a tender offer, this is a real design question. Participation is voluntary. When employees have high conviction or an IPO on the horizon, they'll price their equity above what the offer implies. If that gap is wide enough, the offer undersubscribes.
What matters: pricing parity (Anthropic set the tender at the Series G, no discount), the offer window, and how you communicate it. At parity with a near-term IPO in view, holding is rational for many employees.
The investor demand that couldn't clear this week doesn't disappear — it's likely to resurface at the offering.
Sources: Bloomberg
This week’s highlights
Firmus raises $505M at $5.5B valuation ahead of ASX IPO, backed by Coatue and Nvidia (Source)
Hermeus raises $350M ($200M equity, $150M debt) at $1B valuation to build unmanned hypersonic aircraft (Source)
Sarvam AI nears $300–350M raise at $1.5–1.55B valuation, led by Bessemer with Nvidia and Amazon participating (Source)
Syneron Bio raises $150M Series B to advance AI-driven macrocyclic peptide drug discovery platform (Source)
Sidewinder Therapeutics raises $137M Series B, co-led by Frazier Life Sciences and Novartis Ventures, to advance next-generation bispecific ADCs (Source)
See you next week,
Team EquityList
