• Ensure rolled-over equity is common equity without voting rights, and outside equity raised is prefeed equity with voting rights. Preferred equity gets (at least) 1x liquidation preference, so they get their money back first in the event of a sale
• Communicate to seller what you plan to do with biz so they know what to expect as an equity holder (sell in 5 years? Hold for dividends?)
• Use in cases where seller can add significant value post-close (complex transitions, expertise in expansion and or other value-add initiatives where seller can be crucial for execution)

Conclusion

• So there you have it, 3 of the most common forms of deal structuring
• Always remember to consult with your deal lawyer/CPA to ensure everything is done correctly
• Hope this helps, structuring is just another tool to your deal toolkit


What are some non-vanilla creative deal structures you've used or heard about?

Love it how Microsoft is getting AI injected in all their products. Smart.

Skype now has an AI assist as well.

Bye bye, birdie. We barely knew ye.

It’s a day of mixed emotions for Twitter users, as Elon Musk officially rebranded the company to X last night. The new X logo replaced the bird logo on the app, and was also displayed on the walls of the company HQ

🤔 Why you shouldn’t work with me or my agency?

Over the past decade, we've learned a valuable lesson: 
 
Tegra (or any other performance marketing agency) is not a fit for most brands.
 
That's because our services are built to accelerate brands with high unrealized growth potential.
 
But what, exactly, is “unrealized growth potential”?
 
We use 10 key metrics to answer that question objectively. Here are a few examples:

• Are the brand’s variable costs (COGS + Shipping + Tax) 30% or less of revenue?
• Are their operating costs 25% or less of revenue?
• How much time passes between purchasing inventory and selling it?
• Do their customers’ value grow 30% or more over 60 days?
• Is their average first-order revenue greater than zero after variable costs and acquisition costs have been subtracted?

As an agency, we can’t control many of these metrics. But they are key indicators that a partnership will be successful.
 
And when those key indicators are in alignment, we can create magic together.
 
If your brand is doing $1m-$50m in annual ecommerce revenue, and your key metrics clear our benchmarks - we want to work with you.

Send me a message to hop in a call and apply @iamgalba