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Strategies & Market Trends : The New Economy and its Winners

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To: Glenn Petersen who wrote (57331)	6/7/2015 8:02:20 PM
From: Elroy	Read Replies (1) of 57684

The protections, known among investors as structuring or ratcheting, can inflate a unicorn’s indicated valuation 10 percent to 25 percent, according to Rick Kline, a lawyer at Goodwin Procter That doesn't make any sense. The protections are undesirable for future investors, so they should lower a stock's valuation, not increase it. I don't see any problem with giving early stage investors protections against an IPO below their price. As long as it is all disclosed, it will be factored into the IPO price. It should hurt the valuation. The argument that it would help valuation makes little sense - it's good for the investor and bad for the company, why would that improve the valuation?

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