Venture Deals · glossary
A rule that a preference holder who does not buy its share of a new round loses its preference. Under Solaris’s article 7.5, Rowan Hill’s Series A shares became ordinary shares just before the Series B. Clause 18 · Chapter 13
Explained in Chapter 13, The Down Round: Anti-Dilution and Pay-to-Play, of Venture Deals.
Money also leaves the stack when shares leave a class. Under pay-to-play (article 7.5), a Series A holder that does not buy its share of the next round loses its preference. Rowan Hill did not take up its share of the Series B, so its 200 Series A shares became ordinary shares. The money it had paid for them left the stack, which is why article 5.4 gives the class €2,600,000.Read Chapter 9, Preference Shares and the Stack →
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