Preferences

Essentials

Investment Thesis & Focus

Investment Structure & Instruments

Liquidity Structure

Non-Participating

Participating

Protective Provisions

Veto on Major Decisions (Sale

Veto on Financial Decisions (New Shares

Information Rights Only

Anti-Dilution Preference

Full Ratchet

Weighted Average

Standard broad-based

Drag-Along Preference

Triggered by Majority Shareholder

Triggered by Investor Majority

Triggered by Board Decision

Tag-Along Preference

Triggered on Founder Share Sale

Triggered on Any Share Transfer

Only on Major Transactions

ROFR / ROFO Preferences

ROFR (Right of First Refusal)

ROFO (Right of First Offer)

No Transfer Restrictions

Pay-to-Play Preferences

Mandatory Participation

Soft Participation

Optional Participation

Risk & Return Expectations

Target Return Multiple

2–3x

3–5x

5–10x

10x+

Exit Timeline

≤ 3 years

3–5 years

5–7 years

7+ years

Capital Allocation Strategy

Early Discovery (very small cheques)

Stepwise Increase (follow-on driven)

One-Shot (large single investment)

Reserve-Focused Strategy

Return Source

Equity appreciation

Revenue share

Secondary exits

Hybrid return strategies

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