Level 2: Series A
Bigger loot, bigger boss fight.
Your studio is shipping. Reviews are good. A gaming-focused VC offers $75M at a $175M pre-money, post-money $250M.
The term sheet includes a 1x non-participating Liquidation Preference. If the studio sells, they get their $75M back FIRST, then everyone shares the rest pro-rata.
1x non-participating is the founder-friendly default. Watch for participating preferred or multipliers (2x, 3x) - those are the boss-fight clauses.
A 1x non-participating liquidation preference means…
- Non-participating (standard)
Investor picks EITHER their money back OR their pro rata share - not both.
- Participating
Investor takes money back FIRST and then also their pro rata share of what remains. Double dip.
- Multiplier (2x, 3x)
Investor takes 2–3× their investment back before anyone else gets anything.