Participating Preferred Explained
This post from Brad Feld identifies "participating preferred as a maligned and typically hotly negotiated issue in many venture capital investments."
The article explains from a broad perspective "the notion of participating preferred, how it works, and its financial and emotional impact on a deal."
The post points out the complications that can arise in subsequent financing rounds and how features and variations such as the "cap on the participate" (also known as a "kick-out feature.") come into play.
