Convertible Note Issue - VC demanding 2x liquidation preference

I publish illustrative scenarios prepared by my practice. All participants and conversations are fictional. The fictional posts are not posts by real users, accounts of client experiences, or reports of actual results.

Illustrative scenario prepared by my practice.

For informational purposes only. This is not legal advice. Laws vary by jurisdiction. Consult a qualified attorney for advice specific to your situation.

Hypothetical question

I've been trying to resolve this on my own but I'm stuck.

VC demanding 2x liquidation preference. I've been dealing with this for about 16 weeks now and the situation isn't improving.

I have already tried to resolve this directly but the other party is not cooperating.

Has anyone been through something similar? What worked for you?

Illustrative response

Make sure your operating agreement covers this scenario. Many template ones don't.

Convertible Note Issue - VC demanding 2x liquidation preference

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