Note: I would like to thank Cody Gaynor at Wilson Sonsini for his valuable insights on this topic. Any entrepreneur looking for a smart and numerate lawyer would do well to consider Cody.

One of the more interesting analytical exercises that comes up time and time again whenever a company that has raised institutional capital explores a sale is how the sale proceeds will be distributed to the various stakeholders. Depending on the what the returns look like for each party, it may influence whether a particular exit path is feasible or not. It is a good idea for all stakeholders (management, senior security investors, junior security investors, etc.) to have such a model handy when discussing strategic options. 

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