A 2X participating preferred term blocked Serena & Lily from raising capital
Lily Kanter · Serena & Lily: Serena Dugan and Lily Kanter. They Built a $20M Brand—Then One Investor Almost Destroyed It · Aug 3, 2026 · at 56:31
Lily Kanter, co-founder of Serena & Lily, describes how an existing venture firm structured a buyout for a litigious investor with terms that prevented future fundraising.
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“One of our other major investor on Sandhill Road came up with the capital. They actually put the money into the company on top of our cap stack, on top of the capital chart, At a very heavy duty preference of a two X preferred participating, very gnarly security for anyone who knows how all of that works, and got them bought out, but made it nearly impossible, actually impossible, to raise additional money for the company.”
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