How to Track a Deemed Liquidation Event After the Charter

How to track a deemed liquidation event is a trigger ledger on the signed certificate of incorporation, not the liquidation-preference math. For each issuer, log the Deemed Liquidation Event (DLE) definition copied, the opt-out vote (Requisite Holders percentage and the 10-day written notice), the event type if one is pending or closed (merger path or asset-sale path), whether the Requisite Holders elected otherwise, the effective date if any, and the DLE Redemption Date clocks if the paper uses the asset-sale redemption path. Raziel's liquidation preference tracking page is the Liquidation Amount. Raziel's earnout tracking page is contingent purchase-price cash after close. This page is whether the transaction is a DLE at all.

This is not legal, tax, or investment advice. Raziel does not provide it. Copy the signed charter. Do not invent a majority-vote default.

What this DLE ledger is (and is not)

The National Venture Capital Association (NVCA) Model Certificate of Incorporation (Updated October 2025, Word file fetched from NVCA) puts Deemed Liquidation Events in Section 2.3. The Model COI is a starting point. It is not legal advice for particular facts. Section 2.3.1: each of the following events shall be considered a Deemed Liquidation Event unless the holders of at least [specify percentage] of the outstanding shares of Preferred Stock, voting together as a single class on an as-converted to Common Stock basis (the "Requisite Holders"), elect otherwise by written notice sent to the Corporation at least 10 days prior to the effective date of any such event. Baker Donelson (on the January/April 2024 NVCA revisions that the October 2025 file still carries) notes that the as-converted class vote takes anti-dilution adjustments into account, and that statutory conversion, transfer, domestication, or continuance were added because those events can have the same effect on preferred stockholders as a merger. A liquidation-preference worksheet is not this row. Do not book the dollars here.

Six columns on one deemed-liquidation-event row

Open one row per issuer. A later restated charter is the same row with a new PDF. If a DLE is pending, attach the merger or asset-sale agreement.

• DLE definition copied. NVCA Section 2.3.1 has two paths. Path (a): a merger, consolidation, statutory conversion, transfer of the Corporation, domestication, or continuance in which the Corporation is a constituent party, or a subsidiary is a constituent party and the Corporation issues shares pursuant to that transaction, except a deal in which the pre-deal capital stock continues to represent (or is converted into) [a majority[, by voting power,]] of the surviving or parent equity. Path (b): (i) the sale, lease, transfer, exclusive license, or other disposition, in a single transaction or series of related transactions, of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole, or (ii) a disposition of one or more subsidiaries that hold substantially all of those assets, except a transfer to a wholly owned subsidiary. An optional sentence says a bona fide Preferred Stock equity financing is not, in and of itself, a DLE. Copy the signed list. Store silent if a path was struck.

• Opt-out vote copied. Requisite Holders percentage, as-converted single class, and the 10-day written notice to the Corporation. [specify percentage] is a fill-in. Copy the signed cut. The Model COI protective provisions also bar the Corporation from effecting a DLE without the written consent or affirmative vote of the Requisite Holders. That consent is a different cell from the 10-day "elect otherwise" notice. Log both if both appear.

• Event type (if any). Merger path or asset-sale / exclusive-license path, using the paper's labels. If nothing is pending, store none. A rumored process is not an event type.

• Requisite Holders elected otherwise (yes / no / none). Yes only if the 10-day written notice actually went to the Corporation. None if no DLE is pending.

• Effective date if any. The effective date of the event, or missing if the deal has not closed. The 10-day opt-out notice is measured against that date.

• DLE Redemption Date clocks (asset-sale path). Optional NVCA Section 2.3.2(b), for a DLE under 2.3.1(a)(ii) or 2.3.1(b) if the Corporation does not dissolve under the DGCL within 90 days: written notice to each Preferred holder no later than the 90th day; if Requisite Holders request redemption in a written instrument not later than 120 days after the DLE, the Corporation uses Available Proceeds on the 150th day after the DLE (the "DLE Redemption Date") to redeem Preferred at the applicable Liquidation Amount. If the deal documents contain contingent indemnification obligations that prohibit distributing Available Proceeds, the DLE Redemption Date automatically extends to ten business days after that prohibition expires. Baker Donelson described the 150th-day DLE Redemption Date and that extension on the 2024 form. Copy your clocks. Store silent if the optional paragraph was deleted.

Copy the signed definition, not a sale-equals-DLE shortcut

Do not paste "any sale is a DLE." The October 2025 NVCA Word file (fetched from NVCA) is optional clauses in brackets, including the majority-by-voting-power exception and the bona fide financing carve-out. Section 2.3.2(a) also says the Corporation shall not have the power to effect a 2.3.1(a)(i) DLE unless the Transaction Document allocates consideration under Sections 2.1 and 2.2 (the preference math). That allocation belongs on the liquidation-preference row. Escrow and contingent consideration in Section 2.3.4 are Initial Consideration versus Additional Consideration, with a bracketed choice for holdbacks. Those dollars sit with earnout or escrow tracking. This row is the trigger.

When the ledger holds

The row holds if the six cells are copied from the PDF (or marked missing). It fails when you invent a majority-vote statutory opt-out, treat a bona fide equity financing as a DLE because a blog said so, or book Liquidation Amount dollars on this row. Raziel's startup investment tracker is the book those charters should sit on: documents, dates, cap tables, IRR and MOIC. Raziel does not interpret your Certificate of Incorporation. Copy the six columns.