Stockholders’ Rights of Venture Investors After Moelis
This blog explores the tension between Delaware corporate law’s board management principle and investor demands for control, highlighting legal challenges and potential legislative changes to the Delaware General Corporation Law after the Moelis decision.
What Is A Search Fund & Why Should You Start One?
Starting a search fund offers a direct path to leading a profitable business. This blog covers the history, mechanics, and life cycle of a search fund, as well as the characteristics of companies targeted by search funds.
Comparing the Conversion Mechanics of Safes and Convertible Notes
This blog focuses on understanding the conversion mechanics of Safes versus Convertible Notes, which is essential for founders navigating pre-seed financing, as they differ in their treatment of shares outstanding and impact the equity distribution among stakeholders.
Venture in the Middle: Bridge Rounds in a Down Funding Environment
Venture financings are at a two-year low, which is predictable given the current state of the economy. But startups need capital even during downtimes, so bridge rounds tend to increase. Here are a few tips for navigating bridge rounds in a down funding environment.
Understanding Authorized, Issued and Reserved Shares
In this blog we explore the difference between a corporation’s authorized, issued and reserved shares and some corporate governance considerations to keep in mind as shares, options, and warrants are being issued to founders, service providers, and investors.
Comparing Convertible Instruments
In this blog, we explain the key similarities and differences between convertible notes and post-money Safes so you can understand the nuances between convertible instruments before you get to the negotiation table.
Why the Venture Capital Operating Company Exemption Matters (and how a Management Rights Letter helps)
If a venture capital fund plans to take money from an employee benefit fund and does not want to be subject to ERISA, it is imperative to always obtain a management rights letter that provides opportunities to exercise control and actually exercise those rights during the annual valuation period.
The Unintended Consequences of Too Many New Venture Funds
Venture capital activity is hotter than ever, which has led to more available capital and fueled the growth of many exciting companies. From 2020 to 2021, the aggregate deal value of VC investments in the U.S. increased from $167B to […]
Let’s All Use Lego® Bricks.
Venture financing rounds need to be constructed so that they can stack neatly on top of each other. Angel on top of Friends & Family, Series Seed on top of Angel, Series A on top of Series Seed, Series B on top of Series A, and so on.
The Changing Landscape of Private Fund Investing
Ten years ago, private fund terms were relatively standard. That is no longer the case. Not only have things changed greatly from what we saw a decade ago; but now, there is considerable variety between private funds.