Articles in Venture Capital

SHOULD YOU CONSIDER A PHANTOM EQUITY PLAN?

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Whether you’re a brand-new startup or a veteran of several funding rounds, every emerging growth CEO wants to find the right path to incentivizing employees while conserving capital. One creative approach that might be right for you is a phantom equity plan. Phantom Equity – what is it? Phantom equity is essentially a cash bonus plan that is designed to Read More

SAFEs 101 for Investors

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What is a SAFE? SAFE stands for “simple agreement for future equity,” and was created by Y Combinator in 2013 as an alternative to investing via convertible notes. SAFEs are neither equity nor debt – they represent a contractual right to future equity, in exchange for which the holder of the SAFE contributes capital to the company. Like convertible notes, Read More

During Startup Week, Let’s Take Tech Valley to Next Level

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Twenty years ago, the Capital Region was branded as Tech Valley—and in many ways, we have lived up to the name. Our region is home to tech-based start-ups and growing companies, accelerators and incubators that spur innovation and commercialization, and universities that prepare their students with the skills they need to stay ahead of the pace of change. There’s plenty Read More

Should Investors and Founders Take Cues from Hollywood?

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Investors have long been directing their funding to companies with a social conscience and lead investors in most early-stage companies will ask for board representation during term sheet negotiations. Hollywood’s much talked about “inclusion rider,” most recently promoted in Frances McDormand’s Oscar acceptance speech, could be a new tool in the kit for both investors and founders raising capital alike. Read More

The Top Five Considerations for Startups

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Starting a new business can be both exciting and challenging.  Protecting your business from day one can set you up for success and help you avoid costly litigation down the road.  To help set you on the path to success, here are the top five items that every startup should consider: 1. Forming The Legal Entity That Best Fits Your Read More

Financing Your Startup with Security: Securities Law Basics

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If your company plans to raise money by selling stock or convertible notes (also known as “securities”), then your company must comply with federal and state securities laws. If not, the company and its promoters could become subject to adverse legal consequences. You don’t need to become an expert, but you do need to understand that selling securities is a Read More

2017 VC Deals: A sampling of the year’s venture capital transactions

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In 2017 MBBP once again represented its clients in a range of venture capital transactions, including convertible note financings, equity investments, and sales of preferred stock. Our VC attorneys counseled companies in an array of industries, including biotechnology, custom clothing, and medical devices, among others. You will find a sampling of these transactions here. Read More

First Time Funds: The fundraising environment is strong; the fundraising process is hard

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Raising capital for a first time private equity fund is difficult.  First time fund managers often are surprised by how long it takes to secure enough capital commitments to hold a fund’s initial closing, particularly when seeking commitments from institutional investors. The good news is that first time funds have recently been in favor with investors.  First time fund managers Read More

HOW YOUR COMPANY’S VALUATION CAN BE IMPACTED BY CONVERTIBLE NOTES

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With valuations in venture capital financings at historically high levels, companies are finding that “valuation caps” and other related terms in convertible notes and other convertible instruments are having a significant effect on company capitalization. For example, if entrepreneurs and investors do not consider the effects of outstanding convertible notes when negotiating the terms of an equity financing, there can Read More

5 Critical Mistakes to Avoid in Any M&A Deal

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Having worked on hundreds of merger and acquisition deals over the last few decades, I’ve found two things to be true: 1) Each deal is unique in its own way; 2) There are a few mistakes CEOs often make that complicate deals and harm their own self-interest. Allow me to outline five actions CEOs approaching a merger, acquisition, sale or Read More