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Startup Company Lawyer

Last Build Date: Mon, 22 Feb 2016 06:27:41 +0000


What is convertible equity (or a convertible security)?

Fri, 31 Aug 2012 17:13:53 +0000

Quick answer: convertible equity (or a convertible security) is convertible debt without the repayment feature at maturity or interest. Background Over the past few years, convertible debt has emerged as a quick and inexpensive method for startup companies to raise money from angel investors and early stage venture funds.  Paul Graham sparked some commentary by […]

Is crowdfunding legal?

Sat, 26 May 2012 07:06:56 +0000

Below is an article that I wrote for Business Law Today, a publication for the American Bar Association’s Business Law Section. Crowdfunding: Its Practical Effect May Be Unclear Until SEC Rulemaking is Complete President Obama signed the Jumpstart Our Business Startups Act (known as the JOBS Act) into law on April 5, 2012. One highly […]

What are the terms of Yuri Milner/SV Angel’s Start Fund $150K investment into Y Combinator companies?

Mon, 31 Jan 2011 23:22:38 +0000

On January 28, 2011, Yuri Milner and SV Angel announced that their Start Fund would offer all Y Combinator companies $150K in convertible debt.  Reactions are mixed, from “no big deal,” to “disrupting angel investing” to “you’d be crazy not to take this deal” to “facilitating a bubble” to “strategic perfection.”  TechCrunch reports that within […]

Is convertible debt with a price cap really the best financing structure?

Sun, 09 Jan 2011 08:13:30 +0000

It’s been a while since I’ve written a substantive post.  (I started writing this post in September 2010, but only got around to finishing it.) Convertible debt with a price cap seems to be the preferred structure for early-stage financings Over the last 12 months, I’ve noticed a trend where early-stage startup companies raise seed […]

Can a California company have unpaid interns?

Thu, 15 Apr 2010 22:07:59 +0000

(The following is from a WSGR client alert.) On April 7, 2010, the California Division of Labor Standards Enforcement (DLSE) issued an opinion letter addressing the requirements employers must meet in order to have unpaid interns in compliance with California law. Although widely published news reports, including a recent New York Times article analyzing the […]

How do the sample Series Seed financing documents differ from typical Series A financing documents?

Mon, 15 Mar 2010 06:18:19 +0000

After the recent announcement of the Series Seed Financing documents by Marc Andreesen, Brad Feld points out that there are now four sets of “open source” equity seed financing documents: TechStars Model Seed Funding Documents (by Cooley) Y Combinator Series AA Equity Financing Documents (by WSGR) Founders Institute Plain Preferred Term Sheet (by WSGR – disclaimer, I […]

What is an employee retention or M&A carveout plan?

Mon, 22 Feb 2010 04:30:48 +0000

I was speaking at an event last month to a group of CEOs and was surprised by the number of CEOs that were worried about the value of their common stock in a M&A transaction.  Due to aggregate liquidation preferences that may exceed the acquisition price in an M&A deal, common stock may be rendered worthless.  For […]

What is a convertible bridge note with a price cap?

Mon, 11 Jan 2010 08:11:14 +0000

I seem to be doing a lot of pre-Series A convertible bridge note financings these days. As I have written previously, I think that convertible notes with even large conversion price discounts (e.g. 50%) or warrant coverage are typically more company-favorable than a Series A financing where a valuation is set.  After completing a lot […]

How do you find federal and state government funding opportunities for clean tech and other companies?

Wed, 23 Dec 2009 05:44:05 +0000

[I know it’s been a long time since I posted anything, but I was recently accused of having a dead or dying blog and felt compelled to post something.] Wilson Sonsini Goodrich & Rosati provides a powerful online tool that provides clean technology entrepreneurs and companies with a searchable, easy-to-use source for federal and state […]

When do I need to incorporate a company?

Tue, 21 Jul 2009 06:53:26 +0000

[It’s been awhile since I wrote anything.  I am giving a presentation to some of the founders in TheFunded Founder Institute on incorporating their companies, so I thought I would recycle some thoughts.] Founders of startup companies often wait to incorporate a company until they are confident that their concept is viable or fundable.  At […]