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Include a Capitalization Table in the Term Sheet

Whether a financing, merger or other acquisition, or other major transaction, parties often outline the major provisions in a non-binding term sheet or letter of intent. A principal benefit of this approach it to help the parties identify major areas of disagreement early to avoid wasted expense on additional diligence and drafting of the definitive agreements.

Three Steps to Limit Liability and Avoid Veil Piercing

A corporation is a separate entity with its own liabilities for which the individual owners cannot be held personally liable. It is a concept that is old as dirt and right as rain, right? Surely everyone accepts this basic premise of doing business as a corporate entity? Well, perhaps everyone but the plaintiff’s attorney seeking to hold someone with deep pockets financially responsible for his client’s injuries.

Term Sheet Basics – Dilution

Dilution is a term that is frequently discussed in the context of preferred stock financings. However, it is important to understand that there is a difference between dilution in the general sense and the type of dilution with respect to which preferred stockholders receive protection.

Common Startup Struggles

Running a successful and profitable company can be an incredibly trying experience that takes dedication, hard work, and sacrifice. If you are thinking of pursuing a venture you are passionate about, it helps to know what challenges you may encounter.

Term Sheet Basics – Pre-money Valuation

“Pre-money” or “pre-money valuation” is a term that entrepreneurs will hear and use a lot in the context of securing equity financing, so I thought it would be a good idea to make sure entrepreneurs have a clear understanding of it.

Delaware Considers “Public Benefit Corporation” Legislation

To meet growing demand from entrepreneurs and investors to empower entities to sustain a triple bottom line, state legislatures across the nation have been creating new corporate forms that give businesses legal protection to address social and environmental problems. Delaware, however, declined to consider whether to adopt such a corporate structure…until now.

Crowdfunding for Life Sciences Companies

I recently participated in a panel discussion on crowdfunding for biosciences, and I wanted to share some of the ideas we discussed. Although focused on life sciences companies, many of the issues are applicable to tech companies too.