Given this week’s headlines, many emerging companies may be asking themselves: “Why am I holding so much cash?” The Investment Company Act of 1940 (the 1940 Act) may be to blame. “But I don’t have any intention of being an investment company. Aren’t those mutual funds or…
In the three days since federal authorities announced sweeping measures to protect depositors of Silicon Valley Bank (SVB) and Signature Bank and help prevent additional bank failures (as discussed in our update of March 12, 2023), the U.S. banking system appears to have stabilized, at least temporarily.…
In response to recent client questions regarding the various considerations and options for holding short-term funds, we have prepared a reference chart comparing certain key characteristics of demand deposits with government securities, money market funds, and other short-term cash management instruments. Please note that this information is…
At 6:15 p.m. ET on March 12, 2023, the Department of the Treasury, Federal Reserve, and FDIC announced “actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all…
Below is an overview of the failure of Silicon Valley Bank (SVB) and what we expect to happen next. This reflects information as of 4:00 p.m. PT on March 11, 2023. We note that it is an evolving situation; we will provide updates as warranted in the…
Every startup will eventually have contracts with third-party vendors and suppliers to provide goods and services to the company. Taking proactive steps to ensure that the insurance requirements in your vendor contracts accurately reflect the needs of your company is vital to avoid complicated insurance issues and…
Businesses face several considerations when onboarding founders or employees who reside in foreign countries. These issues also apply to U.S.-based founders and employees who move to a foreign jurisdiction and work remotely.
As the summer quickly approaches, it’s the time of year that many employers consider hiring an intern for the summer. Start-up companies may view this as an opportunity to hire students as “cheap” or “free” labor. Unfortunately, there are a lot of misconceptions about unpaid interns. The…
U.S. Citizenship and Immigration Services (USCIS) is proposing to grant work authorization to foreign entrepreneurs who raise substantial capital for companies they start. USCIS estimates some 3,000 foreign entrepreneurs may qualify annually. USCIS expects this new proposal to create jobs, facilitate research and development and increase innovation…
Many entrepreneurs have a good understanding of statutory limitations and regulatory constraints on the operations of the businesses they are starting. That understanding often comes as a result of familiarity gained from years of experience operating in an industry. Other entrepreneurs may be newer to an industry,…
