The market for initial public offerings continues to heat up. Once your company has selected the managing underwriters for the offering and wants to begin the IPO process in earnest, an organizational meeting with management, the underwriters, counsel and possibly the auditors will be scheduled.
In a prior Founder Tip of the Week we discussed how the Internal Revenue Code (the “Tax Code”) characterizes unvested founder stock as not being purchased until it has vested, and that this characterization can have adverse tax consequences for the founder because the Tax Code treats as taxable income the excess, if any, of the fair market value of stock at the time it vests over the purchase price of the stock (the “spread”).
Founders and executives of mature private companies often underestimate the complexity and lead time of the initial public offering process. The right timing is crucial for a successful IPO so it is critical to be ready to go when the company’s results and capital market windows align.
On September 23, 2013, the Securities and Exchange Commission (SEC) rules permitting general solicitation and advertising of private securities offerings pursuant to the Jumpstart Our Business Startups Act of 2012 (JOBS Act) went into effect.
Perkins Coie’s startupPerColator is kicking off a series to help founders contemplating an initial public offering, or an “IPO,” prepare for this extensive and often complex milestone in the life of their company. An IPO, is the result of a great deal of effort, coordination of resources and resolution of myriad legal and business issues. Below are a few tips on how to start preparing your company today.
Coming up with the right valuation for your company in the beginning can be very tricky. Simply put, valuation is the value of your company. In the early stages of formation the value of your company is most likely close to zero.
Check out our first installment of Founder to Founder Tips featuring “Wise Advice” from TechCrunch Disrupt NY Battlefield company founders.
A new Delaware law, signed on July 17 by Gov. Jack Markell, allows companies to be formed as public benefit corporations (PBCs), which balance stockholders’ returns, the impact on other people affected by a company's business activities, and the creation of an overall public benefit. Starting on August 1, Delaware companies will be able to form or reincorporate as PBCs, or merge with PBCs.
Founders are often reminded, “great companies are bought, not sold” - emphasizing the importance of focusing on the business rather than the exit plan. True enough, but founders can help themselves through an early understanding the levers for buyers in their industry. Knowing that can help entrepreneurs position their companies for a successful sale - and it may also cause them to focus their startup in a different way.
On July 10, the SEC adopted final rules pursuant to Title II of the Jumpstart Our Business Startups Act of 2012 (JOBS Act) that lift the long-standing ban on general solicitation and advertising for private securities offerings under Rule 506 and Rule 144A.