The venture capital world has been buzzing lately regarding a new form of a venture fund (see: https://techcrunch.com/2020/08/05/gumroad-founder-sahil-lavingia-launches-new-seed-fund-in-collaboration-with-angellist). Angel List recently coined the term “Rolling Fund,” a catchy name. At its core, though, the concept of these new types of funds is pretty simple. Rolling Funds are Subscription Funds Rolling Funds can also be calledContinue reading “Rolling Funds (aka Subscription Funds) – What They Are and Why Venture Capital Should Care”
Category Archives: Uncategorized
How to Read Convertible Promissory Notes
Legal documents can range from the moderately annoying to the insufferably pedantic. Convertible promissory notes are no exception but are so commonplace, you are going to need at least a basic understanding of how they work. With that in mind, I created a list of common key terms in convertible notes and what they mean.Continue reading “How to Read Convertible Promissory Notes”
Privacy Law – Where do I begin?!?!
Privacy law, where do I begin? You’ve got customer names. You’ve got user addresses. Your analytics are starting to pile up. But, you haven’t even started to figure out how to process, store, and maintain this data. More than that, you don’t know what your responsibilities are to the people you’ve collected data from. It’sContinue reading “Privacy Law – Where do I begin?!?!”
Why It Is So Difficult to Take Investment From Non-Accredited Investors
By: James Graves The Significance of Accredited Investors vs. Non-Accredited Investors The unfortunate reality of United States securities law is that your company cannot take investment money from just anyone. One of the most important distinctions in the world of fundraising and securities law is “accredited” versus “non-accredited” investors. An “accredited investor” is generally anContinue reading “Why It Is So Difficult to Take Investment From Non-Accredited Investors”
Raising Equity Capital for Your Startup: Securities Law Exemptions Ranked by Ease of Use
Raising equity capital for a startup properly can be challenging, but it is the first step before starting a successful business. Read below more information. Introduction If you are raising money capital from investors for your startup, no matter how you do it, there are rules you must be careful to follow. If you doContinue reading “Raising Equity Capital for Your Startup: Securities Law Exemptions Ranked by Ease of Use”
Be Careful Who You Issue Stock Options To Under Rule 701
Intro to Rule 701 Any time a company grants stock options or compensatory equity awards of any kind, the company must comply with the registration requirements of federal and applicable state securities laws or find an applicable exemption from the registration requirements. If you are a startup, the securities law exemption you will probably relyContinue reading “Be Careful Who You Issue Stock Options To Under Rule 701”
Public Policy: Remove Taxes on Sharing Stock With Workers
Our federal tax system, the public policy, makes it unnecessarily difficult for private companies to share stock with their employees, contractors, advisors, and other service providers. The problem lies in our tax law. The Problem with Issuing Shares to Workers Why doesn’t your employer bonus your shares? Because the IRS treats any share bonus asContinue reading “Public Policy: Remove Taxes on Sharing Stock With Workers”
How to Use and Review Non-Disclosure Agreements (NDAs)
We are frequently asked by clients to review Non-Disclosure Agreements (“NDAs”) in various contexts. It goes without saying that you should be careful of what kind of NDA you sign and not be afraid to negotiate any terms you do not like. Nondisclosure or confidentiality agreements come in a wide variety of forms and styles,Continue reading “How to Use and Review Non-Disclosure Agreements (NDAs)”
More Notes, More Problems: Musing on Convertible Notes and SAFEs
Convertible notes, SAFEs, and every other type of convertible equity instrument are to startup financings what bread is to a sandwich, or Ringo is to the Beatles—not the most exciting part, but they’re almost always there, and you’re kinda stuck with them. In our experience, most early-stage companies use some form of convertible instrument forContinue reading “More Notes, More Problems: Musing on Convertible Notes and SAFEs”
Do Not Try to Self-Administer Your Stock Option Plan
When you set up your company, you hopefully set up a stock option plan (also known as an equity inventive plan) at the same time so that you have a plan that is properly adopted and ready to be used when you are about to grant options or other equity incentives to service providers. WhenContinue reading “Do Not Try to Self-Administer Your Stock Option Plan”