Recent Blog Posts
What Smart Angel Investors Think About Before Writing a Check
Writing a check to a startup you believe in is exciting. It’s also one of the riskiest investments you can make. Whether you’re an angel deciding where to invest or a founder pitching one, it helps to know how good angels think. It starts with why. Some angels want to pay it forward by… Read More »
Succession Planning When You Sell Your Startup
Most startup founders want their company to end in an acquisition. IPOs are rare, expensive, and slow. A sale to a larger company or a financial buyer gives founders and early investors liquidity, and it gives the business access to the buyer’s sales channels, distribution, and resources. But closing isn’t the finish line. A… Read More »
What Is an Investor Rights Agreement?
You’ve closed your Series A. Alongside the stock purchase agreement, the amended and restated charter, a co-sale agreement and voting agreement, you signed what’s called an investor rights agreement (IRA). That document governs what your investors are entitled to from the company for years to come, so it pays to understand it before you… Read More »
Thinking About Selling Your Startup? Get Deal Counsel Involved Earlier Than You Think
A buyer calls. They like your product, your team, and your numbers, and they want to talk about acquiring your company. That call is not the time to start getting ready. By the time a buyer is at the table, your cap table, IP assignments, and customer contracts are already baked, and the buyer’s… Read More »
What is the Difference Between a Statutory Conversion and a Statutory Merger?
Is your startup currently structured as a partnership, a limited liability company (LLC), or even a sole proprietorship? Depending on your goals for your startup and your plans for funding and raising capital, one of these structures may work perfectly well for your business. However, many entrepreneurs initially found a startup and structured the… Read More »
Why Investors Prefer to Invest in C Corporations
If you are in the early stages of founding a new startup, it is important to discuss your entity structure with a startup attorney in relation to your plans for raising capital. In the very early stages of a startup, it may be the case that you do not yet have specific plans for… Read More »
Board Seat, Board Observer, or Information Rights?
Are you considering investing in a new startup? Whether you are a potential investor or a startup founder trying to think like an investor, it is essential to understand the most common ways in which investors obtain information about the company they are investing in and how they can have and exercise governance rights…. Read More »
The SAFE Through the Lens of an Investor
When a startup raises capital by offering simple agreements for future equity (SAFEs) to investors, what do investors need to know? If you are considering investing in a startup through a SAFE, what do the cap discount and post-money mechanics mean for your ownership? Why do stacked SAFEs dilute earlier holders? And what should… Read More »
How Much Diligence Does a Seed Check Deserve?
Are you considering investing in a tech startup or another type of startup? When you are considering an investment at the seed stage, you need a clear understanding of how much due diligence you should be doing, and how much due diligence is simply too much at this stage. At a point, due diligence… Read More »
The LOI Is Where Sellers Have the Most Leverage. Most Waste It.
For many startup founders, the goal is to sell to a larger corporation and to make a significant amount in doing so. In large part, these are mid-market transactions, and it is crucial for startup founders to understand how, at this stage, the letter of intent (LOI) can protect your sale. Indeed, the LOI… Read More »