This document provides summaries of key legal structures and investment terms:
- It discusses the most common business entities like sole proprietorships, partnerships, LLCs and corporations, noting that LLCs provide liability protection while corporations are preferable for investors.
- It covers securities regulations for different types of investors from friends/family to accredited investors to qualified investors.
- It also summarizes the main types of intellectual property - copyrights, trademarks, trade secrets and patents - outlining what they cover and their basic terms.
Inside The Mind Of The Venture Capitalist: An Introduction to Venture CapitalJ. Skyler Fernandes
The was the first is a series of presentations by Inside the Mind of The Venture Capitalist, presenting the basic foundations of Venture Capital and what Venture Capitalists look for in companies.
Are you ready to make that leap from bootstrapping to investment capital? If you're ready to accelerate the growth of your startup, check out this presentation from Kristine Di Bacco, Associate with Fenwick and West, LLP (www.fenwick.com) and Sirk Roh, COO for Early Growth Financial Services (www.earlygrowthfinancialservices.com), which covers how to take your startup to the next level of financing -- including an in-depth look at convertible promissory notes and term sheets.
Inside The Mind Of The Venture Capitalist: An Introduction to Venture CapitalJ. Skyler Fernandes
The was the first is a series of presentations by Inside the Mind of The Venture Capitalist, presenting the basic foundations of Venture Capital and what Venture Capitalists look for in companies.
Are you ready to make that leap from bootstrapping to investment capital? If you're ready to accelerate the growth of your startup, check out this presentation from Kristine Di Bacco, Associate with Fenwick and West, LLP (www.fenwick.com) and Sirk Roh, COO for Early Growth Financial Services (www.earlygrowthfinancialservices.com), which covers how to take your startup to the next level of financing -- including an in-depth look at convertible promissory notes and term sheets.
How do you figure out how much money you need, and when? We’ll look at a case study and talk P&L to help you determine the right market for your product and which funding source is most appropriate to maximize the exit for your company.
Startany.com. Remote Acceleration Program.
---------------------------------------------------------------
The Founder’s Guide to Early-Stage Valuation
Presented by Stephen R. Poland, co-founder 1x1 Media.
For many early-stage entrepreneurs assigning a valuation to your startup is one of the more intimidating tasks encountered during the fundraising quest. Based on the popular Founders’ Pocket Guide: Startup Valuation, this webinar provides a quick reference to all of the key topics around early-stage startup valuation and provides step-by- step examples for several valuation methods.
This webinar helps startup founders learn:
What a startup valuation is and when you need to start worrying about it.
Key terms and definitions associated with valuation, such as pre-money, post-money, and dilution.
How investors view the valuation task and what their expectations are for early-stage companies.
How the valuation fits with your target raise amount and resulting founder equity ownership.
How to do the simple math for calculating valuation percentages.
How to estimate your company valuation using several accepted methods.
Stephen R. Poland
Stephen R. Poland has worked with hundreds of startups and entrepreneurs, mentoring them on startup mechanics, funding plans, pitch decks, financial models, and due diligence documentation for the angel funding process.
Steve brings more than 20 years' experience in startups and entrepreneurship to his career. Leveraging leadership roles with the Walt Disney Company, MacMillan Publishing, and Bertelsmann, Steve co-founded startups in the digital music and on-demand media manufacturing sectors, as well an early days anti-virus product.
Along with being co-founder of 1x1 Media, Steve works as a venture growth advisor in Western North Carolina.
Scott droney - financing start-up and growthScott Droney
Scott Droney is provide financial services spectrum as well as data processing and managing segments. Since most of its financial services were retail focused, the need to build scale and skill in the transaction processing domain became imperative.
Entrepreneurs need to put a value on their start-ups in order to raise money, and investors need to put a value on their investments to ensure an adequate return on investment. No negotiating item between entrepreneur and investor creates a wider gulf than this one. The two parties may agree on every other point but will have diametrically opposing views on what the start-up is worth and how much equity the investor should receive in exchange for his capital.
Valuation is challenging for a start-up. Since young businesses take time to become profitable, the trick of valuing start-ups is to focus on the future. If you want your start-up to be a masterpiece, you’ll need to use the right side of your brain as much as your left to determine value.
Is business valuation art or science? Is it possible to place a credible valuation on a Start-up? What is Pre-money valuation? What is Post-money valuation? How much your company worth? Are you really worth anything until you’re profitable? How to value your start-up for a VC? What are the Start-up valuation methods?
Venture Fast Track - Company Valuation and Metrics - top down or bottom up?The Capital Network
Defending your corporate valuation to Angels & VCs is nearly impossible. In this program, we will discuss valuation methodologies, metrics, tactics, and tips for early-stage corporate valuations.
Startup Valuation: from early to mature stagesTatiana Siyanko
Methods and approached to startup and company valuations.
Please be free to send me any additions/correction proposals.
Prepared for Startup&co lecture in Freud cafe, Kyiv, April 30, 2014
CHARTERED INVESTOR PROGRAM:
The Chartered Investor designation is the official designation for analysts and associates in investment banking and private equity. The CI Institute tests candidates on financial modeling and valuation at three levels and provides the designation after all levels are passed and a certain amount of experience is gained in investment banking or private equity.
WHY THE CHARTERED INVESTOR PROGRAM?
Bulge bracket investment banks and leading private equity firms recognize the Chartered Investor designation.
BECOME A CHARTERHOLDER
Earning the CI charter demonstrates you have the knowledge, skills, and experience needed for investment banking and private equity in today's dynamic global markets.
COURSE OF STUDY
The CI Program course of study includes the Candidate Body of Knowledge, the curriculum content, learning outcome statements, and the topic area weights.
ABOUT THE EXAM
The CI Program includes a series of three exams; Levels I, II, and III. The exams: Are offered annually at test centers around the world on the first Saturday in June. The Level I exam is also offered in December.
The Best Startup Investor Pitch Deck & How to Present to Angels & Venture Cap...J. Skyler Fernandes
Take the online video course on Udemy:
https://www.udemy.com/course/the-best-startup-investor-pitch-deck/?referralCode=A5ED0FBD65120A93A16E
3.5+hrs of video content, walking step by step each part of the pitch, with personal VC stories, examples, and advice.
The "Best" Startup Investor Pitch Deck is an aggregation of some of the best pitch decks and wisdom from some of the top angels, VCs, and entrepreneurs including my own person insight/experience. The slide deck includes a template for entrepreneurs to use to present to investors, with details on what should be addressed on each slide. There are also additional slides on how best to pitch to investors effectively, how to design and format slides, and what to do before the pitch.
Africa on the Rise - The Evolution of Innovation on the ContinentJ. Skyler Fernandes
The rise of incubators and accelerators in Africa has led to a new eco-system for startups and innovation on the continent. Africa is innovating Africa and the World.
How do you figure out how much money you need, and when? We’ll look at a case study and talk P&L to help you determine the right market for your product and which funding source is most appropriate to maximize the exit for your company.
Startany.com. Remote Acceleration Program.
---------------------------------------------------------------
The Founder’s Guide to Early-Stage Valuation
Presented by Stephen R. Poland, co-founder 1x1 Media.
For many early-stage entrepreneurs assigning a valuation to your startup is one of the more intimidating tasks encountered during the fundraising quest. Based on the popular Founders’ Pocket Guide: Startup Valuation, this webinar provides a quick reference to all of the key topics around early-stage startup valuation and provides step-by- step examples for several valuation methods.
This webinar helps startup founders learn:
What a startup valuation is and when you need to start worrying about it.
Key terms and definitions associated with valuation, such as pre-money, post-money, and dilution.
How investors view the valuation task and what their expectations are for early-stage companies.
How the valuation fits with your target raise amount and resulting founder equity ownership.
How to do the simple math for calculating valuation percentages.
How to estimate your company valuation using several accepted methods.
Stephen R. Poland
Stephen R. Poland has worked with hundreds of startups and entrepreneurs, mentoring them on startup mechanics, funding plans, pitch decks, financial models, and due diligence documentation for the angel funding process.
Steve brings more than 20 years' experience in startups and entrepreneurship to his career. Leveraging leadership roles with the Walt Disney Company, MacMillan Publishing, and Bertelsmann, Steve co-founded startups in the digital music and on-demand media manufacturing sectors, as well an early days anti-virus product.
Along with being co-founder of 1x1 Media, Steve works as a venture growth advisor in Western North Carolina.
Scott droney - financing start-up and growthScott Droney
Scott Droney is provide financial services spectrum as well as data processing and managing segments. Since most of its financial services were retail focused, the need to build scale and skill in the transaction processing domain became imperative.
Entrepreneurs need to put a value on their start-ups in order to raise money, and investors need to put a value on their investments to ensure an adequate return on investment. No negotiating item between entrepreneur and investor creates a wider gulf than this one. The two parties may agree on every other point but will have diametrically opposing views on what the start-up is worth and how much equity the investor should receive in exchange for his capital.
Valuation is challenging for a start-up. Since young businesses take time to become profitable, the trick of valuing start-ups is to focus on the future. If you want your start-up to be a masterpiece, you’ll need to use the right side of your brain as much as your left to determine value.
Is business valuation art or science? Is it possible to place a credible valuation on a Start-up? What is Pre-money valuation? What is Post-money valuation? How much your company worth? Are you really worth anything until you’re profitable? How to value your start-up for a VC? What are the Start-up valuation methods?
Venture Fast Track - Company Valuation and Metrics - top down or bottom up?The Capital Network
Defending your corporate valuation to Angels & VCs is nearly impossible. In this program, we will discuss valuation methodologies, metrics, tactics, and tips for early-stage corporate valuations.
Startup Valuation: from early to mature stagesTatiana Siyanko
Methods and approached to startup and company valuations.
Please be free to send me any additions/correction proposals.
Prepared for Startup&co lecture in Freud cafe, Kyiv, April 30, 2014
CHARTERED INVESTOR PROGRAM:
The Chartered Investor designation is the official designation for analysts and associates in investment banking and private equity. The CI Institute tests candidates on financial modeling and valuation at three levels and provides the designation after all levels are passed and a certain amount of experience is gained in investment banking or private equity.
WHY THE CHARTERED INVESTOR PROGRAM?
Bulge bracket investment banks and leading private equity firms recognize the Chartered Investor designation.
BECOME A CHARTERHOLDER
Earning the CI charter demonstrates you have the knowledge, skills, and experience needed for investment banking and private equity in today's dynamic global markets.
COURSE OF STUDY
The CI Program course of study includes the Candidate Body of Knowledge, the curriculum content, learning outcome statements, and the topic area weights.
ABOUT THE EXAM
The CI Program includes a series of three exams; Levels I, II, and III. The exams: Are offered annually at test centers around the world on the first Saturday in June. The Level I exam is also offered in December.
The Best Startup Investor Pitch Deck & How to Present to Angels & Venture Cap...J. Skyler Fernandes
Take the online video course on Udemy:
https://www.udemy.com/course/the-best-startup-investor-pitch-deck/?referralCode=A5ED0FBD65120A93A16E
3.5+hrs of video content, walking step by step each part of the pitch, with personal VC stories, examples, and advice.
The "Best" Startup Investor Pitch Deck is an aggregation of some of the best pitch decks and wisdom from some of the top angels, VCs, and entrepreneurs including my own person insight/experience. The slide deck includes a template for entrepreneurs to use to present to investors, with details on what should be addressed on each slide. There are also additional slides on how best to pitch to investors effectively, how to design and format slides, and what to do before the pitch.
Africa on the Rise - The Evolution of Innovation on the ContinentJ. Skyler Fernandes
The rise of incubators and accelerators in Africa has led to a new eco-system for startups and innovation on the continent. Africa is innovating Africa and the World.
This deck outlines how venture capital works from the venture capital perspective from investment criteria, investment strategy, how deal flow works, and deal flow management.
This is an evaluation sheet for a company pitch and can be used by investors or judges of pitch competitions. I used this regularly in first round meetings with companies as well. It is also a great resource for entrepreneurs to review to see if their pitch covers everything needed to sway an investor. This evaluation sheet is based on the "The 'Best' Startup Investor Pitch Deck": http://www.slideshare.net/Sky7777/the-best-startup-pitch-deck-how-to-present-to-angels-v-cs
A reproduction of the official pitch deck template recommended by leading VC firm Sequoia Capital.
YOU MIGHT ALSO LIKE THESE PITCH DECK EXAMPLES & TEMPLATES:
> Airbnb pitch deck @ https://pitchdeckcoach.com/airbnb-pitch-deck
> Sequoia Capital pitch deck template @ https://pitchdeckcoach.com/sequoia-capital-pitch-deck
> FREE pitch deck template download @ https://pitchdeckcoach.com/free-pitch-deck-template
> Pitch deck guide with hints, tips, and a worked example @ https://pitchdeckcoach.com/pitch-deck-template
NEED HELP WITH YOUR PITCH DECK?
See how I can help then book a free call @ https://pitchdeckcoach.com/
MORE PITCH DECK RESOURCES @ https://pitchdeckcoach.com/pitch-deck-template#resources
Economic growth in Africa remains strong with growth of 5% in 2013. At least a third of countries in the region are growing at 6% and more, and African countries are now routinely among the fastest-growing countries in the world. Yet for businesses seeking to expand into or operate on the Continent and their legal advisers, there remain serious challenges to success. So how can we all make the most of this continent of opportunity and challenges?
Focussing particularly on recent developments, legal harmonization, opportunities and day to day issues in the legal world in Africa, the session will provide an insight into the potential challenges that lawyers may find when working with clients or on transactions or litigations in Africa and suggest some ways to mitigate the risks. Covering a range of topics such political risk, corruption, the importance of trust and relationship-building and the different pace of working, the webinar will provide a unique insight into working in Africa and present our unique offering on the continent.
Fast Track Tools brings you a simple customizable presentation evaluation form. This can be used to solicit feedback on content, delivery, visuals, and on how you facilitate Q&A. This framework will give your observers a framework for evaluating your presentation.
A pitch deck template with sample copy to help technology startups sell their business concept to angel investors and VCs. Inspired by pitch deck words of wisdom from Dave McClure (500 Startups), AirBnb, Guy Kawasaki and Venture Hacks (the folks behind AngelList).
YOU MIGHT ALSO LIKE THESE PITCH DECK EXAMPLES & TEMPLATES:
> Airbnb pitch deck @ https://pitchdeckcoach.com/airbnb-pitch-deck
> Sequoia Capital pitch deck template @ https://pitchdeckcoach.com/sequoia-capital-pitch-deck
> FREE pitch deck template download @ https://pitchdeckcoach.com/free-pitch-deck-template
> Pitch deck guide with hints, tips, and a worked example @ https://pitchdeckcoach.com/pitch-deck-template
NEED HELP WITH YOUR PITCH DECK?
See how I can help then book a free call @ https://pitchdeckcoach.com/
MORE PITCH DECK RESOURCES @ https://pitchdeckcoach.com/pitch-deck-template#resources
A Step By Step Guide To Growing A Technology Business The Legal Aspects O...lisaabe
Whether you are an entrepreneur or an investor, this presentation sets out the legal and business framework on How to Grow Your Technology Business into a profitable success!
At our Wednesdays With Redchip event in February, our experts shared their top tips for early stage and growth businesses, including common pitfalls and simple steps you can take to help protect your clients at the outset including:
The best business structures for tax benefits and asset protection
Capital raising and grant eligibility
Identifying and protecting valuable IP assets
Managing key relationships and the agreements to have in place
Preparing for Early Stage Financing - Pedley, Millin & Gordinier - June 11, 2013almillin
Presentation from a June 11, 2013 workshop titled “Preparing for Early Stage Financing”. Topics covered include:
1. Creating a compelling investor package and preparing for investor presentations
2. Evaluating the sources of financing and legal structures for each stage of a company’s lifecycle
3. Negotiating a term sheet – a deep dive into the key legal provisions and their impact
4. Understanding the different set of documents that comprise the “Definitive Documentation”
5. Preparing for the due diligence process
6. Complying with federal and state regulatory requirements
Early Stage Venture Financings: Terms, Negotiations, and Closingideatoipo
Getting your first round of financing closed is a critical milestone for every start up.
The speakers will review how to find the right investor, how to negotiate the key terms with a view to future rounds, and how to prepare for the due diligence process to get to a quick closing.
Creating the investment pitch investors want to hear, andrew sloane morisons ...AlbaInnovationCentre
Andrew Sloane of Morisons Solicitors LLP.
Andrew is a partner with the Corporate team at Morisons Solicitors and formerly led the investment activity of the funds at the Scottish Investment Bank. Andrew will provide a practical guide to identifying prospective investors, approaching them with an investment proposition, raising funds, executing the deal and on-going investor engagement.
There are numerous pitfalls to launching a startup: losing intellectual property rights, overcomplicating the financing, failing to establish the ground rules with co-founders, and more. Fenwick partner Andy Albertson shares tips for planning and building a successful business in this presentation given at UW CoMotion. Topics include IP rights, employment contracts, formation best practices, initial capitalization issues, compliance with securities laws, retaining founders and key employees, and building a strong board.
Turning an Idea or Product into a Business (Series: Business Advice - From St...Financial Poise
Building the infrastructure of a business around a product or service requires detailed focus upon items that are not intuitive.
An early decision which Founders must make is the selection of legal entity (LLC, Partnership, S Corp, C Corp, Non-Profit) for the business. Another critical action item is to consider steps to protect intellectual property by keeping copycats away, to the extent possible (i.e. with copyrights, trademarks, patents, non-disclosure agreements, among other things). Hiring and incentivizing employees and finding a way to finance the business are examples of other key areas that Founders may need assistance with. This webinar provides an overview of these topics and shares some best practices with regard to them.
To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/turning-an-idea-or-product-into-a-business-2021/
Want to use InvestNextDoor, or another returns-based crowd-funded money-raise? You'll need to issue a "security" to do so. Get the essentials here! Pt. 2 in our Securities series.
Similar to Inside The Mind Of The Venture Capitalist: Decoding Legal Structures & Investment Terms (20)
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the what'sapp contact of my personal pi merchant to trade with.
+12349014282
Seminar: Gender Board Diversity through Ownership NetworksGRAPE
Seminar on gender diversity spillovers through ownership networks at FAME|GRAPE. Presenting novel research. Studies in economics and management using econometrics methods.
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the what'sapp number.
+12349014282
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the what'sapp contact of my personal pi vendor
+12349014282
Lecture slide titled Fraud Risk Mitigation, Webinar Lecture Delivered at the Society for West African Internal Audit Practitioners (SWAIAP) on Wednesday, November 8, 2023.
Yes of course, you can easily start mining pi network coin today and sell to legit pi vendors in the United States.
Here the what'sapp contact of my personal vendor.
+12349014282
#pi network #pi coins #legit #passive income
#US
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the what'sapp number of my personal pi merchant who i trade pi with.
Message: +12349014282 VIA Whatsapp.
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
BYD SWOT Analysis and In-Depth Insights 2024.pptxmikemetalprod
Indepth analysis of the BYD 2024
BYD (Build Your Dreams) is a Chinese automaker and battery manufacturer that has snowballed over the past two decades to become a significant player in electric vehicles and global clean energy technology.
This SWOT analysis examines BYD's strengths, weaknesses, opportunities, and threats as it competes in the fast-changing automotive and energy storage industries.
Founded in 1995 and headquartered in Shenzhen, BYD started as a battery company before expanding into automobiles in the early 2000s.
Initially manufacturing gasoline-powered vehicles, BYD focused on plug-in hybrid and fully electric vehicles, leveraging its expertise in battery technology.
Today, BYD is the world’s largest electric vehicle manufacturer, delivering over 1.2 million electric cars globally. The company also produces electric buses, trucks, forklifts, and rail transit.
On the energy side, BYD is a major supplier of rechargeable batteries for cell phones, laptops, electric vehicles, and energy storage systems.
2. About The Lawyer
Mark McLaughlin
- 10+ years of corporate legal experience
- Counsels companies on legal formation
and initial rounds of investment
- Represented clients in purchase, sale,
public and private securities issuances
- Assists clients with daily business issues
such as employment agreements and
license agreements
- Works with Golenbock Eiseman Assor Bell
& Peskoe LLP and worked with a number
of New York law firms including Weil
Gotshal and Reed Smith
2
3. About The VC
J. Skyler Fernandes
- VC @ Centripetal Capital Partners,
invests $1-3M across industry sectors
- VC Mentor @ ER Accelerator
- Entrepreneur - co-founded a number
of internet startups
- Leader Of Missing Middle Initiative,
launched at World Economic Forum
Connect With
J. Skyler Fernandes:
3
4. Disclaimer
This presentation is intended to be used for educational
purposes only and not to replace independent professional
judgment. Statements of fact and opinions expressed are
those of the participants individually and, unless expressly
stated to the contrary, are not the opinion or position of any
company or organization. Inside the Mind of Venture
Capitalist and its speakers do not guarantee the accuracy or
completeness of the information included in this
presentation and accepts no responsibility for any
consequence of its use.
4
5. Choosing A Business Structure
Most Common Entities:
• Sole Proprietors
• Partnerships
• Limited Liability Company (LLC)
• Corporation (Inc.)
Issues to Consider:
• Potential risks and liabilities of your business
• Formalities and expenses involved in establishing and maintaining
the business structure
• Income tax situation
• Investment needs
5
6. Limited Liability Company (LLC)
(VC’s 2nd Choice)
For the majority of small businesses,
creating an LLC is the best choice
Protects:
• Personal assets from debts & liabilities of the business
Requires:
• Adequate capitalization, observe corporate formalities, create and
maintain separate bank accounts
LLC Profits Are Not Taxed:
• Single level of taxation: only at personal level (i.e.
salary/distributions)
• Tax benefit of passing losses to investors during early stage
Flexibility:
• LLCs are incredibly flexible = can make complex (for better/worse)
• Can be converted into a Corp, before going public (IPO)
6
7. Corporation (Inc)
(VC’s 1st Choice)
It Makes Sense To Create A Corporation When…
• You expect to have multiple investors in your business or IPO in future
• You want to provide fringe benefits to owners
• You want to entice or keep key employees by offering stock options and
stock bonus incentives
Corporations Require…
• formal record keeping and less flexibility in management structure and
method of distributing profits and losses
• Less flexible, but more straight forward for stock option plans, creating two or
more classes of stock (Common, Preferred), transferability of equity, etc.
“C” corporation profits are taxed
• Double taxation: the business and your salary/distributions
• Tax gains / losses held within company, not passed through to investors
“S” corporation tax benefits
• Shareholder may pay less self-employment tax than an LLC member with
similar income 7
8. Securities Regulation / Capital Raise
• Non-Accredited Investor (Ex. Friends/Family)
• Accredited Investors (Ex. Friends/Family/Angels)
– A net worth of $1M+, not including primary residence
– Made $200,000+ last two years ($300,000 with
spouse) and expect to make same amount this year
– A general partner, executive officer, director or a
related combination for the issuer of a security
• Qualified investor (Super Angels/VCs)
– Qualified investors are individuals, trust accounts or
institutional funds with at least $5 million to invest
8
9. Securities Regulation / Capital Raise
• Investment Banking Fee vs. Referral Fee
• Seed Round (Friends/Family/Angels) (Up to $1M)
– Equity (Ex. 3M-5M valuation)
– Convertible Debt w/ Interest
• @ set share price after period of time
• Into Series A
• Discount price into Series A
• Series A (VC’s & Financial Institutions) ($1M+)
• Series B, C, D (Follow on rounds)
9
11. Copyright
• Covers original works of authorship fixed in a
tangible medium
– Books, dance, movies, music, computer programs
– Protects expression not ideas
• Term
– Life of known author plus 70 years
– Shorter of 95 years from publication or 120 years
from invention
11
12. Trademark
Right created to protect the identification of the source
or affiliation of goods
Covers:
– Words
– Symbols
– Colors
– Sounds
Term: Potentially unlimited if protected and not abandoned
12
13. Trademark
• Strength is in distinctiveness
• Registered with the government
• Use it:
– Affix it to goods, stationary, documents, etc.
• Indicate that it is a protected mark
– TM and SM indicate federally registered marks
– [circle R] not federally registered but still protected mark
• Abandonment
– Failure to protect as outlined above
– License the mark alone without other assets
– License the right to control the mark
13
14. Trade Secret
• Covers: Proprietary information
Customer lists
Training methods
Business strategy
Formula for Coke and Pepsi
• Property of the business
• Subject to confidentiality protections
• Not registered or filed
• Proprietary (not in the legal sense) can also be…
– Team / Individuals (There is only one of YOU!)
– Experience (Unique insight)
– Network (Able to reach /execute where others cannot)
14
15. Patent
• Covers
– Non-obvious new and useful inventions
– Description, drawings and claims
• Comprises exclusive rights - Make, sell or offer those inventions
• Term - 20 years from filing a patent
• Process can be long and expensive - Consult IP attorney
• Design - Visual (non-functional) features of manufactured goods
• Utility - Protects process, machine, manufacture, or composition
• Non-provisional - Establishes filing date and begins examination
• Provisional - Only establishes filing date and expires after one year
15
16. Patent
• Preparing Patent Application
• Filing Application
– Secure filing date, claimed invention is officially “patent pending.”
– Filing fees may be in the range of $500-$1,000
• Prosecuting Your Patent Application
– Assigned patent examiner to review, searching relevant prior art,
make any objections and rejections of claims
– Lengthy/Expensive process
• Allowance / Issuance
– Utility: $1,510, Design: $860 (Half price for small entities)
• Maintenance
– Maintenance fees 3.5 ($980), 7.5 ($2,480) and 11.5 ($4,110) years
– Half price for small entities
16
17. Intellectual Property – Tips
Protect brand by staking out Online / Social Media Real Estate:
Web URLs
17
18. Valuation
• Valuation Should Be Reasonable
– Not to high too, not too low (Build value)
– Investors ultimately determines valuations NOT Entrepreneurs
– 2-3+ rounds before exit, don’t want to do a down round
• Size of Capital Rounds
– Too much capital is just as bad as not enough capital (Dilution)
• Terms of current round is built on results from previous round
• If company doesn’t meet expectations
– Next round investors will require higher return and more rights
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19. Equity
• Common Shares
– Indicates ownership of a company
– Right to company’s assets AFTER company pays debt & preferred shares
• Preferred Shares (Special rights)
– Liquidation Pref, 1x, 2x, 3x principal capital invested (prior to common)
– Warrant Coverage (Cash/Cashless Preferred or Common shares)
– Anti-dilution (Weighted Average, Full Ratchet, Not price based)
– Blocking rights (Company sale, equity financings) / Demand Sale or IPO
– Rights to invest on a pro rata basis in future equity financings
– Information & inspection
– Voting: Rights to approve certain corporate actions / Board Members
• Participating / Convertible Preferred Shares
– Special Rights & Voting
– Dividends: Rights to payment prior to Common (% of Investment)
– Converts to common stock (Double Dipping) 19
20. Waterfall
Dividends +
Preferred
Converted To
Common
Preferred,
Liquidation Pref
1x-2x
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21. Waterfall
Exit Value $ 90,000,000 $ 14,250,000
Date Preferred Return Invested Liquidation Pref Preferred Return Preferred Return
2005 Series B - Venture Fund $ 5,000,000 2x $ 10,000,000 $ 10,000,000
Series B Dividends $ 1,000,000 $ 1,000,000
2003 Series A - Venture Fund $ 2,500,000 1x $ 2,500,000 $ 2,500,000
Series A Dividends $ 250,000 $ 250,000
2002 Founders Shares $ 500,000 1x $ 500,000 $ 500,000
Total Preferred Return $ 14,250,000 $ 14,250,000
Remaining Cash $ 75,750,000 $ X -
Common Return Invested Ownership Common Return Total Return Multiple Common Return
2002 Investor A $ 500,000 5.00% $ 3,787,500 $ 3,787,500 7.6x -
2002 Investor B $ 500,000 5.00% $ 3,787,500 $ 3,787,500 7.6x -
2002 Investpr C $ 500,000 5.00% $ 3,787,500 $ 3,787,500 7.6x -
2002 Investpr D $ 500,000 5.00% $ 3,787,500 $ 3,787,500 7.6x -
2002 Investor E $ 500,000 5.00% $ 3,787,500 $ 3,787,500 7.6x -
2003 Venture Fund A $ 2,500,000 30.00% $ 22,725,000 $ 25,475,000 10.2x -
2005 Venture Fund B $ 5,000,000 20.00% $ 15,150,000 $ 26,150,000 5.2x -
2002 Founders $ 500,000 25.00% $ 18,937,500 $ 19,437,500 38.9x -
Total Common Return $ 10,500,000 100.00% $ 75,750,000 $ 90,000,000 $ -
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22. Dividends
• Accruing Dividends for first 1-2yrs (early stage companies)
• PIK = Paid-In-Kind (via stock), when unable to pay cash
• Carrot (cash) & Stick (dilution)
• Cash along the way vs. just as the end
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23. Key Terms for Founders / Employees/Advisors
• Founders (Uneven ownership is best)
• Employees (Salary + equity)
• Advisors (0.25%-1%, with milestones that lead to revenue or capital)
• Vesting, single-trigger, 4yrs, termination clause
• Deferred salary with interest, catch up upon exit (above common
upon liquidation)
• Upon Hitting Milestones
– Additional Options / Warrants (Adding shares)
– Clawbacks (Reducing / Transferring shares)
• Employee Bonus Pools
– Created before or after investment rounds
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24. Exits
Liquidation: the exit strategy
– IPO
– Strategic Sale (Competitor / Partner)
– Financial Buyer (PE - Strong cash flows)
– Merger
– Management Buyout
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