The document provides an overview of key terms that are negotiated in a venture capital financing. It discusses valuation, liquidation preference, dividend preference, anti-dilution provisions, board representation, veto rights, restrictions on founder stock transfers, and registration rights. The goal is to help entrepreneurs understand what to expect and negotiate effectively in a VC financing.
Understanding the effects of dilution for your startup: definition, formula, risks to take into account and term sheet rights involved.
Read more at: https://www.equidam.com/an-angel-investor-and-an-economist-on-dilution/
Compute your valuation for free at: https://www.equidam.com/
How Do Convertible Notes Work For Early-stage FinancingEquidam
What is the definition of convertible debt and how to use it in early-stage startup financing. You can also see the calculations we made using our Convertible Note Calculator.
To read more take a look at this article: https://www.equidam.com/practical-advice-pricing-convertible-note/
Compute your company valuation for free at https://www.equidam.com/
Pre-Series A Funding Vehicles ( Convertible Notes, SAFE, KISS, etc.)ideatoipo
Obtaining funding for early stage startups can be challenging. The array of funding options available to entrepreneurs can be confusing and fraught with pitfalls.
This presentation covers:
1) convertible notes
2) SAFE documents
3) KISS documents
and more!
Corporations often have two types of stocks: common and preferred. There are both advantages and disadvantages to each. Let’s say you have $10,000 to invest in a corporation that issues both common and preferred stock. Your main goal is to maximize the amount of dividends received. Which of the types of stock would you invest in? Explain your answer.
Understanding the effects of dilution for your startup: definition, formula, risks to take into account and term sheet rights involved.
Read more at: https://www.equidam.com/an-angel-investor-and-an-economist-on-dilution/
Compute your valuation for free at: https://www.equidam.com/
How Do Convertible Notes Work For Early-stage FinancingEquidam
What is the definition of convertible debt and how to use it in early-stage startup financing. You can also see the calculations we made using our Convertible Note Calculator.
To read more take a look at this article: https://www.equidam.com/practical-advice-pricing-convertible-note/
Compute your company valuation for free at https://www.equidam.com/
Pre-Series A Funding Vehicles ( Convertible Notes, SAFE, KISS, etc.)ideatoipo
Obtaining funding for early stage startups can be challenging. The array of funding options available to entrepreneurs can be confusing and fraught with pitfalls.
This presentation covers:
1) convertible notes
2) SAFE documents
3) KISS documents
and more!
Corporations often have two types of stocks: common and preferred. There are both advantages and disadvantages to each. Let’s say you have $10,000 to invest in a corporation that issues both common and preferred stock. Your main goal is to maximize the amount of dividends received. Which of the types of stock would you invest in? Explain your answer.
An infographic to easily explain the process of conversion and equity split as consequence of funding with convertible notes.
To find out more check out: https://www.equidam.com/startup-resources/
Compute your company value for free and in minutes at https://www.equidam.com/
While it's true that valuing a business is part art part science, there are specific methodologies that can be applied to determine the value of a business. Here are the 5 most frequently used methods to value a startup.
Find out more on: https://www.equidam.com/how-to-value-a-business/
Discover your company value on https://www.equidam.com/
Discount rate for the valuation of your company or startupEquidam
Understanding discount rate: definition, formulas, importance for negotiation and useful sources to find the right one for the valuation of your company or startup.
Read more on: https://www.equidam.com/the-discount-rate-in-the-valuation-of-a-startup/
Curious about your discount rate and valuation? Sign up for free at at https://www.equidam.com/
An infographic to easily explain the process of conversion and equity split as consequence of funding with convertible notes.
To find out more check out: https://www.equidam.com/startup-resources/
Compute your company value for free and in minutes at https://www.equidam.com/
While it's true that valuing a business is part art part science, there are specific methodologies that can be applied to determine the value of a business. Here are the 5 most frequently used methods to value a startup.
Find out more on: https://www.equidam.com/how-to-value-a-business/
Discover your company value on https://www.equidam.com/
Discount rate for the valuation of your company or startupEquidam
Understanding discount rate: definition, formulas, importance for negotiation and useful sources to find the right one for the valuation of your company or startup.
Read more on: https://www.equidam.com/the-discount-rate-in-the-valuation-of-a-startup/
Curious about your discount rate and valuation? Sign up for free at at https://www.equidam.com/
A Frontline Ventures x Point Nine Capital collaboration.
It is no surprise that Germany dominates much of the conversation around European tech — the growth of the startup and venture capital ecosystem has surpassed even the most optimistic of expectations.
As an early-stage software fund in London/Dublin with a pan-European investment view, we are seeing exciting young companies emerging from all over Germany. They are following in the footsteps of already successful global companies like Rocket Internet, Soundcloud, and Auctionata.
Germany’s tech transformation is startling, and seems to only be just beginning. Learn more about:
- funding options for German startups
- notable players in the VC and startup ecosystem
- challenges that lay ahead for German tech
- future opportunities & existing winners
- typical terms offered to startups
- successful exits in Germany so far
A Frontline x Northzone collaboration.
The Nordics lead Europe in value creation. With a smaller population, less capital, distributed across 5 countries, the Nordics have produced some of the most successful companies in Europe. These are often not just regional champions, but companies that win on a global scale. In this presentation you will learn about:
- Charting funding, and startup success in Nordic countries
- An index of global champions: 23 of the Nordics most successful startups
- Total funds raised by VCs and internet investors in the Nordics
- Investors by stage, seed to growth, including international investors
- Late stage funding detail of Nordic participants
- US investors who participate in the Nordics
- Economic, cultural, and legal strengths and weaknesses
- Who to know: 34 partners of VC funds who shape the region
- Detailed profiles of 5 VC’s based in the Nordic region
- 8 success stories operating in 4 market sectors
- 16 rising stars in the Nordics
- Exit values and takeaways
Slides and notes from the MaRS Startup Investor Workshop. The event took place on September 30th, 2016 and featured Mark Skapinker and Sophie Forest from Brightspark, David Shore from OurCrowd.
Negotiating the Preferred Stock Term SheetBart Greenberg
This slide show outlines and discusses the key elements of a preferred stock term sheet, and shows the range of negotiability of those terms in the best and worst of times.
Learn from Jeffrey Char (President & CEO of J-Seed Ventures, serial entrepreneur) how to negotiate a typical venture capital term sheet.
Takeaway
-understand the terms & conditions of a term sheet
-negotiating and structuring investment deals
-negotiating terms for the benefit of founding team
The MSA Launch (http://bit.ly/1yhQPZV) is a 5-day event aiming to provide an introduction to MaGIC Academy. It is presented as a condensed version of how MaGIC Academy is going to contribute to you and the startup community. You will be able to experience a series of workshops, skill and sharing knowledge opportunity, and mentoring with our selected network of mentors.
Website : www.mymagic.my
Facebook : https://www.facebook.com/magic.cyberjaya
Twitter : https://twitter.com/magiccyberjaya
Youtube :
SlideShare : http://slidesha.re/1BfSncP
Email : enquiries@mymagic.my
Five Things Every Founder Must Know About Preference Shares | Hooi Yen ChinJessica Tams
Delivered at Casual Connect Asia 2016
You met the VCs, emailed your information decks and delivered your pitch. Then the term sheets arrive. You open them up and the alien language hits you! This session discusses the legal nature of preference shares, the common terms used in relation to preference shares and their impact on a funding round. Arm yourself with the knowledge you need to negotiate the preference share rights that investors commonly ask for.
Write a 250- to 350-word paper explaining why preferred stock is refer.docxSUKHI5
Write a 250- to 350-word paper explaining why preferred stock is referred to as preferred and what some of the features added to preferred stock are that make it more attractive to investors. Would you select preferred stock or common stock as an investment? Why?
Solution
Preferred shares are the shares which have priority over the common shareholders. Preferred stock promises a series of fixed payments to the investor and with relatively rare exceptions preferred dividends are paid in full and on time. Nevertheless, preferred stock is legally an equity security. This is because payment of a preferred dividend is within the discretion of the directors. The only obligation is that no dividends can be paid on the common stock until the preferred dividend has been paid. If the company goes out of business, the preferred stockholders get in the queue after the debtholders but before the common stockholders.
Preferred stock rarely confers full voting privileges. This is an advantage to firms that want to raise new money without sharing control of the firm with the new share-holders. However, if there is any matter that affects their place in the queue, preferred stockholders usually get to vote on it. Most issues also provide the holder with some voting power if the preferred dividend is skipped.
Most preferred stocks have the following distinctive features:
Preference over common stock as to dividends.
Cumulative dividend rights.
Preference over common stock as to assets in event of the liquidation of the company.
Callable at the option of the corporation.
No voting power.
Another important but less common feature of some preferred stocks is a clause permitting the conversion of preferred stock into common stock at the option of the holder. Preferred stocks vary widely with respect to the special rights and privileges granted.
Preferred stocks generally offer investors more assurance of regular dividend payments than do common stocks.
If I want to invest safely and do not want to bear any risk then I would prefer investing in preferred stock rather than common stock, whereas if I am willing to take risk so as to attain higher profits on the investment I would invest in common stock.
.
The Ghost of Christmas Yet to Come: Five Holiday Season Tips for Retail Landl...Allen Matkins
The holiday season brings many desirable things to a retail center: a fresh holiday look, a sense of excitement and anticipation, and the most important thing — more traffic and customers. Along with these benefits, the holidays also bring retail owners some legal and practical challenges.
Legal Issues In Real Estate Development Introduction to Environmental LawAllen Matkins
On March 27, 2013, Emily L. Murray presented, together with Eddie Arslanian of ENVIRON, a class on environmental law at USC, as part of a graduate class entitled ‘Legal Issues in Real Estate Development’ offered by USC's Masters in Real Estate Development (MRED) curriculum.
2011 Northern California Real Estate Women of InfluenceAllen Matkins
The awards program, co-sponsored by the Business Times and law firm Allen Matkins — recognized more than 50 women as Hall of Fame inductees, honorees and rising stars.
Every since the Pruneyard decision, public shopping malls have been seen as an extension of the public square. Although the property is private, protesters have free speech rights granted by the U.S. and California Constitutions. This can create problems for landlords who are trying to provide a pleasant retail environment for their guests and tenants.
Recent case law has changed the rules, but Allen Matkins has created a set of model rules for shopping center landlords. These rules address the time, place and manner issues upon which free speech can be limited in shopping malls.
The French Revolution, which began in 1789, was a period of radical social and political upheaval in France. It marked the decline of absolute monarchies, the rise of secular and democratic republics, and the eventual rise of Napoleon Bonaparte. This revolutionary period is crucial in understanding the transition from feudalism to modernity in Europe.
For more information, visit-www.vavaclasses.com
Introduction to AI for Nonprofits with Tapp NetworkTechSoup
Dive into the world of AI! Experts Jon Hill and Tareq Monaur will guide you through AI's role in enhancing nonprofit websites and basic marketing strategies, making it easy to understand and apply.
How to Make a Field invisible in Odoo 17Celine George
It is possible to hide or invisible some fields in odoo. Commonly using “invisible” attribute in the field definition to invisible the fields. This slide will show how to make a field invisible in odoo 17.
Honest Reviews of Tim Han LMA Course Program.pptxtimhan337
Personal development courses are widely available today, with each one promising life-changing outcomes. Tim Han’s Life Mastery Achievers (LMA) Course has drawn a lot of interest. In addition to offering my frank assessment of Success Insider’s LMA Course, this piece examines the course’s effects via a variety of Tim Han LMA course reviews and Success Insider comments.
Macroeconomics- Movie Location
This will be used as part of your Personal Professional Portfolio once graded.
Objective:
Prepare a presentation or a paper using research, basic comparative analysis, data organization and application of economic information. You will make an informed assessment of an economic climate outside of the United States to accomplish an entertainment industry objective.
June 3, 2024 Anti-Semitism Letter Sent to MIT President Kornbluth and MIT Cor...Levi Shapiro
Letter from the Congress of the United States regarding Anti-Semitism sent June 3rd to MIT President Sally Kornbluth, MIT Corp Chair, Mark Gorenberg
Dear Dr. Kornbluth and Mr. Gorenberg,
The US House of Representatives is deeply concerned by ongoing and pervasive acts of antisemitic
harassment and intimidation at the Massachusetts Institute of Technology (MIT). Failing to act decisively to ensure a safe learning environment for all students would be a grave dereliction of your responsibilities as President of MIT and Chair of the MIT Corporation.
This Congress will not stand idly by and allow an environment hostile to Jewish students to persist. The House believes that your institution is in violation of Title VI of the Civil Rights Act, and the inability or
unwillingness to rectify this violation through action requires accountability.
Postsecondary education is a unique opportunity for students to learn and have their ideas and beliefs challenged. However, universities receiving hundreds of millions of federal funds annually have denied
students that opportunity and have been hijacked to become venues for the promotion of terrorism, antisemitic harassment and intimidation, unlawful encampments, and in some cases, assaults and riots.
The House of Representatives will not countenance the use of federal funds to indoctrinate students into hateful, antisemitic, anti-American supporters of terrorism. Investigations into campus antisemitism by the Committee on Education and the Workforce and the Committee on Ways and Means have been expanded into a Congress-wide probe across all relevant jurisdictions to address this national crisis. The undersigned Committees will conduct oversight into the use of federal funds at MIT and its learning environment under authorities granted to each Committee.
• The Committee on Education and the Workforce has been investigating your institution since December 7, 2023. The Committee has broad jurisdiction over postsecondary education, including its compliance with Title VI of the Civil Rights Act, campus safety concerns over disruptions to the learning environment, and the awarding of federal student aid under the Higher Education Act.
• The Committee on Oversight and Accountability is investigating the sources of funding and other support flowing to groups espousing pro-Hamas propaganda and engaged in antisemitic harassment and intimidation of students. The Committee on Oversight and Accountability is the principal oversight committee of the US House of Representatives and has broad authority to investigate “any matter” at “any time” under House Rule X.
• The Committee on Ways and Means has been investigating several universities since November 15, 2023, when the Committee held a hearing entitled From Ivory Towers to Dark Corners: Investigating the Nexus Between Antisemitism, Tax-Exempt Universities, and Terror Financing. The Committee followed the hearing with letters to those institutions on January 10, 202
Read| The latest issue of The Challenger is here! We are thrilled to announce that our school paper has qualified for the NATIONAL SCHOOLS PRESS CONFERENCE (NSPC) 2024. Thank you for your unwavering support and trust. Dive into the stories that made us stand out!
Model Attribute Check Company Auto PropertyCeline George
In Odoo, the multi-company feature allows you to manage multiple companies within a single Odoo database instance. Each company can have its own configurations while still sharing common resources such as products, customers, and suppliers.
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Operation “Blue Star” is the only event in the history of Independent India where the state went into war with its own people. Even after about 40 years it is not clear if it was culmination of states anger over people of the region, a political game of power or start of dictatorial chapter in the democratic setup.
The people of Punjab felt alienated from main stream due to denial of their just demands during a long democratic struggle since independence. As it happen all over the word, it led to militant struggle with great loss of lives of military, police and civilian personnel. Killing of Indira Gandhi and massacre of innocent Sikhs in Delhi and other India cities was also associated with this movement.
A Strategic Approach: GenAI in EducationPeter Windle
Artificial Intelligence (AI) technologies such as Generative AI, Image Generators and Large Language Models have had a dramatic impact on teaching, learning and assessment over the past 18 months. The most immediate threat AI posed was to Academic Integrity with Higher Education Institutes (HEIs) focusing their efforts on combating the use of GenAI in assessment. Guidelines were developed for staff and students, policies put in place too. Innovative educators have forged paths in the use of Generative AI for teaching, learning and assessments leading to pockets of transformation springing up across HEIs, often with little or no top-down guidance, support or direction.
This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
Chapter 3 - Islamic Banking Products and Services.pptx
The Entrepreneur's Guide to Negotiating a Venture Capital Financing
1. The Entrepreneur’s Guide to Negotiating
a Venture Capital Financing
Phil Schroeder
Allen Matkins Leck Gamble Mallory & Natsis LLP
1900 Main Street, 5th Floor
Irvine, California 92614-7321
949.851.5413
pschroeder@allenmatkins.com
CENTURY CITY | LOS ANGELES | ORANGE COUNTY | SAN DIEGO | SAN FRANCISCO
2. What do you need to know?
Understand the essential deal terms negotiated in a
Venture Capital financing
Topics Covered
Background
Valuation
Liquidation Preference
Dividend Preference
Anti-dilution Provisions
Board of Directors
Veto Rights (Protective Provisions)
Restrictions on Founders’ Right to Transfer Shares
Registration Rights
Current Trends in Convertible Debt
3. Background
Should your company seek Angel or Venture Capital funding?
Exit Strategy
Amount of money required to launch the
business (will a loan be enough to get started?)
4. Background
What are the typical documents in a VC financing?
Preferred Stock Purchase Agreement
(First Amended and Restated) Certificate of
Incorporation
Investors’ Rights Agreement
Voting Agreement
Right of First Refusal and Co-Sale Agreement
5. Background
Preferred Stock vs. Common Stock
Preferred Stock has certain rights and preferences
that are superior to Common Stock
During the life of a company, there may be multiple
“series” of Preferred Stock (e.g. Series A, Series B
and Series C) each having a different set of rights and
preferences
Typically a new series of Preferred Stock is created
for each round of financing and each successive
series has superior rights and preferences
Rights and preferences are defined in the Certificate
of Incorporation
6. Background
“Seed” Financing
Less than $1 million
Possible terms of “Plain Vanilla” Preferred Stock
1x, non-participating Liquidation Preference
NO Dividend Preference
NO Registration Rights
NO Anti-dilution Protection
Limited Veto Rights (Protective Provisions)
NO Redemption Rights
“Most favored nations” clause with respect to rights granted
to future investors
7. Valuation
Terms
Pre-Money Valuation – valuation of the Company pre-
investment
Post-Money Valuation – Pre-Money Valuation PLUS amount
invested
Investors generally want lower valuations and founders
generally want higher valuations, BUT
Consider the impact of valuations that are too high or too low
8. Valuation
Valuation is what the investor is willing to pay
Valuing early stage companies is “more art than science”
Traditional “scientific” models are of limited usefulness
Company-specific factors to consider:
Market Opportunity (size, growth rate, competition)
Strength of Management Team (credentials, track record,
vision, drive)
Product/Solution (achievable, salable, scalable, timely,
protectable advantage)
Progress to Date
9. Valuation
Negotiating Valuation
Best Leverage – have multiple sources of funding
Negotiate based on the merits of the Company
Ask the investor to explain their valuation analysis
Valuation may be significantly impacted by liquidation
preference and dividend preference negotiations
10. Liquidation Preference
Distribution of payments upon any liquidation, dissolution or
winding up of the Company or sale of substantially all of the
assets of the Company
Holders of stock with a superior liquidation preference will be paid
before other stockholders
Preferred Stockholders may receive a multiple of the amount they invested
(plus accrued dividends) prior to the Common Stockholders receiving any
payment (e.g. 1x, 2x)
What happens if funds are not sufficient to cover the liquidation
preference?
Preferred Stockholders share funds pro-rata; Common Stockholders
receive nothing
11. Liquidation Preference
Non-participating Preferred – Preferred Stockholders receive
their preference payment and nothing more
Fully Participating Preferred – Preferred Stockholders receive
their preference payment AND share any remaining funds pro-rata
with the Common Stockholders
Capped Participating Preferred – Preferred Stockholders
receive their preference payment and participate pro-rata with the
Common Stockholders up to a capped aggregate return
Cap may be a multiple of amount invested (e.g. 3x, 4x)
Incentive for investors to convert to Common Stock if the sale
price is high enough and investors can receive more money by
“fully” participating with the Common Stock
12. Dividend Preference
Holders of stock with a superior dividend preference will
receive dividends before other stockholders
Non-Cumulative Dividends – a set dividend is defined
but it will be paid only “when and if declared by the
Board”
Cumulative Dividends – a set dividend will “accrue”
each year whether or not declared by the Board;
cumulative dividends are typically paid upon a liquidation
13. Anti-Dilution Provisions
Protects Preferred Stockholders from dilution in the
event that stock is sold at a lower valuation in a later
financing round
Adjusts the rate at which Preferred Stock converts into
Common Stock (typically, 1:1 at first)
Conversion rates may effect liquidation provisions,
voting rights, rights of first refusal, registration rights, etc.
14. Anti-Dilution Provisions
Full-ratchet Adjustment – Conversion price reduced to
the price at which the new shares are sold
Weighted Average Adjustment
The amount of the adjustment is affected by the valuation in
the down round and the amount of shares issued in the “down
round” compared to the “fully-diluted” outstanding shares
The more shares that are issued in the “down round”, the
greater the adjustment
15. Anti-Dilution Provisions
Broad-based weighted average
Company-friendly
“Fully-diluted” shares includes options and shares reserved
for option plan
Narrow-based weighted average
Investor-friendly
“Fully-diluted shares does NOT include options
16. Board of Directors
Voting Agreement
Preferred Stockholders will be able to appoint one or
more members to the Board (typically investor affiliates)
Common Stockholders may be able to appoint one or
more members to the Board (e.g. founders, CEO or
other officers)
Remaining stockholders may be independent directors
elected by all stockholders
Rights to appoint directors may terminate if stockholders
sell a certain percentage of their stock
17. Veto Rights (Protective Provisions)
The Company may not take certain actions
without the approval of the Preferred
Stockholders
approval threshold will be a percentage of the
outstanding Preferred Stock
the exact percentage will be negotiated between the
investors
18. Veto Rights (Protective Provisions)
Actions that typically require approval by the Series A
Preferred Stockholders:
liquidate, dissolve or wind-up the affairs of the Company, or
effect any deemed liquidation event;
amend, alter, or repeal any provision of the Certificate of
Incorporation or Bylaws;
create or authorize the creation of or issue any other security
convertible into or exercisable for any equity security, having
rights, preferences or privileges senior to or on parity with the
Series A Preferred, or increase the authorized number of
shares of Series A Preferred;
19. Veto Rights (Protective Provisions)
Actions that typically require approval of the holder of
Series A Preferred Stock:
purchase or redeem or pay any dividend on any capital stock
prior to the Series A Preferred, other than stock repurchased
from former employees or consultants in connection with the
cessation of their employment/ services, at the lower of fair
market value or cost;
create or authorize the creation of any debt security if the
Company’s aggregate indebtedness would exceed $[____]
other than equipment leases or bank lines of credit; and
increase or decrease the size of the Board of Directors.
20. Restrictions on Founders’ Rights
to Transfer Shares
Why do the investors want to place restrictions
on the founders’ stock?
The investors are investing in the people as much as
the idea
The investors want to make sure that the founders
remain motivated and will not abandon the business
21. Restrictions on Founders’ Rights
to Transfer Shares
Vesting Schedule – Attach a vesting schedule to the
founders’ Common Stock
Company has a right to repurchase the founder’s unvested
stock if the founder terminates employment
typically vests over three to fours years in monthly increments
Repurchase Price – equal to founder’s cost or fair market
value at the time of repurchase
Mandatory Repurchase vs. Discretion of the Board
22. Restrictions on Founders’ Rights
to Transfer Shares
Right of First Refusal – The Preferred Stockholders
and/or the Company have the right to purchase the
offered shares on the same terms.
prevents unknown parties from becoming stockholders of the Company
Co-Sale Rights – The Preferred Stockholders have
the right to sell their pro-rata number of shares to the
proposed buyer
effectively reduces the amount of shares that the founder may sell
(stops them from selling out)
gives the investors some liquidity (allows the investors to sell their
stake to the same extent as the founder)
23. Registration Rights
Background – Shares that are “registered” may be sold
publicly, which creates liquidity for the stockholder
Publicly traded companies must file periodic reports with
the SEC (can be expensive and time consuming)
In addition to the holders of Preferred Stock, the
founders and management also may have registration
rights
Rights are subject to underwriter cutbacks
24. Registration Rights
Demand Rights – Certain investors can cause the
Company to undertake an IPO and/or register their
shares
Typically, can only force the company to register shares a
certain number of times (usually one or two times)
Demand rights typically may not be exercised until three to five
years after the financing or [6] months after an IPO
25. Registration Rights
S-3 Registration Rights – Certain investors can
cause the Company to register their shares using
Form S-3
Form S-3 is a short form registration statement (reduces
workload because the Company can refer to information
in prior SEC filings)
Typically, can only force the company to register shares
one or two times per 12-month period
Minimum aggregate value of shares to be registered
(typically $1-5 million)
26. Registration Rights
Piggy-back Registration Rights – Allows certain
stockholders to register their shares when the Company
has already elected to make a public offering or register
the shares of other stockholders
27. Other Terms
Right to Participate Pro Rata in Future Rounds
Pay to Play – penalize investors who do not invest pro
rata in future rounds (convert their Preferred Stock into
Common Stock, lose anti-dilution rights, lose Board seat
or lose right to participate in future rounds)
Redemption Rights – Investors can force the Company
to repurchase their shares at some time in the future
28. Current Trends in Convertible Debt
Alternative to Equity Financing to reduce transaction
costs
Loan Converts into Preferred Stock at the next
Preferred Stock financing
At the same price as the next round, or
At a discount to the next round price
Recent Trend – Cap on conversion price
Effect is hard to predict; can result in a huge discount to next
round valuation
Complicates negotiations
30. Phil Schroeder
Phil's practice focuses on fulfilling the general corporate needs of early stage to middle market
companies with an emphasis on financing transactions and technology transfer agreements.
Phil provides advice with respect to transactions geared toward growth including preferred
stock financings, bridge loan financings, and mergers and acquisitions. He also represents
clients with respect to a wide range of other contractual arrangements including stockholders
agreements, employment and consulting agreements, and employee compensation plans
(including stock options and other forms of equity incentive plans). Phil has extensive
experience advising founders on choice of entity and setting up new companies including
limited liability companies, S-corporations and C-corporations.
In addition to his corporate and securities work, Phil develops strategies for protecting his
Philip C. Schroeder clients' intellectual property and advises clients with respect to the various protections afforded
Senior Counsel by patent, trademark, copyright and trade secret laws. Phil's intellectual property practice
Orange County Office
Phone: 949.851.5413
involves representing clients in connection with licensing agreements, trademark prosecution,
Facsimile: 949.553.8354 nondisclosure agreements, technology acquisition agreements, technology development
pschroeder@allenmatkins.com agreements, manufacturing agreements, distribution agreements and a broad range of other
commercial agreements involving the use, development or transfer of intellectual property.
Focus Phil is an active member of the technology and venture capital community. He served as the
Corporate and Securities firm's focal point in its role as a preferred provider to Tech Coast Works, an Orange County-
Emerging Companies and Venture based technology incubator, and serves as the firm's designee in connection with its
Capital International Trademark Association (INTA) membership. Phil is also a member of OCTANe.
Technology and Intellectual Property
Mergers and Acquisitions Prior to his legal career, Phil worked as a Project Engineer for six and one-half years in the
aircraft and medical device manufacturing industries. He is a licensed Professional Mechanical
Education Engineer.
J.D., cum laude, Loyola Law School, Memberships
Los Angeles, 2003
M.S. in Mechanical Engineering, International Trademark Association (INTA)
University of California, Irvine, 1993 OCTANe
B.S. in Mechanical Engineering,
Columbia Admissions
University, New York, 1992 State Bar of California
Licensed Patent Attorney