Full Ratchet Anti-Dilution Protection

Glossary Term

A type of anti-dilution protection for preferred stock in the event of a down round of series financing that adjusts the number of common shares the preferred shares can be converted into based on the new share price.

Broad-Based Weighted-Average Anti-Dilution Protection

Glossary Term

Provisions in a company’s certificate of incorporation that increase the number of shares of common stock into which preferred stock when the company sells stock at a lower price.

Dilution

Glossary Term

Dilution is a reduction in the ownership percentage of a share of stock caused by the issuance of new stock.

Cooley Protect – Patent Resource Center

Create and Protect

Cooley Protect is a free resource designed by Cooley’s patent counseling & prosecution team.

Introducing Cooley GO in Asia

Cooley GO in Asia offers the same free founder-focused legal resources and document generators that the US and UK ecosystems have come to trust.

What You Need to Know About Down Round Financings

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A “down round” is a financing in which a company sells shares of its capital stock at a price per share that is less than the price per share it sold shares for in an earlier financing. Down rounds are frequently viewed much more harshly than flat or up rounds.

The Direct Listing Craze

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2019 marked the rise of the Direct Listing. Though they are not exactly new structures, following the heavily-publicized Direct Listings of tech giants Spotify and Slack, they have captured the imagination of the capital markets world.

Super Voting Stock: What is it and how can I get it?

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Very often founders raise the concern about protecting against dilution.  Specifically, they are concerned that, as they grow their business and issue stock to investors, employees, and advisors, their shares, and therefore their voting power, will be diluted.

Pulling the Trigger(s): What are Single-Trigger and Double-Trigger Acceleration and How Do They Work?

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Double-trigger acceleration refers to the partial or full acceleration of vesting of someone’s options or stock based on the occurrence of two distinct events. Each event is a “trigger” and if both events occur, that is a “double trigger.”

Calculating Share Price With Outstanding Convertible Notes or Safes

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Now that you have agreed on a company valuation with your investors, how do you calculate the price per share for your Series A financing? This can be especially tricky when the company has outstanding convertible notes that are converting into shares of preferred stock.

Trademarks – Forging a sword and shield around your goodwill

Create and Protect

Not all terms can be trademarks, and not all trademarks are created equal. Learn more about trademarks and the benefits of trademark protection.

Option Grants: Fully Diluted or Issued and Outstanding

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When talking to people about option grants, refer to “fully diluted” and always promise a share amount not just a percentage.

Establishing the Ownership Culture: Stock vs Options

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We often get asked about the difference between the two most common forms of equity grants - stock and options. This article is intended to highlight some of the important differences between them.

Consider Control and Voting Rights When Making Venture Capital Deals

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Control is a critical component of every venture capital deal. It can be used to dictate desired outcomes or, through “negative controls,” to block undesired outcomes. Negative controls can give the venture investor the right to unilaterally block a variety of corporate actions.

Negotiating Term Sheets: Focus on What’s Important

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When you receive a term sheet from a VC for a full preferred stock financing, the abundance and variety of terms might seem overwhelming. It can be difficult to understand what terms are really important when you don’t have experience living with those terms.

Keeping Your Equity: Is Borrowing Money a Better Option?

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Borrowing money is less dilutive than raising money with your equity, and, with the right relationships and precautions, might be a better option.

What is the Difference Between “Friends and Family”, Seed and Series A Financings?

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While each refers to early-stage financings, there are important differences between Friends & Family, Seed and Series A financings that you need to know.