What is a Down Round? 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. Why Does it Matter if a Company Does a Down Round? Down rounds… Read more »
Posts Categorized: Guidance
Entrepreneurs often ask whether equity crowdfunding is a viable option for funding their company. As is often the case with questions to an attorney, the answer is “it depends”. In 2012, when President Obama signed into law the Jumpstart Our Business Startups Act, commonly known as the “JOBS Act”, US investors and entrepreneurs were excited… Read more »
Often viewed as a quick interim source of funding until the next round of equity financing, convertible notes have become ubiquitous in Southeast Asia and India for many early-stage and even late-stage companies looking to raise capital. While convertible notes in the US venture practice feature a familiar mixture of terms such as conversion caps… Read more »
After you set up your new company, one of the first legal documents you will be thinking about is an incentive equity plan, sometimes referred to as an “option plan” or an “ESOP”. This is key to motivating early employees, who may be taking a lower base salary for a share in the “upside” based… Read more »
One thing that we can say for sure is, never say never. As with anything else in life, an investment carries both known and unknown risks. A company may have current or historic issues that create liabilities. The company may also have known risks associated with its line of business, and unknown risks associated with… Read more »
With India’s strong ties with Silicon Valley and its maturing tech and startup ecosystem, outside investments in Indian companies are becoming increasingly common. However, the Indian economic and legal regime has some unique characteristics. Here are a few things you should consider before investing: Foreign Direct Investment – Industries/Sectors and Limits Are you investing/operating in… Read more »
For many entrepreneurs and investors who are familiar with the US venture capital scene, you may be surprised to hear the details of the bespoke corporate governance terms that are often negotiated in Southeast Asia and India deals, some of which are ordinarily viewed as non-starters or off-market in the US. As the venture capital… Read more »
Here are a few things that an investor should keep in mind when considering whether to become a director of an Indian company. Appointment Process The appointment process of becoming a director in India requires obtaining a Digital Signature Certificate (DSC) and a Director Identification Number (DIN). Obtaining a DSC and DIN involves hard copy… Read more »
When a company is sharing its technology or other proprietary information with a potential strategic or commercial partner, it will want to ensure that the information is kept secret and not being used for an unauthorized purpose. This is where a non-disclosure agreement (NDA) is relevant. Put simply, an NDA is a legally binding document… Read more »
A Delaware public benefit corporation (PBC) is a for-profit corporation intended to produce a public benefit and operate in a responsible and sustainable manner. A PBC must be managed in a way that balances the interests of the stockholders, the company’s key stakeholders, and a specific public benefit that the company commits to in its charter.
