Berkonomics

MAY 22, 2014

The sale of equity in private companies is regulated by the Securities Act of 1933, which requires that the company either register with the SEC or meet one of several exemptions (Regulation D). The entrepreneur may have already raised half or more of the cash required in this round and is eager to top off the round.

Early Stage 79

Early Stage Accredited Investor SEC Private Placement 79

Gust

DECEMBER 8, 2011

I urge all entrepreneurs to consult and develop a good working relationship with a qualified startup lawyer. Make escrow arrangements for restricted stock (i.e., Consummate the stock issuances, make any necessary securities filings and issue the corresponding stock certificates. Employment handbooks and policies.

Intellectual Property 139

Intellectual Property Non-disclosure Agreement Delaware Stock 139

Berkonomics

OCTOBER 1, 2015

Sometimes the end game or sale of the company is not a happy event for the early investors, including the entrepreneur or the founders. Most sophisticated investors will take either a promissory note or preferred stock, both of which come before founder or management stock in a sale or liquidation.

Dividend 48

Dividend Preferred Stock IRR Participating Preferred 48

Scott Edward Walker

APRIL 9, 2012

and (iii) what securities laws do founders need to worry about in connection with the issuance of convertible notes? Why Can’t a Startup Issue Shares of Common Stock to Investors? In fact, many incubators like Y Combinator and TechStars are issued shares of common stock for their initial investment (usually about $20,000).

Preferred Stock 87

Preferred Stock Finance Common Stock Liquidation Preference 87

Gust

JULY 23, 2012

Donations of private company stock may be an effective and tax-efficient method of giving with significant benefits to the donor. original cost) – and in the cases of entrepreneurs who have founded companies, the cost basis is effectively zero – and a significant current market value that would result in large capital gains taxes if sold.

Stock 114

Stock Capital Gains Warrant Stock Options 114

Both Sides of the Table

SEPTEMBER 5, 2012

My initial reaction to Adeo when we spoke was that while it may have solved some issues (debt versus equity) it didn’t solve the ones that I’ve been warning entrepreneurs about most loudly. A standard entrepreneur retort I heard back then (2008-09) was “I don’t know what my company is worth now.

Ratchet 354

Ratchet Liquidation Preference Equity Stock 354

Growthink Blog

MAY 10, 2012

If it's not your plan to get venture capital down the road, then you'll probably stop in Stage 2-receiving enough funding to boost your marketing, sales, and infrastructure to grow organically from there to the point where you are satisfied or ready to sell. This video explains more. read more.

Equity 88

Equity Mezzanine Later Stage Venture Capital 88

Gust

MAY 24, 2012

Yet I’m skeptical that a widespread shift will occur anytime soon, and for reasons discussed below, as much as I admire and advocate for talented entrepreneurs, I believe it would be a losing proposition for nearly all involved. Options and warrants, when issued, are also typically exercisable for shares of Common Stock.

IPO 159

IPO Equity Common Stock Stock 159

Both Sides of the Table

SEPTEMBER 8, 2012

If you do a capped note it’s bad for the entrepreneur. Fred, who also wrote his views about convertible debt (significantly more succinctly than I) believes that the price of a single round should be the same for everybody. ” If you remember the three rules of sales : it’s. ” I wrote about it here. why buy me?

Pre-Money Valuation 294

Pre-Money Valuation Finance Liquidation Preference Warrant 294

Gust

OCTOBER 3, 2011

For a first time entrepreneur trying to figure out the arcane world of startup financing, it can be very confusing to understand the roles that different types of investors play in funding promising companies, as well as the point in a company’s life at which they enter the stage.

Finance 70

Finance Venture Capital Intellectual Property Early Stage 70