LBO Primer: Recapitalizations

Recent Buzzes - VC Experts, Inc.

Recapitalizations accomplish several of the purposes of a leveraged buyout except for an entire change in ownership. Thus, existing shareholders retain a share of the value inherent in the leveraging process the upside potential when, as and if acquisition debt is paid down from post-closing cash flows and asset sales

The Last Chinatown Dumpling Tour RecapIt was an awesome outing.

Mark Birch

The Last Chinatown Dumpling Tour Recap It was an awesome outing yesterday. Though it was super hot and humid out, we braved the heat to seek out the great dumplings treasures of Chinatown. And based on what we discovered, it was a successful (and delicious) mission!

Preparation For The Public Offering

Recent Buzzes - VC Experts, Inc.

Moreover, it is often necessary to recapitalize the enterprise The planning steps prior to a public offering are outlined in a number of source materials, emphasizing the increase in formality involved in the transition from a private to a public company. Some of the less obvious points that deserve mention have to do with corporate structure. The requirement that the financial statements be audited is well known.

The Silliness Of Recapping Seed Rounds

Feld Thoughts

So they recapitalize the company. Here’s the scenario. A company raises $1m of seed money from angels in a convertible note with a $6m cap. Assuming equity is raised at or above that cap, the total dilution, before the new money, is 16.6% (equivalent to an equity financing of $1m at a $6m post money valuation. The company spends the $1m building and launching their first product.

How to Fix The Economy

Will Price

Will require recapitalizing banks but will avoid Japanse problem of "zombie banks" with billions in loans where LTV is upside down Rebalance global trade and address structural deficiencies (best reflected in the US current account deficit), whereby China and growth economies begin to consume.

Startup Financial Models: Best Practices in Spreadsheet Design

David Teten

A good model should have the ability to test assumptions in order to analyze the impact on future financial performance, including growth rates, operating margins, product lines/individual segments, and refinancings/recapitalizations.

Venture Capital Deal Buzz - OnLive Inc.

Recent Buzzes - VC Experts, Inc.

None of the funding has been used for reorganization or recapitalization, but the dividend rate on OnLive's Series D and E rounds was 8%, according to VC Experts Valuation & Deal Term Database. By Erin Griffith, Contributing Editor. Gaming has come a long way since the days of plastic Atari boxes and Oregon Trail floppy disks, but delivery methods for both the television and computer games still face a great deal of transformation.

Aspen Aerogels S-1 Analysis

Secret Formula

That’s the tough medicine that common stock holders – in particular, management and employees – had to swallow when the company recapitalized in 2008: Every 18 shares of common stock turned into one share. tl;dr: Good company; tough road in the rear-view mirror.

Q2 2011 Non-Silicon Valley Deal Terms

Recent Buzzes - VC Experts, Inc.

As far as Corporate Reorganization or Recapitalization , we did record this in 6% of the Non-Bay Area deals that we analyzed. By VC Experts Analyst Team.

How To Ace Your Most Important Hire

Inc Startups

They will likely restructure your company’s debt more frequently than you ever have, potentially considering a dividend recapitalization at some point. Once you have investors, this becomes your most important employee--one with a frightening amount of independence.

How You Know When It Is Time To Move On

Inc Startups

Due to the current abundance of cash in the market today, CEOs have numerous options available, ranging from selling all or part of the company, to restructuring and recapitalization. An entrepreneur should know when it is time to move on for the sake of his or her business.

The Dark Side of Equity Crowdfunding

Inc Startups

Sometimes a company has to change direction and needs to recapitalize. If your company can be cash-flow positive with one round of financing, equity crowd funding might work for you. But if your idea is truly huge, you may prefer to have professionals on your side.

Startup Founder Agreements

High Contrast

The only way to remove their equity holding in the cap table is by buying them out or through a recapitalization of the company. I have been thinking a lot recently about how to apply agile development principles to investing and key aspects of startup development such as team building. That’s also the thread connecting my two recent posts on VentureHacks. Both stem from the agile principle of delaying decisions until the last responsible moment.

Do the Numbers Add Up for Your New Venture?

Inc Startups

Carry equity: A fixed percentage of the equity gains when a portfolio company is later sold or recapitalized. Any new business model must include sources of revenue, costs, as well as key metrics for measuring success. Here's how we modeled our potential new venture.

Why Deals Fail: 5 Reasons

Inc Startups

Cleaning up debt through a recapitalization can be just what a company needs to catapult into a new wave of growth. No deal is a slam dunk. But some are better than others.

Entrepreneurs, Legacy Costs Can Hurt Your Start-up Company’s Fund Raising Efforts

Robert Ochtel

They will be able to provide you with the appropriate advice regarding recapitalization of your start-up company to make it more attractive to investors. . Start-up companies, by definition, need to be nimble and have the ability to change direction as the market changes. Often with the development and maturation of a start-up company, things can change significantly from the original direction, mission and focus of the company.

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How to Choose the Right Investment Banker

Inc Startups

What are the characteristics you should look for in an investment banker when you are ready to sell, recapitalize or possibly acquire a business? The right investment banker won''t be at all like the guys you see in the movies. Here''s what to look for.

Silicon Valley Frontlines: Two Tales of "Working For Equity"

a year burn rate and your equity is worthless due to numerous recapitalizations and bridge loans from investors then either you don't get it or I'm stupid to do it. Silicon Valley Frontlines. In-the-Trenches Consulting to Startup and Emerging-Growth Companies. Archives. Subscribe. « Presentation Secrets of Steve Jobs! Main. | Why Do Otherwise Sensible Companies Not Have CFOs? » January 23, 2010. Two Tales of "Working For Equity".

Entrepreneurs, Get Your House in Order Before You Present to Investors

Robert Ochtel

Many times a start-up company that has been through several incarnations will need to be recapitalized to properly reflect the new debt and equity structure of the company and its present executive team. Many start-up companies go through one or more incarnations before they are ready to engage with potential investors.

Downturn - Now What?

Will Price

I remember long and painful board meetings where companies decided on reductions in force, recapitalizations and investor wash outs, and the slow, painful realization that the company's infrastructure, employee base, and positioning had gotten way too far in front of economic realities. My first year in venture was 2002. The great bull run of the 1990s was over, the dot com movement had come to a crashing halt, and Silicon Valley settled into a year of retrenchment and reckoning.

Stock Market Drops. Then It Rallies. What Happens Next for Funding?

Both Sides of the Table

On the positive side, corporate profits are up, their balance sheets have been repaired and they have recapitalized themselves to have lower amounts of debt relative to equity. This article was originally published on TechCrunch.

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Do You Deserve Investment Capital?

Inc Startups

As an entrepreneur involved in fundraising--from the garage all the way to a $50 million recapitalization--I’ve believed that my company deserved capital. Plenty of entrepreneurs want an investment, and some really need it. But not many deserve it. Do you?

Venture Capital Deal Buzz - Don't Rule Out LivingSocial

Recent Buzzes - VC Experts, Inc.

Reorganization or Recapitalization. By Erin Griffith, Contributing Editor. Groupon may have raised, like , a billion dollars , but that doesn't mean it'll rule discounted online commerce forever. Social shopping competitors are afoot. Take LivingSocial, the second largest player in group-buying. Like Groupon, LivingSocial markets deep discounts on goods and services with local vendors through social networking. In December, the Washington, D.C.-based

On the Road to Recap:

This severely heightens the risk of either running out of money or a complete recapitalization that wipes out previous shareholders (founder, employees, and investors alike). Why the Unicorn Financing Market Just Became Dangerous…For All Involved. In February of last year, Fortune magazine writers Erin Griffith and Dan Primack declared 2015 “ The Age of the Unicorns ” noting — “Fortune counts more than 80 startups that have been valued at $1 billion or more by venture capitalists.”

The Entrepreneur Thesis

Both Sides of the Table

I really believe that some firms have the strategy of edging out the entrepreneurs, bringing in a new management team, recapitalizing the company, minimizing the founders’ share and taking maximum ownership for the VCs.

The Right Way to Lay People Off

Ben's Blog

outcome with no recapitalization. “I’m tryin’ to right my wrongs, But it’s funny them same wrongs helped me write this song”. Kanye West. Shortly after we sold Opsware to Hewlett-Packard, I had a conversation with the legendary venture capitalist Doug Leone of Sequoia Capital. He wanted to hear the story of how we went from doomed in the eyes of the world to a $1.6B

How to Be an Angel Investor

The reason you dont want to give them up is the following scenario.The VCs recapitalize the company, meaning they give it additionalfunding at a pre-money valuation of zero. It doesnt happen often.Brand-name VCs wouldnt recapitalize a company just to steal a fewpercent from an angel. March 2009 (This essay is derived from a talk at AngelConf.) When we sold our startup in 1998 I thought one day Id do some angelinvesting. Seven years later I still hadnt started.

How Deal Terms Affect Valuation & Liquidity

Recent Buzzes - VC Experts, Inc.

By Justin Byers, Business Intelligence Analyst Last week, entrepreneur turned venture capitalist and blogger Mark Suster had an excellent post titled, "Want to Know How VC's Calculate Valuation Differently from Founders?". In his post, he referenced the importance of deal terms to company founders and we wanted to expand upon that discussion.

Clawback of Fraudulent Transfers from Investors - Good Faith Defense Update

Recent Buzzes - VC Experts, Inc.

Mr. Friedman has over 25 years of experience in all aspects of bankruptcy law, including chapter 11 reorganizations, liquidations, out-of-court debt restructurings and the negotiation and implementation of plans of reorganization, recapitalizations, debtor-in-possession financing agreements, asset acquisition agreements, and structured finance agreements. By Jeff J. Friedman and Anthony L. Paccione of Katten Muchin Rosenman LLP.

Everything you ever wanted to know about advisors: Part 2.

The company is acquired, recapitalized, or otherwise restructured and the advisors are no longer useful or desired. Venture Hacks Good advice for startups. Disclaimer: This is not legal advice.

Maric Capital - Delaware Court of Chancery Halts Merger on Duty of Disclosure Grounds

Recent Buzzes - VC Experts, Inc.

She regularly handles a wide range of general corporate transactions such as mergers, acquisitions, divestitures and buyouts, as well as transactions involving various types of financings, including leveraged recapitalizations, credit lines, acquisition financings and securitizations. By Attorneys at Reed Smith LLP William E. Doran, Lori L. Lasher, Nicholas A. Long, Catharina Y. Min, and Jonathan P. Moyer at Reed Smith LLP.

Canada Pushes Embedded Contingent Capital

Recent Buzzes - VC Experts, Inc.

Similarly, the so-called Sovereign Wealth Funds provided the first wave of recapitalization internationally but, given the losses they incurred, they may not be willing to provide the capital next time. By Blair W. Keefe of Torys LLP Introduction. Canadian officials have been promoting embedded contingent capital as the best alternative for dealing with systemically important financial institutions (SIFIs), or banks that are "Too Big to Fail," as they have historically been referred to.

Selectica Decision Upholds Adoption and Use of 4.99% NOL Rights Plan

Recent Buzzes - VC Experts, Inc.

Mark Betzen has more than 20 years' experience advising business entities and corporate directors with respect to transactional matters involving publicly traded and closely held companies, including mergers, acquisitions, dispositions, spin-offs, recapitalizations, and restructurings. By Mark E. Betzen, Lyle G. Ganske, Jennifer C. Lewis, Robert A. Profusek, Lizanne Thomas of Jones Day Introduction.

Private Fund Adviser Regulation Under The Dodd-Frank Act

Recent Buzzes - VC Experts, Inc.

He has particular experience in private acquisitions, leveraged buyouts, recapitalizations, and minority investments. By Attorneys at Weil, Gotshal & Manges LLP Jeffrey E. Tabak?, David E. Joseph J. Basile, Kristen L. Buppert? and Joseph F. Bernardi, Jr. Introduction.

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Seed Capital Offerings

Recent Buzzes - VC Experts, Inc.

Although the quality of a management team and the viability of a business plan are obviously crucial factors, it is nevertheless important for the angel investors and the company to develop a long-range plan for a particular investment, such as whether the most likely exit scenario is a recapitalization, a sale or an IPO. By Michael J. Drooff, Esq. of Sheehan Phinney Bass + Green PA Introduction.