Your startup was launched only a few months ago and your co-founder has just informed you that he’s leaving. It hits you that your co-founder just walked out the door with 50% of the equity in the company. Oops.
Founder breakups are not uncommon, but what happens to the exiting founder’s stock will depend on
The Securities and Exchange Commission released helpful guidance on some of the practical aspects of the new Rule 506(c) exemption for private offerings using general solicitation and advertising. The guidance comes in the form of Questions 260.05 – 260.13 in its Questions and Answers of General Applicability and include the following:
In a massive 585 page release, the Securities Exchange Commission on October 23 issued its long overdue proposed rules on equity crowdfunding to implement the statutory equity crowdfunding exemption set forth in Title III of the JOBS Act. As proposed, Regulation Crowdfunding implements and further clarifies the statutory requirements for equity crowdfunding, and in
The second annual Cornell Entrepreneurship Summit was held on October 11 in New York City and I was thrilled to attend. This year, the Summit was sub-captioned “The Beginning: From Nothing to Something”, and featured presentations from mostly Cornell entrepreneur-alums, one VC-alum and a few reps from entrepreneurship@cornell, the campus-wide program that promotes
The new SEC rules lifting the ban on general solicitation and general advertising in certain private offerings go into effect today, September 23, 2013. Beginning today, issuers in Rule 506 offerings may generally solicit investors and advertise their offerings provided they take reasonable measures to ensure that each purchaser is an accredited investor. The new
Sun Capital Partners was dealt a harsh blow by the United States Court of Appeals for the First Circuit in a recent decision where the court found that this private equity fund could be held liable for the pension withdrawal liability of its portfolio companies. The court essentially
espoused the view of the Pension Benefit
The SEC on July 10 finally lifted its 80-year old ban on general solicitation and general advertising in Rule 506 offerings, as Congress directed it to do last year in the JOBS Act. When the new rules go into effect in September, issuers will be able to use social media, the internet, blogs, email and
I’ve noticed a recent trend of angel investors demanding valuation caps on their convertible bridge loans, and I’ve received questions lately from startup and VC clients about them. So I thought this would be an opportune time to explain what 
all the fuss is about.
First, the basics.
Convertible Notes
A convertible note evidences a
Last month, the SEC released its Final Report on the 2012 SEC Government-Business Forum on Small Business Capital Formation, the SEC’s annual forum to address perceived unnecessary impediments to small business capital formation. Participants typically include small business executives, VCs, government officials, trade association representatives, lawyers, accountants, academics and small business advocates. The Report contains
Of the countless details and decisions that the founder of a startup company is inevitably juggling as he launches his startup, one of the most important is making a timely Section 83(b) election. Under Section 83 of the Internal Revenue Code, an employee is not taxed on restricted stock received from an employer as