preferred stock

When SAFE is Stock: Implications of Series SAFE Preferred

By Alon Y. Kapen on February 10, 2026

Posted in angel investing, books and records, cap table, capitalization, convertible note, exit, non-voting, preferred stock, QSBS, Qualified Small Business Stock, SAFE, Series SAFE, valuation caps

Early-stage startup financings have long reflected a tension between transactional efficiency and legal precision. Instruments such as convertible notes and SAFEs were developed to reduce cost and execution time at the seed stage, but they do so by deferring, and often obscuring, important questions of corporate law, investor rights and tax treatment. A new financing…

Management and Common Stockholder Resistance to Acquisitions, and Using Carve-Outs to Overcome It

By Alon Y. Kapen on August 26, 2020

Posted in business judgment rule, carve-out plan, class structure, control, fiduciary duties, liquidation preference, preferred stock, VC, venture capital

This past June, autonomous vehicle technology startup Zoox agreed to be acquired by Amazon for a whopping $1.3 billion. Time for the common stockholders to pop the champagne, right? Not exactly, according to a complaint filed in the Delaware Court of Chancery by two common stockholders. Although many details have been redacted from the public…