News & Analysis as of

Startups State Administration of Foreign Exchange

Farrell Fritz, P.C.

Corporate Transparency Act Risks for Startups and Venture-Backed Companies

Farrell Fritz, P.C. on

Starting January 1, 2024, virtually all private companies will be required to report information about their beneficial owners to the Treasury Department’s Financial Crimes Enforcement Network “FinCEN”) under the Corporate...more

Manatt, Phelps & Phillips, LLP

Startup Financing: When Is a SAFE Not So Safe?

Startups have been raising money using the Simple Agreement for Future Equity (SAFE) since it was first introduced by Y Combinator in 2013. The advent of the SAFE has fundamentally changed the speed and simplicity of...more

Barnea Jaffa Lande & Co.

Legal Aspects of SAFEs (Simple Agreement for Future Equity)

Barnea Jaffa Lande & Co. on

One common problem of early-stage ventures is the difficulty in determining a company valuation when recruiting capital from investors. This problem derives from the tension between entrepreneurs’ desire for a high valuation...more

Lowenstein Sandler LLP

An Ounce of Prevention: Preparing for Your Pre-Seed Financing Round

Lowenstein Sandler LLP on

Benjamin Franklin famously cautioned that “an ounce of prevention is worth a pound of cure.” Although Franklin was warning the people of Philadelphia that preventing a fire is better than fighting one, the same admonition...more

Fenwick & West LLP

Convertible Debt Terms - Survey of Market Trends - 2019/2020

Fenwick & West LLP on

The convertible debt market has remained remarkably stable over the last 15 months, despite considerable economic uncertainty related to the COVID-19 pandemic. Fenwick’s latest Convertible Debt Terms – Survey of Market Trends...more

Cozen O'Connor

The Ins and Outs of Convertible Debt

Cozen O'Connor on

Congratulations! Your startup has developed a viable product that you are ready to test in the market. But you need some early money to fund this critical phase! Convertible debt can allow a startup to raise money with more...more

Mintz

TechConnect - Your Law Firm Link to Industry News - September 2017

Mintz on

Letter from the Editors - Words are very powerful and the language we use often frames a discussion. For example, the term “shareholder activist” sounds like a consumer friendly person who has everyone’s best interests at...more

Mintz

SAFEs: The (Not So) Simple Agreement for (Potential) Future Equity

Mintz on

Historically, most startup companies were funded either by the offering of equity or by loans in the form of convertible promissory notes. Recently, however, there have been some hybrid instruments created to fund startups....more

Mintz

TechConnect - Your Law Firm Link to Industry News - June 2017

Mintz on

Seniority Matters - There is little doubt that activity in the trading of secondary shares of private companies remains robust. Private companies are staying private longer and there seems to be an unlimited demand to buy...more

WilmerHale

Why SAFEs Can be Confusing

WilmerHale on

Entrepreneurs often raise capital with a combination of convertible notes and an agreement called a SAFE, or Simple Agreement for Future Equity. A SAFE seems like a no-nonsense DIY solution for early-stage companies—but...more

McCarter & English, LLP

An Emerging Trend in Early-Stage Company Financing? – After Years of Growing Ubiquity of Convertible Notes, a Return to Priced...

After years of increasing acceptance of and reliance on convertible note financings as a mechanism for funding early-stage companies, we have noted a clear emerging trend away from such transactions (and others like them,...more

Foley & Lardner LLP

Unlocking the SAFE – An Alternative to Convertible Notes

Foley & Lardner LLP on

With the increasing level of investment in emerging companies, entrepreneurs are being presented with a wider range of financing documents. One of the relatively newer financing instruments is the “SAFE” (simple agreement for...more

Sheppard Mullin Richter & Hampton LLP

SAFEs and KISSes Poised to Be the Next Generation of Startup Financing

Overview - In late 2013, startup accelerator Y Combinator unveiled its Simple Agreement for Future Equity (“SAFE”) investment instrument as an alternative to convertible debt. While SAFE templates appeared in...more

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