June 2012

Asher headshot.jpgCONTRIBUTED BY
Asher Bearman
asher.bearman@dlapiper.com

Many of us are anxiously awaiting the SEC’s implementation of the rules that will allow funds and companies to engage in general solicitations as par'Delay Start (179)' photo (c) 2007, Doug Waldron - license: http://creativecommons.org/licenses/by-sa/2.0/t of their fundraising efforts.  The SEC was directed to implement those rules within 90 days of the JOBS Act’s passage.  Although not much of a surprise, the SEC is now confirming that it will not be able to meet the 90 day deadline.

In a hearing on June 28, 2012 before the House Oversight TARP and Financial Services Subcommittee, SEC Chairman Mary Schapiro provided an update on the Staff’s progress in drafting proposed rules lifting the ban on general solicitation and implementing the crowdfunding exemption under the JOBS Act. Continue Reading SEC Not Quite Ready to Lift General Solicitation Ban

The SEC has adopted final rules directing national securities exchanges to establish listing standards relating to Compensation Committees, pursuant to Section 952 of Dodd-Frank Wall Street Reform and Consumer Protection Act. These new rules require exchanges to adopt heightened independence standards for compensation committee members and rules permitting compensation committees to engage compensation advisers, at the company’s expense, after taking into account certain independence factors relating to such compensation advisers.
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Continue Reading Exchanges Must Adopt New Compensation Committee Rules

Asher headshot.jpgCONTRIBUTED BY
Asher Bearman
asher.bearman@dlapiper.com

I tend to be an optimist and have been accused by friends (and others) of being too rosy in my outlook.  If that’s true, I suspect it is because of athletics.  I have played sports all my life and I’ve found that, in sports, the competition is fierce and if you believe that you can’t win, you will be right.  I also think sports have a lot of parallels to business.  Both are very competitive and your mindset is critical.  As a business lawyer, I have to analyze all of the potential downsides in a transaction, so my optimism is tempered significantly.  As a periodic investor in the markets, my optimism is trickier to control.

Being an optimist, I see a bright future for the VC industry, but others disagree.  Many of you have now heard about the Kauffman report on the state of the VC industry.  The report, available here (Kauffman report), was entitled “WE HAVE MET THE ENEMY… AND HE IS US” Lessons from Twenty Years of the Kauffman Foundation’s Investments in Venture Capital Funds and The Triumph of Hope Over Experience.  It was widely publicized and gave a somewhat dire picture of the VC industry.  The Wall Street Journal Venture Dispatch summarized the report as “bashing” the VC industry. Continue Reading Hey VC Industry – What time is it?

This post is part five of our five part series exploring various aspects of due diligence in the context of a merger and acquisition (M&A) transaction. Our prior posts discussed M&A due diligence generally and its objectives, described the due diligence process, outlined considerations when assembling your due diligence team of experts and the due diligence request list, and explained how to respond to a due diligence request list. This post will focus on the scope and process of a due diligence review and how the results of such review will impact the proposed M&A transaction.
Continue Reading M&A due diligence: The review and results (part 5)

Asher headshot.jpgCONTRIBUTED BY
Asher Bearman
asher.bearman@dlapiper.com

This edition of The Venture Spotlight features a 30 minute interview with Sam Schmidt, a professional indy car driver who suffered a horrific crash about 10 years ago leaving him paralyzed from the neck down.  Now Sam heads a racing team and also periodically makes investments in startups.  Most recently, Sam invested in Korrio, a Seattle startup company looking to revolutionize the administration of youth sports leagues.  Here is my interview with Sam.  Scroll down for some video of him talking elsewhere about Korrio and his other exploits.Continue Reading The Venture Spotlight – Indy Driver, Team Owner and Angel Investor Sam Schmidt

Megan Muir.jpgCONTRIBUTED BY
Megan Muir

The Jumpstart Our Business Startups Act (the JOBS Act), enacted in April this year, makes a variety of significant changes to securities laws, some of which relate to early-stage entrepreneurs, startup companies and venture capitalists concerned about fund raising with respect to their portfolio companies.

In this article, I address provisions of the JOBS Act most applicable to startup companies and venture capitalists that fund them. In this piece, I will not be covering other changes in the Act such as broker/dealer regulations, “Reg A+”, or the changes to research reporting and analyst rules.

IPO On-Ramp

The JOBS Act contains various changes to the requirements for a company listing its shares in its initial public offering, referred to as the IPO “on-ramp” provisions. These changes should assist emerging companies as they consider an IPO as a strategy to raise funds for growth while creating liquidity for their venture capital and other investors. The key IPO on-ramp provisions, which went into effect immediately in April, are identified below.Continue Reading JOBS Act: What Matters Most for Startups and VCs

Carbins_Amy.jpgCONTRIBUTED BY
Amy Carbins
amy.carbins@dlapiper.com

In the early growth stages, new companies often look for short-term leases for relatively small suites to enable the company to expand or scale back on the space and rent obligations depending on the success of the business. When the time comes for a new company to branch out into its first office space, the need to finalize the lease quickly can become very pressing. However, the legal issues and financial risks associated with short-term leases for small suites are, for the most part, very similar to those associated with long-term leases for large spaces. Most landlords will present the same form of lease to a tenant for a two-year, 3,000 square foot lease as they present to a tenant for a five- or ten-year, 50,000 square foot lease. In an ideal setting, a company would be able to engage counsel to negotiate for customary tenant protections throughout the lease. However, when time and resources available to devote to lease negotiations are scarce, tenants must prioritize issues in order to get to lease signing within the company’s time and cost budgets. Although circumstances vary from lease to lease, there are some key considerations that are likely to be present in any commercial office lease.Continue Reading Key Leasing Considerations for Startups

Gina Durham, an intellectual property partner with DLA Piper’s Chicago office, explains the new generic top-level domain (gTLD) program underway by Internet Corporation for Assigned Names and Numbers (ICANN). Over the past several months, ICANN has been accepting applications for the new gTLD program.

This program allows organizations to own their own top-level domain extension and aims to greatly proliferate the number of available domain extensions beyond the limited number of extensions, such as “.com” and “.org,” to which Internet users are accustomed. With a few exceptions, an organization…
Continue Reading Is Your Name Safe? Top Level Domain Name Applications to be Revealed

This weekend I spent a day with Rebecca Lovell (on right in photo) and a group of 60+ University of Washington Technology Management MBA students who were doing their final project prior to graduating – a venture capital investment competition. The Tech Management MBA is designed specifically for technology industry professionals and the venture capital competition (with Rebecca teaching) was a component added recently to give them some exposure to entrepreneurs in fund-raising mode and to give them a better understanding of the issues early stage tech investors consider. Although the students were only playing at being VCs, they did so with four real startups, giving the entrepreneurs a half day of practice pitching their companies and answering questions a potential investor might ask. UW TMMBA VCIC June 2012 TVA.jpg

The four companies that took time out of their busy startup schedules to present to the students were:

  • Relaborate, makers of software to simplify the process of creating quality content for business blogs;
  • SkyFu, with tools and data to assist a business with online reputation management;
  • Saltbox, creators of a sales force communication and learning application; and
  • Booktrope, with a book publishing model that offers more support than self-publishing.

Continue Reading UW Tech MBA Venture Capital Investment Competition